In 2021/22, around 150,000 livestock were exported by sea, with a total value of $382m. All livestock exports by sea were cattle to China, largely for new dairy farms. Under the Animal Welfare Amendment Bill, this trade will cease. The Bill seeks to ban the export by sea of cattle, deer, sheep and goats from April 30, 2023. What costs and benefits will this policy have on wellbeing in New Zealand?

TDB and Infometrics recently teamed up to undertake a national wellbeing analysis of the ban using Treasury’s Living Standards Framework. This report was commissioned by Austrex, a major livestock exporting company. Our report employs a combination of short and medium-term economic modelling and qualitative analysis, including farm-level modelling, multiplier analysis and general-equilibrium modelling (using the ESSAM model).

The ban imposes a range of costs and benefits, some of which can be quantified in monetary terms and some which can’t. The ban is likely to impose a net monetised cost on national wellbeing, primarily in the financial and physical capital domains, of around $475m p.a. in the short run and around $320m p.a. on an ongoing basis. These costs to financial wellbeing will be concentrated around rural communities with net costs of around $49,000 to $116,000 p.a  per farm incurred by around 1,060 to 2,900 farms. The ban also creates a number of non-monetised wellbeing costs and benefits within the natural environment and social cohesion domains such as the gains and losses to animal welfare and to New Zealand’s international reputation.

With ongoing monetary costs of $320m p.a. arising from the ban, the non-monetised net benefits – ie, the net benefits to the natural environment (other than the reduction in CO_2e emissions which is included in the monetised benefits) and the net benefits to social cohesion, if any, would need to be judged to be worth more than $320m p.a. for the ban to enhance overall national wellbeing.

For the details, see the final report or the summary table below.