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Artificial insemination in the dock -

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ELEANOR HALL: It's used to breed cows and pigs, and birds and bees but artificial insemination is
not, it seems, acceptable in the world of thoroughbred racehorse breeding.

But that could be about to change if court action launched by a Sydney racing identity succeeds.

Bruce McHugh is the former chairman of the Sydney Turf Club and he wants the Federal Court to rule
that the ban on artificial insemination is illegal.

But the industry says his action could jeopardise a multimillion dollar industry.

As Shane McLeod reports.

SHANE MCLEOD: Bruce McHugh says if it wasn't for the restrictions on the use of artificial
insemination imposed by the Australian Racing Board, the Australian Jockey Club, and the Victoria
Racing Club, there would be a competitive market in the breeding of thoroughbred racehorses.

And he's asking the Federal Court to rule that it amounts to restriction of trade under the Trade
Practices Act.

The chief executive of Thoroughbred Breeding Australia Peter McGauran says if he succeeds he could
jeopardise the viability of a major export industry.

PETER MCGAURAN: Every other major breeding country, and racing for that matter, around the world to
which Australia exports more than 2,500 horses for in excess of $100 million, will exclude from
those markets any horse that is conceived by way of artificial insemination and possibly even those
conceived by way of natural serve.

SHANE MCLEOD: On legal advice, Bruce McHugh isn't speaking today but his case is due in the Federal
Court for a directions hearing next week.

Industry figures expect it could drag on for months, even years, and cost the involved parties
millions of dollars in legal fees. It's a sign of the high stakes at play that no-one's backing
down.

Andrew Harding is the chief executive of the Australian Racing Board.

ANDREW HARDING: AI's been a longstanding ban internationally and that really goes to the heart of
this issue. There's been talk of challenges from time to time in various countries. I suppose I've
got to say it was inevitable that a legal challenge would crystallize some place. It just so
happens it's been in Australia and that's where we find ourselves.

SHANE MCLEOD: And to date, the industry has proved resilient in the face of the technology.

While a quick search of a phone directory or the Internet will show any number of vets and
contractors able to offer horse insemination services, and the technology is used in breeding
horses for pacing and the trots, the thoroughbred industry has been able to resist it.

Richard Denniss from the Australia Institute looked at the structure of the thoroughbred industry
in the wake of the horse flu outbreak in Australia in 2007.

RICHARD DENNISS: It became clear in the inquiry that followed the argument for the ban on
artificial insemination are entirely circular. The Australian breeders suggest that the
international rules say they can't do it, but international governing body says the only reason
they can't do it is because the member countries say they don't want to do it.

So there's no good reason for doing this but while I'm always worried to hear about cartel activity
I guess my concerns for this are much broader in that the Australian taxpayer picked up a $260
million bill and it was a stud brought into Australia that was the original vector, the original
source of the equine influenza. So we carry the risk for their antiquated practices.

SHANE MCLEOD: Richard Denniss says it's clear there would be economic and animal welfare benefits
to reducing the number of horses transported for breeding.

RICHARD DENNISS: Let's get this right - when we breed really fast horses they run around so we can
bet on them and the horses that run really fast, we put led in their saddles and slow them down. So
I think, you know, this is not the biggest public policy problem around.

I've got no problem with people going and spending their money at the horse races but let's not
suggest that flying all these horses around the world so they can breed when, you know, every other
livestock industry like pigs or cattle or anything else, people have been using artificial
insemination for years.

Why do you think it is the industry's clinging to the rules that prohibit this?

Look there's the reason that, the reason seems to be that some people like the system the way it
is. It would appear that the costs of breeding would be significantly lower if you could just
import the artificial inseminate.

But clearly some people, you know, who are in the business of transporting these horses around
might be a bit reluctant to see that new technological change.

ELEANOR HALL: That's Richard Denniss from the Australia Institute, ending Shane McLeod's report.