b4breeding

Below is the proposed new scheme currently out for consultation for members of New Zealand Standardbred Breeders Assn, closing 31 July 2015. The proposal was developed by the North Island branch of the association. The intention is good, but the scheme is diverting scarce funds into something that does not reward breeders and breeding success.

I’ve mentioned before my concerns about the way proposals like this are developed and decisions made. There are three issues I want to raise (independently of the merits of this particular proposal).

1. Proposals seem to arise and be considered in isolation. There seems to be no effort to get agreement on the overall objectives (criteria) and then to canvas some options. This ad hoc approach to significant commitments means we end up with a mix of activities that do not hang together well, and the reasons for pursuing one and not others is not transparent.
2. Consultation is not a forte of the NZSBA. A significant proposal like this would ideally have been a feature of presentations/discussion at the breeders forum earlier this year, but it was hardly mentioned. When the issue of breeders credits/bonuses was raised in a short “brainstorm” session, the session facilitator (John Mooney) put it aside. The longest topic for discussion at the forum was on conditioning of races – a topic of interest more to owners than breeders. Even the development of the proposal by the North Island Branch seems to have been done very much “in house”. I understand that I am a member of that branch (as a member of  NZSBA) but I am unaware of any effort made to consult with branch members before putting the proposal forward to the national body.
3. The bias towards schemes that benefit owners rather than breeders concerns me. This was clearly apparent at the forum mentioned above. The argument is that a high percentage of breeders are also owners. Surely that begs the question: Why aim to support a percentage of breeders when you could develop schemes that support 100% of breeders, just by ensuring the benefits/credits return to direct to breeders rather than to owners?

Specifically, my objections to the proposed scheme is that it ignores the very real plight of current breeders. It may be more effective (and quicker acting) to increase breeding numbers by targeting current breeders (especially those in the 2-5 mare type of group which is a significant percentage of breeders) rather than invest in potential owners of mares who may or may not choose to breed from them. The current 2-5 mare breeders are hobby breeders on the cusp of being more commercially focused. In the current climate, they have to choose each year to drop breeding numbers or increase them, very much based on perceived risk (usually financial). They cannot retain ownership of all the foals they do not sell. That becomes a very high cost for them. So they will reduce their breeding instead. They are already knowledgeable about and interested in breeding. They may need only a small but tangible “knudge” to add a couple more mares or keep breeding from their total number of mares, or to upgrade some of their mares, or go to more commercial sires, or to feel able to retain a filly foal for racing and breeding. Accumulating service fee “credits” based on breeding success would be a real boost and cost-saver for smaller breeders.

The biggest flaw in the proposal is that the rewards of breeding a winning mare do NOT go back to the breeder of that mare, but instead will be assigned to the racemare and her current/future owner. In many cases, this will no longer be the breeder.

Therefore a successful breeder may watch a racemare accumulating credits for a future or current owner, and meanwhile be downsizing his/her breeding band because there is no incentive or reward coming back.

Why not reward the mare who foaled the winning racemare? Or the breeder who made the decisions and put in the money and work to produce the racemare in the first place?

Encouraging owners to buy, race and breed from fillies is a very valid objective – and the same North Island Breeders Assn has already put in place an ownership syndicate to test this route out. Originally intended to have two fillies raced by the syndicate, the numbers applying to join were too low to support that and so there is just one filly now racing, Everlasting Grace. It is a good scheme and it will be great to see how it translates from the owning/racing syndicate to the breeding side of things. Let’s give that concept a chance, or develop it further, before adding yet another scheme that focuses on racehorse owners.

Looking long term is something I support. But we need to balance that with something more immediate to recognise the situation breeders are in right now.

Some tweaks to the proposed scheme would give it a more immediate benefit to current breeders and provide an incentive to new breeders coming into the industry (whether they are owners or not).

Then the $250,000 to $300,000 cost will be a true investment in standardbred breeding, and a significant “pull factor” in attracting and retaining breeders.

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North Island Breeders’ Association Proposed Broodmare Incentive Scheme – Submissions sought.

This paper outlines a proposal for a breeding initiative based on the Western Australian EPONA Mares Credit Scheme. The beneficiaries of the scheme will be the mare owners, should they choose to breed from the mare once retired.

New Zealand Standardbred Breeders Association are seeking feedback from industry stakeholders on this proposal, all submissions welcome in writing by emailing kiely@harnessracing.co.nz or posting to PO Box 8270, Riccarton, Christchurch, 8440 by 31st July 2015.

Assumptions have been made based on three years analysis of foal crop data from 2002, 2003, 2004.

Assumption 1:     65% of winning mares go to stud

Proposal     
Establish a fund for payment of stallion service fees on a LFG basis to owners whose mares have accumulated redeemable credits from racetrack wins in New Zealand.

Estimated cost of scheme is $250,000 per annum based on 65% of winning fillies and mares going to stud.

Conditions:   

1. Applicable to fillies and mares aged three-year-old or older, who win any totalisator race in New Zealand;
2. 10% of winning stake to a maximum of $500 each win;
3. Total credits to be capped at $4000 per mare;
4. A maximum of 50% of the credit is available in the first breeding season and the balance in a subsequent season;
5. The credit is attached to the mare; it is not transferable; it does not survive the death of the mare or her becoming unable to conceive, and cannot be converted into cash;
6. The credits are not transferable in the event of death or export of the mare prior to foaling;
7. No payment from the Fund is required until the mare is served and tested positive 42 days.

Assumed Benefits:   

• Relatively low cost initiative;
•  Send a signal to the industry that owners of mares are an integral part of the industry;
• Will provide an easier entry into breeding for mare owners;
• Utilisation of mares increase – raced more often and for longer to accumulate maximum credits;
• Mares more likely to stay in New Zealand to redeem credits;
• Would appeal to smaller and potential breeders who may not otherwise breed their mare;
• Arrest decline in breeding numbers;
• Improve prices for fillies at weanling and yearling sales as buyers look to reinvest in potential broodmares.

Potential Funding Sources:   

• 2% levy on Stallion service fees, payable by stud (potential funding of $300,000 per annum)
• Reinstate DNA fees (potential funding of $220,000 per annum)
• HRNZ distribution account
• Racing Board grant (unknown and previously unsupported at NZRB level)

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