Proposed Animal Welfare Standards and Guidelines for Cattle


A3.3 Incremental cost of banning permanent tethering – Variation C3



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A3.3 Incremental cost of banning permanent tethering – Variation C3

Tethering of cattle is a minority practice associated with peri-urban cattle ownership. Variation C3 would involve an alternative to proposed Standard 5.6 whereby daily exercise of tethered cattle would be replaced by a complete ban on tethering. This would involve approximately 150 animals as discussed in Part A2.3 of Appendix 2. The impact of a ban on tethering would mean the cheapest option of having to mow lawns belonging to all houseyards and move cattle to suitable paddocks. Furthermore, for half the animals affected266it would mean having to purchase of at least 2 litres of milk for a household per week (taken to be around $3.70 retail per 2L). This would mean that abolition of such animals as the other alternative would be to install fencing around garden and flower beds to protect landscaped areas and contain the cows and would come at a substantial cost.


A rule of thumb in mowing lawns is $1 a minute. For the purpose of estimation it is assumed that mowing a house paddock (half an acre267) would take at least one hour and therefore would cost $60 and would need to be done at least twice a month. The annual cost of mowing per house paddock would be $60 x 2 x 12 months or $1,440 and the annual cost purchasing milk for half the house paddocks would be $192.40 per house paddock.
As shown in Table A3.9, the 10-year incremental cost of banning tethering under Variation C3 would be approximately $2.3m or $1.51m in 2012-13 present value dollars.
Table A3.9 – 10-year incremental cost of banning tethering by state and territory under Variation C3 –2012-13 dollars


Jurisdiction

No. of cattle permanently tethered

(t)268

Annual cost of mowing and milk purchases

(j3) = [(t)*$1,440]+[(t)*50%*$192.40]

10-year cost
(k3) = (j3)*10

NSW

100

$153,620

$1,536,200

VIC

10

$15,362

$153,620

QLD

10

$15,362

$153,620

SA

10

$15,362

$153,620

WA

10

$15,362

$153,620

TAS

10

$15,362

$153,620

NT

-

$0

$0

ACT

-

$0

$0

Australia

150

$230,430

$2,304,300

Present value 7% discount rate

 

$1,512,564

3% discount rate

 

$1,908,364

10% discount rate

 

$1,287,175



A3.3.1 Incremental cost of Variation C3 from the base case

The total 10-year incremental cost all standards under Variation C3, as compared to the base case, would be approximately $34.9m in 2012-13 dollars, as shown in Table A3.10.


Table A3.10 – Summary of quantifiable 10-year incremental cost of proposed standards under Variation C3 by state and territory – 2012-13 dollars


Proposed Standard

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

TOTAL

5.4

$659,785

$389,080

$466,945

$112,425

$109,972

$63,219

$6,169

$1,239

$1,808,834

5.5

$707

$0

$516

$218

$141

$303

$2

$0

$1,886

Variation of 5.6

$1,008,376

$100,838

$100,838

$100,838

$100,838

$100,838

$0

$0

$1,512,564

5.7

-$204,786

$15,285

$69,570

$6,111

$12,105

-$17,012

$8,377

$46

-$110,304

6.2

$0

$430,408

$1,407,205

$0

$271,041

$0

$202,620

$1,722

$2,312,996

6.4

$1,761,608

$1,414,142

$2,863,233

$0

$571,919

$0

$405,240

$3,444

$7,019,585

6.7

$0

$0

$2,744,628

$0

$119,428

$0

$233,819

$0

$3,108,356

6.8

$0

$0

$10,695,563

$0

$460,940

$0

$937,775

$0

$12,094,279

6.9

$0

$0

$498,747

$0

$21,494

$0

$43,730

$0

$563,971

7.2

$629,210

$626,245

$709,701

$249,252

$123,855

$139,955

$84,251

$941

$2,563,410

8.4

$130,859

$0

$57,447

$56,591

$39,028

$121,752

$0

$0

$405,677

9.2

$126,876

$721,321

$93,545

$44,965

$26,727

$0

$0

$0

$1,013,433

9.3

$4,233

$0

$0

$0

$1,262

$0

$0

$0

$5,495

10.2

$9,167

$4,028

$21,198

$1,889

$3,328

$794

$3,741

$15

$44,162

10.4

$91,299

$45,434

$205,956

$18,083

$35,943

$10,154

$24,450

$136

$431,455

11.5

$234,522

$1,419,300

$170,856

$81,537

$56,523

$157,587

$0

$0

$2,120,325

Total PV -7% discount

$5,468,261

$5,294,544

$20,202,641

$765,655

$2,073,300

$736,594

$1,950,173

$7,543

$34,896,126

Taking the total 10-year incremental cost of the standards in each state or territory in 2012-13 dollars (in Table A3.10) and the number of cattle in each state or territory (in Table A2.5) - the average cost per cow ranges from $0.64 in the SA to $1.61 in QLD, as shown in Table A3.11.


Table A3.11 – Range of average 10-year cost per cow as a result of the proposed standards under Variation C3 by state and territory –2012-13 dollars





NSW

VIC

QLD

SA

WA

TAS

NT

ACT

TOTAL

Total

$5,468,261

$5,294,544

$20,202,641

$765,655

$2,073,300

$736,594

$1,950,173

$7,543

$34,896,126

Total herd

5,583,931

3,385,850

12,539,625

1,199,640

2,009,382

611,583

2,197,359

8,807

27,536,177

Cost per cow

$0.98

$1.56

$1.61

$0.64

$1.03

$1.20

$0.89

$0.86

$1.27

Note: Care should be taken in using the average cost per cow in a jurisdiction to interpret the impact of standards or variations on a particular industry sector or an individual farmer’s herd.



A3.3.2 Incremental cost of Variation C3 from Option B

The total 10-year incremental cost savings under Variation C3 as compared to Option B (i.e. replacing the cost of proposed Standard 5.6 with the alternative under Variation C3) would be approximately $1.61m in 2012-13 dollars, as shown in Table A3.12. Variation C3 is likely to impose less total cost than under Option B (the proposed national standard) as this option would save the time cost imposed by proposed Standard 5.6 under Option B in having to exercise tethered animals daily. Hence, compared to mowing lawns and buying milk (under Variation C3), having to exercise a tethered animal daily (under Option B) the latter becomes a more expensive exercise.


Table A3.12 shows the 10-year incremental cost savings of Variation C3 as compared to Option B by state and territory. These estimates are provided from tables A3.9 and A2.25 in Appendix 2. The main impact (saving of costs) of going to Variation C3 as compared with Option B would be on NSW.
Table A3.12 – 10-year incremental cost of Variation C3 as compared to Option B by state and territory –2012-13 dollars


Going from Option B to Variation C3

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

TOTAL

Less proposed standard 5.6 under Option B269

$3,084,632

$349,328

$300,924

$296,437

$334,535

$395,855

$0

$0

$4,761,711

Plus alternative to proposed standard 5.6 under Variation C3270

$1,536,200

$153,620

$153,620

$153,620

$153,620

$153,620

$0

$0

$2,304,300

Net Difference between Option B and Variation C3

-$1,548,432

-$195,708

-$147,304

-$142,817

-$180,915

-$242,235

$0

$0

-$2,457,411

PV (7% discount rate) Net difference between Option B and Variation C3

-$1,016,406

-$128,465

-$96,691

-$93,747

-$118,754

-$159,005

$0

$0

-$1,613,068




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