Alliance not paying cartage

The Alliance Group is not following the lead of Silver Fern Farms by paying the cost of livestock cartage, claiming the move is a procurement incentive.

Alliance chief executive Grant Cuff believed Silver Fern Farms was meeting the cost of cartage to compensate for not being competitive in lamb yield and quality payments.

Mr Cuff said farmers would pay somewhere along the way.

He gave the example of the North Island, where companies traditionally met the cost of carting stock but farmers paid dedicated meat inspection charges for lamb and sheep meat.

"They don't pay cartage but they do pay a meat inspection fee [of $1.40 to $2.30 a head] which, I suggest, is higher than the cartage cost," he said.

Silver Fern Farms (SFF) introduced the transport policy this month to better co-ordinate the movement of stock, to reduce its carbon footprint and also to provide transparency, saying some South Island processors were paying cartage to secure the purchase of livestock.

Farmers traditionally paid cartage to their closest export meat works and for a farmer in Middlemarch selling 5000 lambs a year, it could equate to $10,000.

But Mr Cuff said meeting all transport costs was an averaging payment, because those farmers living closest to a meat works would end up subsidising those who lived further away.

He believed Alliance could manage livestock transport it operated efficiently.

"We do not plan to amend our transport structure at this time,"he said.