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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