The Government's decision to ban live sheep and cattle exports will cut off a $261.5 million revenue stream for rural communities, according to an analysis by the Ministry of Primary Industries (MPI) and Treasury.
However, continuing to export livestock could come at the cost of New Zealand's wider reputation
and put "$33.7 billion of trade in animals and animal products at risk".
The figures come from a Regulatory Impact Statement (RIS) produced by MPI and Treasury.
The Act Party's primary industries spokesman Mark Cameron said the RIS showed the ban was "purely an emotive and ideological decision, instead of one based on sound advice".
But Agriculture Minister Damien O'Connor said the Government's "decision was about animal welfare, and both protecting and positioning New Zealand's reputation as an exporter of high quality, ethical and sustainable food and fibre.
"Our reputation helps protect and drive value for our products because consumers increasingly want their food produced sustainably and in accordance with the highest animal welfare standards," O'Connor said.
The RIS said that "some stakeholders" had warned that any involvement in livestock exports could result in "reputational damage".
"Even if it could be proven that the incident did not involve New Zealand animals, the public may conclude that our animals could face a similar outcome".
It said this could mean that protecting the industry for the sake of its $261.5m worth of direct economic benefits "in effect puts $33.7 billion of trade in animals and animal products at risk".
MPI thought that the reputational impacts were "real, but difficult to quantify". It thought those risks could be managed through "enhancing the regulatory framework for livestock export". However, MPI noted that New Zealand regulators could not have control over exports once they left New Zealand.
The statement warned that some businesses are likely to feel a "significant" hit from the ban, but the effect on individual farmers would vary.
"Overall, livestock exports make a small but important financial contribution to individual farmers by helping diversify their income streams.
"Exports support farmers financially when domestic market and environmental conditions (for example droughts) are unfavourable," the statement said.
The effects could be widespread. About 5000 farmers across the country have supplied breeding cattle for export in the last 10 years.
The analysis warned that a ban would see some rural communities suffer economic losses, which would flow on to other primary industry businesses like vets, transport companies, and stock handlers.
Cameron said the RIS showed that the advice "against banning live exports was overwhelming,"
"As usual, Labour banned it without thinking about the consequences, it was an entirely ideological decision," he said.
O'Connor said the slow implementation of the ban would give farmers time to adapt.
"We've indicated the practice will have two years to unwind so that farmers, exporters and trading partners can adapt.
"Treasury's advice is just one perspective and was considered by Cabinet during the decision to wind down the practice of live exports by sea," he said.
