NEW South Wales sheep and goat producers are seeking a national electronic tag procurement strategy after being denied funding for tags in the latest $38 million package announced this week.

State Governments in Western Australia and South Australia have proposed EID tag price rebate schemes for their sheep and goat producers, while in Victoria approved National Livestock Identification System tag prices are effectively discounted to producers through a tender process, grower levy funds and online ordering bypassing resellers.

At the NSW Farmers conference on Wednesday, NSW Minister for Agriculture, Regional NSW and Western NSW, Tara Moriarty, announced her government and the Federal Government would contribute more than $38 million to implement mandatory sheep and goat electronic identification across the state.

After the announcement, NSW Farmers Sheepmeat Committee chair Jenny Bradley called on the NSW and Australian Governments to initiate a national tag tender to support the reduction of NLIS EID device costs.

NSW Farmers policy seeks EID tags for sheep costing no more than $1 per tag; however, NSW Farmers Sheepmeat Committee vice chair Floyd Legge confirmed today the $38m would not be used to subsidise tag producers’ costs.

“The NSW Government said it (the $38m) does not include anything for tags.

“It’s disappointing in one way, but in another way it is better if a tag procurement program is national, because all states get the benefit of it,” he said.

“They said (the NSW Government) at this stage their preference is that industry is the best place to do this, rather than governments stepping in, and governments will step in only if there is complete market failure.”

Mr Legge said the best way to resolve the issue is through a commercially competitive process rather than governments putting money into to subsidise it over the short-term.

“There needs to be a long-term commercial system put in place.”

Mr Legge said EID infrastructure – readers, hardware and software – were a big one-off cost for all sectors of the supply chain, but ear tags were the highest recurring cost item for producers.

“So therefore there needs to be a recurring ability to keep tags to the lowest price that is commercially possible through a competitive program through.”

Tag manufacturers have told Sheep Central that a national tag tender might mean bypassing resellers as happens in Victoria, but Mr Legge said cutting out rural resellers had problems.

“Sure you might get cheaper tags but it would have an impact on the viability of their businesses which are an essential part of our rural communities.”

Mr Legge settling the tag price issue is a top priority, as is having a national database that is fit for purpose.

“Tag price is the most common issue brought up by producers.”

But Mr Legge said NSW Farmers is not necessarily proposing extending the Victorian tag tender system nationally.

“I don’t think that is sustainable – the one thing that we would like to see is whether there could a levy on downstream stakeholders – saleyards, restockers, meatworks – for a monetary collection to go into a pool to help reduce tag prices.

“The producers are wearing that recurring cost while others in the supply chain are achieving additional value by using this technology,” he said.

“There needs to be equitable cost sharing across the industry.”

NSW Farmers conference this week failed to carry a motion that when sheep EID tags become mandatory, sheep meat processors should pay a levy on each sheep at least equal to the price of an EID tag plus a contribution to the cost of reading the tags in sale yards. However, Mr Legge said the motion failed because it was felt the cost of the levy would be passed back to producers, but NSW Farmers still support more equitable cost sharing along the supply chain.

What’s happening on a national tag procurement system?

Sheep Producers Australia chief executive officer Bonnie Skinner gave a national tag tender/ procurement update to the NSW Sheep and Goat Traceability Reference Group in late February and in March told Sheep Central that SPA had sought support from the Federal Government to develop and implement a suitable industry-led initiative to support national tag procurement for producers.

However, four months later, SPA today said the independent consultation process with members and stakeholders is about to commence.

“Sheep Producers Australia has sought independent advice regarding a national tag procurement model and will be undertaking consultation with our members and a range of stakeholders.

“We are still awaiting the outcomes of that project,” Ms Skinner said.

The objective of the national procurement project is to evaluate sustainable models that would ensure that all sheep producers have access to equitably priced tags from multiple suppliers across Australia, as part of the mandatory national implementation of EID.

SPA said phase one of the project was received in late February 2023; however, SPA has not been prepared to disclose what independent advice it has received.

Sheep Producers Australia has initiated further work as phase two of the project, that will include extensive stakeholder consultation with SPA members and key stakeholders. A completion date for the project has not been confirmed.

Sheep Producers Australia’s Federal Budget submission asked for funding for the project, but it is currently funded solely by the peak organisation.

Sheep Central has been told that tag manufacturers can only reduce the price of tags by bypassing resellers either by selling direct to producers or by a subsidised rebate system.