Overseas dairy rivals are "laughing their heads off" as the Government kills New Zealand's cows in an overblown reaction to the discovery of Mycoplasma bovis, says the invader cattle disease's first known victim, Aad van Leeuwen.

The South Canterbury farmer, who said his losses because of the Ministry for Primary Industries (MPI) response will run to $13 million, spoke out on the eve of Cabinet's decision today on how New Zealand will handle the disease in future - by killing suspect cattle or learning to live with it on a confirmed outbreak basis.

Unconfirmed reports suggest the potential cost to the economy of getting the disease under control either way will be about $1 billion - in lost productivity and response costs. The onus will be on Cabinet, whose decision is expected today, to firm up the cost and a timeline.

Meanwhile, independent economist Cameron Bagrie said there was "no point trying to make an economic assessment by pulling numbers out of thin air".

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"We know it's bad, and we know it's material," he said.

Leaks from Wellington suggest MPI officials will recommend phased eradication through pro-active killing of cattle carrying the organism.

This will likely be ridiculed by Canterbury and Southland farmers like van Leeuwen whose properties dominate MPI's current tally of 38 farms where the organism is present and who believe it is widely spread and well-established.

But it could be cheered in much less-affected North Island regions such as dairy heartland Waikato which has only one positive identification so far.

M. bovis is an animal welfare issue not a food safety threat. It doesn't affect milk or meat for human consumption and is found in the herds of New Zealand's trading partners, with Norway now the only country free of the organism.

Of the 38 positive farms, only the van Leeuwen operation has had an officially-recognised physical outbreak.

The others have been identified by MPI tracking of cattle with links to the suspect source farms.

More than 22,000 cattle, the majority dairy animals and showing no symptoms, will have been killed under MPI's preventive spread orders by June 1, the start of the new dairy season when thousands of cattle are moved around the country.

Federated Farmers has said that equals four cows per herd nationally.

Van Leeuwen, who has farmed in New Zealand for 33 years and has "no idea" how M. bovis entered his land but reckons it has been in New Zealand unrecognised for two decades, lost 3000 cows from the 12,000 strong milking herd on his four Waimate farms to the cull order in November and December last year. The disease was diagnosed on two of his farms in July.

Another 1100 cows owned by van Leeuwen's 50:50 sharemilker on one of his properties were also ordered to be killed.

Of all the animals on the van Leeuwen farms only 400 were showing physical symptoms of illness – incurable mastitis - and warranted killing, he said.

The other animals had obviously developed anti-bodies to the disease, but were still killed, he said.

His farming operation had lost 1.2 million kilograms of milk solids production plus a three-month winter milk contract worth $750,000.

"Our competitors in Australia, Europe and America are standing on the sidelines laughing their heads off – I've heard that already," said van Leeuwen, who believes there are worse cattle diseases in New Zealand and that M. bovis "has been completely blown out of proportion".

Our competitors in Australia, Europe and America are standing on the sidelines laughing their heads off – I've heard that already.

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"They're saying 'good on you New Zealand' our payout is going to be up in a couple of years (because cull will depress NZ milk production). We're good at hanging ourselves."

He said the big kill response is "setting up the industry for a big outbreak one day" because the national herd won't develop resistance as exposed cattle have overseas.

The counter-argument is that New Zealand farmers' milk payout would also benefit from any global milk production squeeze. One commentator also suggested aggressive efforts to eradicate a disease that may not yet be well established supported New Zealand's efforts to be a global animal health and welfare leader.

"Overseas experts told MPI (at the outbreak) they should be going out and bulk milk testing the nation twice a week for three to four months. That would have given them a pretty good picture (if it had spread). But they were in such a hurry to kill to show the public they were on to it, so our cows got killed. There was no need for it," said van Leeuwen.

MPI responded in a written statement: "We understand that Mr Van Leeuwen is a very experienced farmer in a difficult situation in this response. However, he is not an expert in animal disease or international trade. MPI employs skilled PhD-level scientists and veterinary disease experts with advanced training, who in turn liaise closely with international experts. We can assure you that all of the actions taken to date, while difficult, have been done with the ultimate aim of protecting New Zealand's farmers. These decisions have been aided by scientific and technical advice from throughout the world."

"In the early days of the response we did bulk milk testing in the three regions affected at that time - Canterbury, Otago and Southland. In January we extended this to a national bulk milk testing programme.

"We did consider national testing of bulk milk samples in the opening days of the response, along with other surveillance methods. However, the situation has been a rapidly evolving one and MPI's surveillance programme moved in accordance with the knowledge of the disease and input from international experts. Our surveillance is focused on searching in the places the disease is most likely to be present and has been developed by MPI's skilled scientists along with advice from Massey University's EpiCentre - the largest veterinary epidemiology training and research centre in Australasia. It is widely considered to be one of the leading groups in the world."

Federated Farmers dairy chairman Chris Lewis said farmer reaction to today's decision by Cabinet would depend on where they were on M. bovis understanding and experience which he likened to "five grief stages".

"People don't want it on their farms, full stop. Most people want it eradicated in the Waikato I guess. Canterbury people who've got it want it controlled and better (biosecurity) rules. Waikato thoughts are different from those in Canterbury and Southland."

But Cambridge farmer Garry Reymer, who farms near the only positive-returning Waikato farm and attended an M. bovis meeting at Karapiro last week which attracted more than 750 farmers, challenged an eradication decision.

"That beggars the question what they're (MPI) doing about border security? They've identified seven areas where it could have been imported. They've ruled importation of cows out. That leaves six."

Reymer said MPI officials at the meeting didn't answer his question.

Cabinet to decide on the weapon for cattle disease fight but army is divided. Photo / Duncan Brown
Cabinet to decide on the weapon for cattle disease fight but army is divided. Photo / Duncan Brown

Cattle disease takes its toll

Seven months ago van Leeuwen's dairying operation lost more than $7m in milk production overnight when MPI ordered his cows killed in response to the first diagnosed M. bovis outbreak on his South Canterbury farm.

Until about three weeks ago he said he had only received 40 per cent of the compensation owed to him under the Biosecurity Act.

The compensation does not include the value of the cows, which takes his losses to $12m-$13m, he said.

Recently MPI's handed over some more money, taking the tally to 70 per cent.

His family's been living on a doubled overdraft, the bills on the kitchen table are piling up and the bank is antsy and on his back.

Only 400 of van Leeuwen's cows were actually sick, but 3000 were ordered to be killed, he said.

His sharemilker lost 1100 cows and is down to his last $2000 as he awaits compensation, said van Leeuwen.

"It's totally unacceptable why it's taking so long. Everything was agreed to (by MPI), the valuation was done by an organisation picked by the Government. No-one ever knows what the hold up is. Personnel change and we have to start (chasing up) all over again. It's typical bureaucratic behaviour. We can only keep this business going so much longer."

MPI's performance in paying compensation has, by its own admission, been slow during an already traumatic time for affected farmers.