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A massive shortage of vets would put the country at greater risk in a biosecurity outbreak and the deregulation of drug supply will only make matters worse, according to the New Zealand Veterinary Association.
A report by Business and Economic Research, commissioned by the association, highlights a shortage of manpower and the poor economic performance of most rural vet practices.
Association president John Maclachlan said there were 2150 registered practicing vets in New Zealand and a shortage of between 300 and 500 - most pronounced in rural areas.
"You can drive from Gisborne to Opotiki and there's not a single vet along the way," Maclachlan said.
If the shortage got any worse a foot-and-mouth outbreak could go undetected for weeks, he said.
"[If] we have a massive animal welfare issue and lose some of our international trade, or in the case of something like foot-and-mouth, lose all our international trade, the country's stuffed."
Rural vets were the equivalent of an unpaid standing army, Maclachlan said.
"A lot of what they do is basically for free for public good ... particularly with issues relating to biosecurity, food safety, animal welfare."
The report assessed the impact of the deregulation of the supply of prescription animal products on the viability of rural vets.
Rural vets historically set a margin on the sale of prescription products which allowed them to charge an artificially low professional fee for their services.
Deregulation took place nearly three years ago as part of the Agricultural Compounds and Veterinary Medicines Act and although no traders were operating, some companies were on the verge of starting up, Maclachlan said.
Farmers would still need to get a prescription.
In the event a rural vet had to drop the gross margin on prescription drugs to zero to maintain sales volumes, fees would have to be raised by 52 per cent to maintain profitability, the report said.
"I think we're on the verge of a huge problem and I think once we have the traders in prescription animal remedies, that really is going to be the final catastrophic step and you'll find areas of New Zealand that will have no rural veterinary presence there."
The Association had met with the Government and organisations including Ministry of Agriculture and Forestry, Biosecurity New Zealand and the Food Safety Authority.
"We would hope they'd come forward with some positive solutions to the problem," Maclachlan said.
Federated Farmers president Charlie Pedersen said farmers supported the argument that much work undertaken by vets was for the public good and there should perhaps be some recognition from the public purse.
However, farmers strongly disagreed that the deregulation of the supply of prescription products was part of the problem.
"We understand that that does erode profitability in the vet practices but a the same time we can never defend what is essentially a monopoly right," Pedersen said.
Vets should set fees at the right price and although there were not yet any supply traders operating, farmers could check prices between vets, he said.
"They [vets] will say, 'Oh well farmers just won't use vets'," Pedersen said. "That is hardly an argument for cross subsidisation to go on. It's actually up to the vet to show that they're adding value and to actually demonstrate that to farmers."
Farmers could get access to vets if needed, Pedersen said.
"But I think farmers would be concerned that in those areas it will be more expensive to get a vet than what it was and I guess that's just a reality of living in the areas further out."
Industry association, Agcarm, whose members include manufacturers of animal health products, said the report reinforced the need to find ways to reverse declining rural vet numbers.
Chief executive Graeme Peters said the association was concerned because it wanted products used properly in a timely manner.
"Fewer vets in rural areas raises the risk of farm animals not being examined and diagnosed by vets or, at least, not in time for the animals to be treated effectively," Peters said. "Animal health companies rely on vets to prescribe the right product in the right amounts at the right time. With fewer vets, this might not happen."
