Scare set to hit meat trade

Waiheke Island. Picture / Dean Purcell

The Government is bracing itself for the international reaction to what is believed to be a foot and mouth hoax.

Agriculture Minister Jim Sutton said last night the suspension of meat exports by some countries was a real possibility.

The crisis was triggered by a letter sent to Helen Clark that claimed the disease had been deliberately released on Waiheke Island.

Nervous eyes will also be fixed on the New Zealand dollar today as international markets continue to respond. The dollar dipped almost half a cent when news of the possible outbreak hit brokers' screens late today.

Westpac senior currency strategist Johnathan Bayley said "spooked" overseas investors were the main sellers and there was a distinct possibility the kiwi would trade lower overnight as the news spread around the world.

Mr Sutton said overseas trading partners had been contacted. He would not be surprised if "one or two countries" imposed an export ban, but he hoped most would accept officials' view that the scare was a hoax.

But he conceded a more damaging international reaction was possible.

Suspensions by just a couple of countries could still have a long-term economic impact, he said.

After a fruitfly outbreak some years ago, some countries took up to five years to lift trading bans, long after the threat had disappeared.

The Ministry of Agriculture and Forestry (MAF) together with police revealed details of the threat yesterday, moving to prevent the movement of livestock and associated risk material from the island.

MAF biosecurity director Barry O'Neil said it would take four to seven days for any symptoms of the disease to appear and it could be two weeks before all animals on the island were tested and it was established they were disease-free.

Mr Sutton said unless the culprit - who "has to be crazy" - was caught earlier, the country was in for an "anxious wait".

The threat was contained in a letter received in the Prime Minister's office this morning, claiming foot and mouth disease was released on the island on Monday.

The letter sought money and a change in the country's tax policies, and threatened another release of the disease elsewhere this week.

Both the police and MAF maintain the letter is probably a hoax and say there is no evidence to suggest there has been a deliberate release.

But they nevertheless have no option but to treat the threat to the country's $10 billion agricultural industry seriously.

The virus does not usually affect people or their safety, infecting only ruminant animals such as sheep and cattle.

There are an estimated 2500 cattle and 18,000 sheep on the island.

MAF officials began arriving there yesterday, moving to contain livestock and other risk material including hay, equipment used with animals and untreated animal products such as milk. Three police officers from Auckland were also sent to the island to investigate.

Neither the police nor MAF would give any further detail about the letter's content, except to say it had passed through a Manawatu postal sorting centre. Police assistant commissioner Peter Marshall said the centre dealt with letters from a large part of the lower North Island and Wellington police were in charge of hunting for the suspect.

None had been identified late yesterday, he said.

The letter named where the threatened further release of the disease would take place, but police are refusing to disclose the location or any further information about the letter's details.

The police are urging people with any information about the threat to come forward.

Dr O'Neil said there were several reasons why the threat was considered a hoax.

It was considered highly unlikely the disease could be successfully smuggled through border controls into the country. Secondly there was a "very low probability" of the virus surviving such a journey in "viable" form, he said.

Mr Marshall said the nature of the letter and the way it was written contributed to the suspicion.

There is no virus contained in laboratories in New Zealand and Australia.

Hamilton-based Affco meat company chief executive Tony Egan said given the information available he was "reasonably optimistic" overseas reaction would not be extreme.

While the matter was serious "at this stage the overriding assumption is that this is a hoax. It would be foolhardy to encourage the market [to think anything else], because there's no solid evidence."

His company did process meat from Waiheke, but had not processed any since Monday, he said.

Federated Farmers president Tom Lambie urged farmers not to panic, stressing "this is not a confirmed outbreak".

The Government was right to announce details of the probable hoax, as uninformed speculation would have been damaging, he said.

In August 2003, a rumour that New Zealand faced an outbreak of foot and mouth disease caused the kiwi dollar to plummet.

The unfounded rumour, which swept British fsinancial markets overnight, died almost as soon as it started but still wiped more than a cent off the New Zealand dollar as speculators bailed out.

Trading at 73.22USc ahead of the news last night, the kiwi dropped down to 73USc, recovered marginally as the Reserve Bank of New Zealand circulated a MAF press release to brokers - then dipped to 72.77USc.

An outbreak of the disease could have a severe effect on the country's economy.

Mr Lambie said a report released in 2003 found a limited foot and mouth outbreak could slice $10 billion off the country's GDP and 20,000 jobs.

Farmers on Waiheke Island last night were surprised MAF had not contacted them directly.

Ron Stevenson, who owns a small farm block with 120 sheep, found out about the scare from the Herald's website. "If they wanted to get into it quickly, I would have thought they would have called us."