LIC adamant: No compo for hairy mutant calves

20:59, Sep 03 2012

Livestock Improvement (LIC) chairman Murray King is standing firm against calls for compensation for farmer owners of hairy mutant calves from the bull Matrix, but has offered a glimmer of hope for those in dire straits.

“Certainly if there is any particular case that is affected more graphically than others we would have to consider that,” he said.

He emphasised that he was not promising anything and that there might be non-monetary ways in which farmers could be helped.

King said the dairy farmer co-operative had decided not to pay compensation to the estimated 900 farmers affected by the genetic mutation in Matrix inseminations, as it would not be fair on other shareholders.

“We're bound to treat all our shareholders the same way and that's the nature of the co-operative. We don't, as a rule, do deals.”

The Waikato Times asked King if he was concerned about young sharemilkers who might struggle financially to replace their mutant calves, with a replacement cost of $1300 each, and might therefore lose their chance to get into farm ownership. An estimated 1500 calves nationwide are affected as carriers of the mutant gene, and LIC has advised they should be eliminated from a dairy herd.


King said: “I do take it seriously because sharemilkers are important to the industry. I am concerned for their welfare, like I'm concerned for the welfare of all shareholders. It does trouble me that they would be affected adversely.”

King said the overall decision not to compensate had not been easy to make.

The board had met twice and come to the same conclusion.

“We take shareholder issues extremely seriously.”

He said most of the board members were farmers, and some board members themselves had affected animals.

Asked if the decision not to pay compensation was unanimous, King said he could not remember.

Asked if it would be fairer for all 10,500 LIC shareholders to pay $283 each to make up the $1.95 million LIC has previously estimated would be total replacement value for the affected heifers, calculated at $1300 each, King said: “I guess there are different views of fairness, aren't there?

"On the one hand you get some farmers who just dealt with the issue back in the autumn and culled those animals, and they say that's just what happens, through to the extreme view which is the compensation one, being the opportunity cost of the animals.”

He said a key reason for the decision not to compensate was that it might set a precedent.

“To our knowledge no other genetics company in the world would compensate for a naturally occurring mutation - something you have no control over. The whole genomics field is pretty new. It's all new ground.

“It is new territory and like anything new, there's risk.

“We're trying to breed the best of the best and in most cases that's exactly what has happened.”

Asked if he still backed DNA-proven technology, which the Matrix inseminations were promoted as, King said: “I think it offers such great possibilities that you can't afford to ignore it.”

Federated Farmers Waikato dairy section chairman Chris Lewis said the farmer group was sticking to its call to LIC for affected farmers to be compensated.

As an absolute minimum, the 12,345 semen straws from Matrix should be refunded or credited, but the ideal was replacement value for the estimated 1500 heifer carriers of the genetic mutation, he said.

“LIC should have come out with a compensation package back in March when LIC said to those farmers ‘destroy those animals'. That's what a reasonable company would do. If you have a dissatisfied customer you listen to them and come to an agreement. I don't know why they're being so bull-headed.”

Lewis said a lot of farmers had been with LIC for 20 to 30 years, and some of their herds had been in the family for 50 or 60 years.

“They've dealt with LIC for a long time, for generations. A lot of farmers are there from long-term loyalty and you expect a bit of loyalty back in situations like this, not a hard-nosed corporate attitude.

“LIC is a great company and they've brought a lot of firsts into the marketplace but they've got to be willing to rectify mistakes. In the past they've put it right.”

Federated Farmers is encouraging affected farmers to share their concerns with their LIC shareholder representative. “All co-operative members should be looked after."