Bottom line in a hairy dispute
Kapuni farmer Geoff Butler has announced he has asked the Commerce Commission to investigate a dairy genetics company's claims about a commercial breeding bull.
The commission is now assessing whether claims by the Livestock Improvement Corporation (LIC) about a bull called Matrix breach the Fair Trading Act.
Commission spokeswoman Victoria Rogers has no idea how long the assessment will take.
About 900 New Zealand farmers have 1500 heifers which inherited a mutation from Matrix which makes them hairy, heat-intolerant and unable to milk properly.
Butler, who wants compensation from LIC for four defective heifers, has based his complaint on the statement "We stand behind every straw" on the cover of LIC's 2011 Sire Catalogue.
He wants a better reimbursement than last month's goodwill gesture from LIC of a credit for Matrix inseminations, which, he says, came only after media pressure.
LIC staff advised him inseminations from Matrix were the best way to develop his 670-cow friesian and friesian-cross herd and improve its breeding worth, he says. He had not used DNA-proven semen before. "I had to pay more, but I thought it was in my best interests."
An LIC shareholder for 20 years, Butler thought the advice he received was based on sound industry knowledge.
"I've taken their word for it. If I'd been told of the risks, I wouldn't have gone near it. If you pay a premium, you expect a top- notch product. I made that point to the Commerce Commission.
"[LIC] need to get their house in order and their literature in order," he said.
Communications manager Clare Bayly says LIC tracked down the cause of the mutation within five months and contacted farmers as soon as it was identified.
No genetics company in the world has been known to pay compensation in similar circumstances. Neither has any provided assurances against previously unknown genetic defects.
The answers to Butler's questions are on the company's website, Bayly says. LIC has met him and will contact him again to discuss his concerns.
Butler says he wants to present his views to shareholders, so is responding publicly to last month's letter from LIC chairman Murray King outlining why compensation will not be paid.
Neighbour and sharemilker Tony Furness, of Matapu, who has 13 defective heifers, says there was no mention of any risk when he bought Matrix's semen.
"It was all proven. We weren't sold something as a trial. We paid top dollar and, as far as we knew, there was no risk."
In protest, he has taken his artificial breeding business to another company.
Butler has cancelled his order with LIC for DNA-proven semen in favour of semen from daughter- proven bulls and plans to buy products elsewhere.
Brian Sharp, of Okato, who has three heifers with the mutation, reckons he is $3000 out of pocket. With a small herd of 140 cows, the heifers were 10 per cent of his replacements.
He describes as a waste of time LIC's $88 credit for Matrix inseminations of his herd and says the co-operative should reimburse rearing costs.
"LIC needs a stir-up for the way they've handled it."
Hawera sharemilker Paul Short has two heifers with the mutation after expanding his herd, is annoyed at receiving no compensation and estimates he is $300 out of pocket for each animal.
Eltham sharemilker Simon O'Sullivan, who has four affected heifers, is also frustrated.
"We've resigned ourselves to no compensation and we're taking some of our business away from LIC, which has taken the trust of farmers for granted."
Butler remains concerned about the breeding prospects of his Matrix heifers which tested negatively for the mutation.
"Are they going to be clear for the rest of their lives?"
LIC has advised farmers to dispose of defective animals at meat-processing plants, but he wonders whether the meat will be contaminated.
Butler has asked LIC for written guarantees that heifers with negative tests will be suitable for breeding and milking and those with the mutation are fit to eat.
Until he receives the guarantee, he will not send his heifers to a meatworks. "I want a clear conscience. They're still out grazing. That's my choice. They stand out. They're scruffy and they're not thriving."
When farmers were advised of the mutation in March, they were told no compensation would be paid. Although Butler would have been happy then with $500 to $600 per animal for rearing costs, he now wants full compensation.
"If they'd shown some courage and reimbursed us to cover our costs, we wouldn't be in this position now and the damage [to LIC] wouldn't have been done."
It is not his intention to damage the LIC brand. "I'm still a shareholder and any damage to the brand is hurting us.
"The board of directors is like knights at the round table. They give the impression that they have the majority stake in the business, that just a few people are making a noise and that it will all go away.
"At no stage has the board or management apologised for the way they've handled this situation. They've given no assurances they've put systems in place so this won't happen again."
Butler says his $330 credit does not cover the cost of rearing his four useless heifers and some farmers with defective animals have received nothing.
"They're not compensating the right people - like those who bought a herd [with defective animals]. The credits are not getting to every farmer affected by these calves."
He argues LIC should have alerted farmers when it discovered progeny from Matrix's sire were not lactating properly, allowing them to cull calves and save rearing costs.
Although Federated Farmers is no longer advocating to LIC on farmers' behalf, dairy chairman Willy Leferink says the mutation is so rare his organisation feels a goodwill gesture would be insufficient.
"We hoped LIC would have run their commercial ruler over this issue, bearing in mind how low the odds are of a repeat.
"A dose of pragmatism would have avoided much public acrimony."
He suggests affected farmers combine to pursue the matter.
Butler says legal advice indicates strong grounds exist under the Fair Trading Act for compensation. A Hamilton lawyer has offered to collate a claim through the small claims court.
Taranaki Daily News