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What Value is the Current System?

The red meat industry has just undergone a very rigorous independent review conducted by a Senate committee. The findings leave no doubt that the system we have in place is flawed and needs radical surgery.

 This will be no surprise to not only producers but anybody who has had a good look at how the present system is not working for producers.

 Whilst producers fund expensive marketing programmes, processors, as part of the collective, have refused to contribute towards marketing.  Clearly producers have not benefited by the marketing campaigns conducted by the MLA.

 What we have witnessed over recent years is producers in drought and live shipping being interrupted which pushed price of cattle in a lot of cases below the cost of production and caused huge problems for the producers who pay a generous marketing levy. All this while processors get record prices for the beef taken from cattle and producers have been discounted for their product.

 Clearly this is an absurd situation and industry needs to have a real overhaul so that people doing the paying do the saying.

 As usual producers see different solutions for the industry. CCA which regards itself as a Peak Council feel with a bit of tinkering and getting part of the five dollar levy, will allow them to actually make sure that producers get some benefits.

 This sort or quaint thinking is rather interesting, however the fact is CCA would be still run by the same committee which in reality is a subcommittee of state farming organisations, and if CCA succeeded they would still have no control over MLA as a service provider and with membership of state farming organisations dropping, they will continue to represent less and less producers who pay a statutory five dollar levy.

 One of the biggest problems that everybody seemed to agree on, is that all producers who pay a five dollar levy should be identified and given a Democratic vote along the lines of AWI.

 If this actually came to pass, then all producers who pay a five dollar levy could actually vote for a new Peak Council which could easily be a revamped Cattle Council. This would mean for the first time in history of MLA, producers could be asked to vote on their own destiny and processors and others would not have a huge voting bloc or indeed any votes on an industry body.

 It is interesting to watch CCA say with 15,000 people, they represent 50% of the beef herd. I find this rather interesting as the MLA talk of having 48,000 producers on their books and admit they can’t identify all producers.

 Perhaps what we need is a Peak Council like CCA as an independent elected board that could receive all levies via the Levies Collection Unit and then ensure that producers can control a service provider like MLA. These people should be answerable to levy payers and implement programs instigated by producers.

 Processors have a statutory levy collected by the federal government, in total $18 million, of which the AMPC, the processors organisation, then passes $9 million of this sum to the MLA with conditions attached. This is in direct contrast to the producer levies, which after money deducted for collection and Animal Health Australia and others is $54 million in total. Surely producers could replicate the processor deal and collect all statutory levies then pay MLA as a service provider with conditions attached.

 Under the present system processors refuse to contribute towards marketing and take all the benefits with both hands. It is interesting to watch five red meat industry sectors pay towards the upkeep of the MLA, for their part producers pay in excess of $54 million over 50% whilst the processors pay less than 10% and $9.5 million. Added to the fact that processors tell MLA what they will fund and ensure that MLA does their bidding. The problem for me is that MLA has to consult with CCA but not to take any notice, added to the fact that every time we have a vote the vote is skewed by massive processor votes.

 Perhaps the way forward is to adopt the processors way of doing things and a producer group could make sure that all levies are spent for producers’ interests.

 


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