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Cost Recovery Proposals under the Animal Products Act 1999

Attachment 1: Meat Sector

Introduction

This section details the recovery costs of Industry Goods for Market Access, Export Standards and New Zealand Standards services for those persons who are involved in primary processing lambs, cattle, horses, sheep, goats, pigs.

Costs to be recovered from sector

Service	Cost	Payable from
New Zealand Standards and Systems	$1,434,383	All domestic and export processors
Market Access	$513,996	Export processors
Export Standards	$2,287,135	Export processors

Current situation

Levies are placed on primary processors. The levy rates are set taking into account forecast kill numbers received from the Meat and Wool Economics Service and MAF. The total kill numbers are translated into ‘lamb equivalent numbers’ using a conversion rate agreed with the industry.

The fee payable depends on the volume of throughput of the recipient of NZFSA’s service. Current levy rates are:

Lambs $0.10

Sheep $0.11

Pigs $0.25

Cattle $0.69

Horses $0.69

Goats $0.10

Bobby Calves $0.10

Cost Recovery options are:

1. Levies

	All Processors	Export Processors	Total for Export Processors
Lambs	$0.03	$0.06	$0.09
Sheep	$0.03	$0.07	$0.11
Pigs	$0.08	$0.16	$0.24
Cattle	$0.21	$0.45	$0.66
Horses	$0.21	$0.45	$0.66
Goats	$0.03	$0.07	$0.10
Bobby Calves	$0.03	$0.06	$0.09

2. Fixed annual charge per processor

All processors (73) $19,649 p.a.

Export processors (66) $42,441 p.a.

TOTAL $62,0690 p.a.

A further option could be to differentiate fixed charges on large, medium and small business scale/size. Under this option the distribution of costs is similar to that of a levy based system, ie, larger processors would pay the largest proportion of the cost.

Option to include secondary processing, animal feed and hides and skins in meat primary processors costs

If the costs of secondary processing, animal feed processing and hides and skins processors are added to cost to be recovered from primary processors the respective rates would be:

3. Levies

	All Processors	Export Processors	Total for Export Processors
Lambs	$0.04	$0.07	$0.11
Sheep	$0.04	$0.08	$0.12
Pigs	$0.10	$0.17	$0.27
Cattle	$0.27	$0.47	$0.74
Horses	$0.27	$0.47	$0.74
Goats	$0.04	$0.07	$0.11
Bobby Calves	$0.04	$0.07	$0.11

4. Fixed annual charge per processor

All processors (73) $24,793 p.a.

Export processors (66) $44,715 p.a.

TOTAL $69,508 p.a.

Fixed fees could be differentiated on a large, medium, small business size/scale.