Federated Farmers wants the Government to provide farmers in financial strife because of the Mycoplasma bovis cattle disease outbreak with promisory letters for the bank while they await compensation.

Dairy chairman Chris Lewis said farming is all about planning and farmers who've had whole herds destroyed in the biosecurity effort to contain the new disease have no income to resurrect their businesses while their claims for compensation drag on.

"We accept the need for the Government to want accountability [around farmer claims] and that there's disappointment if compensation doesn't happen quickly, but they can't just leave farmers hanging like this," Lewis said.

"If a farmer needs to buy a new herd, now is the time to be doing it. They need a deposit at least to be enable them to move on from the disease and plan for next season (which starts on June 1). The bank won't continue to support them if they have no income.


"The quickest way would be for MPI (Ministry for Primary Industries) to write a letter saying they have received a claim from the farmer who can expect to be compensated whenever. The farmer could take that to the bank. Farmers are going broke because they have no income and can't plan."

But MPI, which by this week had finalised just three out of 31 claims totalling $6.9 million, has ruled out the federation's idea.

Response director Geoff Gwyn said MPI could not confirm a compensation payment would be offered until a full assessment of a claim had been undertaken, regulatory requirements met and the "appropriate" sign-off received.

MPI did however offer to talk to affected farmers' banks to inform them of the compensation process, he said.

MPI has ordered the destruction of another 20,000-plus cattle, mostly in the South Island, before the new dairy season starts in an effort to contain the bacterial disease first identified in Oamaru dairy herds in July last year. MPI does not yet know how it arrived in New Zealand.

The debilitating and economically costly disease is established in many countries overseas, including New Zealand's trading partners, which have elected to try to manage it. New Zealand is the first country to try to eradicate it with a mass cattle cull as MPI does not believe it is yet well-established here. It affects dairy and beef cattle.

Lewis said there were biosecurity and economic risks in leaving farmers financially stranded.

Farmers having to start again needed to buy the "right" animals and as many as possible at one time. Only being able to afford a handful of replacements from different places and properties to make up a herd was a biosecurity risk, he said.

The economic risk would come when eventually compensated farmers all hit the livestock market at once, distorting and pushing up prices.