Thoroughbred Breeders Australia head Peter McGauran has warned that breeders face having a compulsory levy imposed to fund the cost of defending court action being taken against the AJC and VRC, proprietors of the Australian Stud Book, Australian Racing Board and RISA by Bruce McHugh.

McHugh has launched the Federal Court action, seeking to overturn the ban on registering and racing thoroughbreds conceived by artificial insemination in Australia.

Asked who would be imposing the levy, McGauran was at pains to point out that he has been informed that it would be the Stud Book, who would charge stallion owners and breeders.

This situation is preposterous, given that McHugh's claim is based in part on the fact that the Stud Book has a monopoly on such services in Australia and is improperly using it by refusing to register his horses.

Accounts for the Australian Stud Book are not available publicly, but as it is owned by the AJC and the VRC in a 50/50 partnership, some information can be gleaned from their financial statements.

These show that in the 2007-08 year, the AJC and the VRC each booked a profit share of $738,000 from partnership income. Last financial year the amount was $627,000 each. For an investment of £1,000 each in 1911, the Australian Stud Book is a gold mine for the joint proprietors.

And there's more. In the VRC annual report last year, it revealed that the partners have carved out a new venture from the very profitable DNA testing business the Stud Book has developed in conjunction with the University of Queensland.

"The ASB has for thirty years partnered with Queensland University and its Australian Equine Genetic Research Centre (AEGRC) for the verification of the parentage of all horses eligible to be accepted into the ASB."

"More recently, AEGRC has pioneered DNA profile testing for the ASB as well as for other horse breeds, which has enabled both entities to share additional revenues generated from the laboratory."

"Early this year, the joint proprietors of the ASB decided to create a new business entity, Australian Genetic Testing (AGT), to exploit the opportunities available from the Club’s significant investment in AEGRC’s laboratories. AEGRC is already considered a world leader in DNA profiling and this will assist AGT in generating new business opportunities from the DNA testing of laboratory animals for research into human diseases and also other research that requires DNA profiling."

"AGT will provide VRC with an exciting new, non-racing, revenue generating opportunity."

So via its monopoly the Australian Stud Book has generated sufficient profit to enter the lucrative world of biotechnology - all funded by Australian thoroughbred breeders.

Now the Stud Book is proposing to charge those same breeders for the "privilege" of paying its legal fees to defend an action brought about by its own disregard for the Trade Practices Act.

According to McGauran, even if McHugh is unsuccessful the various parties will be up for $800,000 of legal expenses and if he wins the cost will be $1.6 million.

That is of course if they decide to defend the action.

As far as I can see there is no pressing need to do so. Both the AJC and the VRC these days are just race clubs. In spite of fond memories of a bygone era, they have no role in directing the future of the Australian, let alone the global racing and breeding industry.

So for them to spend any money to defend an indefensible monopoly is unnecessary in the first place.

Secondly, to expect Australia's breeders to pay for the costs of their own mismanagement of the situation is questionable at best.

While TBA seems wholeheartedly in favour of AI being banned, McGauran was ambivalent about the imposition of the levy, saying his body would want to know all the facts before supporting it.

However, the TBA speaks mostly for the 20 or so big stallion owners that dominate the Australian industry. The 9,000 or so smaller breeders may well have a different view of the merits of AI, especially if they are in possession of the full facts.

For instance, Arrowfield Stud proprietor John Messara has released research done by his own vet which supposedly proves that AI produces a lower fertility rate than natural service. Given that Arrowfield is a strong supporter of the status quo, it is not surprising to see it slanting the argument in favour of natural service.

It is however disappointing to see that the AI figures quoted relate to frozen semen, which is a lot less effective than the chilled semen which would be used if AI in thoroughbreds was permitted here.

Even among the big breeders, opinions are divided. Vinery and Baramul Stud principal Gerry Harvey was interviewed in 2007 during the EI crisis which as we all know was caused by lax quarantine procedures for thoroughbred shuttle stallions.

"If there was AI, this wouldn't be a problem in the breeding business and we wouldn't even have it because these stallions wouldn't have even come into the country," he said.

"I've got three horse studs, 300 mares going into stud, 120 racehorses in training, so I'm probably affected as much as anyone."

The main obstacle in getting AI accepted appeared to be trade practices legislation and the commercial need to limit the amount stallions used for servicing mares, Mr Harvey said.

"People have been trying to get AI into the thoroughbred horse industry for years," he said.

"It's used in every breed of horse except thoroughbreds."

"This is a case of the law being a damned nuisance, because if you had a breeding society that said you could only serve 100 or 150 or 200 mares then it would never become a problem."

"You use AI and you save all this stupid business about putting stallions on planes and carting them all around the world."

"I've got no doubt it's only a matter of time before AI becomes the preferred and only way to do it."

Harvey has hit the nail on the head regarding another of Arrowfield's claims, which is that books of 500 or so mares have devastated the genetic diversity of the standardbred in Australia.

It would be perfectly reasonable to limit books to a maximum number of mares by voluntary agreement if AI was being used. As it is, Coolmore have proudly claimed that Fastnet Rock covered 272 mares in the 2009 season. Presumably this was all by natural service as Coolmore would never use AI, but one wonders where's the difference?

As we discussed here, the other main argument against permitting AI in Australia is that it would prevent Australian bred horses from competing overseas. The solution is simple, which is to allow the 90% or so of locally bred horses to race in Australia regardless of how they are conceived.

For the small proportion of horses intended for the international market, let the breeders continue to use natural service methods. I see no reason why the interests of the elite 10% should ride roughshod over those of the other 90%.

And I'm certainly not going to contribute to the legal costs of those who want to maintain the status quo, when they are perfectly capable of funding them out of their own deep pockets which have already been filled by the little breeders.