Financial Skewering

With Anthony Gibson's return to the NFU, the first story in Farmers' Weekly is about how Defra need to change their plans for a farmer-led badger cull. Says Mr Gibson: "They need radical or significant improvement. On the face of it, the government seems to be loading far too much risk and far too much cost on to the farming community and not taking enough responsibility itself".

This is interesting: many believe it wont be until the agricultural industry take ownership of TB that the problem will be addressed. Taking financial ownership of TB could give the NFU real power to exert control over TB policy - its the realpolitic of cost and responsibility sharing and its what has delivered the drastic cuts in TB in New Zealand.

But the NFUs choice of getting farmers to pay for badger culling looks like the wrong one. As Anthony Gibson says, it loads all the risks onto farmers. Far better for them to have said to Defra: "we want to fund TB testing from now and we are going to do it via a levy on farmers".

But why do this? Firstly, it makes the costs far more equitable. If a badger cull were to have an effect on national levels of TB (thats a big if, but run with it) then shouldnt all farmers pay for it, rather than just the ones where culls occur? If we agree on that, then the current policy is extremely inequitable.

Secondly, it also makes the costs for farmers look more palatable. Rather than the upfront blank cheque approach associated with the farmer-led badger cull with all its risks of failure, funding TB testing looks far less scary. Calculating on the back of a fag packet (actually I dont smoke, disgusting habit), here's what it might look like. Lets say TB testing costs around £30m pa (quite an accurate figure, although it may lack some of the admin costs). Now choose how you'd like to distribute those costs: via a milk levy? A headage rate? Based on DairyCo's figures from last year: £30m testing cost and 13332000000 litres per year then the levy is £0.00225 per litre. Or lets say there are 11000 dairy farms, well thats about £2700 a year. These figures are very rough and they don't include income from the beef sector, but you get the point.

Paying out this amount of money has two advantages: first it puts the agricultural industry in position to develop efficiencies, lower costs and better quality TB tests. It would be more effective in pushing for using technicians to test rather than vets in order to save a lot of money on TB testing - if farmers are paying for them then they will be much more insistent on them.Secondly, paying out this amount of money though gives the NFU a much bigger bargaining chip than it currently has to get what it really wants - a badger cull. And if it didnt get that, then it could cause all sorts of problems. Thats the political game.

I'm not saying this is 'right', just that in other circumstances thats what happens. In that respect, the NFU dont seem to have picked the best hand or played the political game as well as it could have.

Of course, maybe the NFU reckoned that even if they stumped up for TB testing, the government would still not go for a badger cull. Thats a good point. But in that case, why would the NFU want one so badly?