M bovis levy comes into effect in September

New Zealand's 12,000 dairy farmers will start paying a new milk levy in September.

As part of a government industry agreement, dairy farmers are required to cover 30 percent of the estimated $880 million cost of eradicating the cattle disease, Mycoplasma bovis.

In February Dairy NZ started consulting with its farmer members on a proposal how to pay its share of the M bovis response.

Chief executive Tim Mackle said it had been decided that a levy would be set at 2.9 cents per kilogram of milksolids for the 2019-20 dairy season.

Based on a 430-cow farm, dairy farmers would pay on average $4300 each from 1 September 2019 to 31 May 2020, Dr Mackle said.

"We obviously want to keep the costs as low as possible for our farmers, but at the same time we have a share that needs to be repaid. It took some time after the consultation for the regulatory process with MPI and we're now in a position to collect the levy, giving farmers more than 30 days' notice," he said.

Dr Mackle said this money would be collected by dairy supply companies.

He said any changes to the levy amount for the next dairy season would be communicated in April 2020.

"Our continued focus on the M bovis response is vital, as is support for affected farmers," Dr Mackle said.

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