Over the last 12 months producer groups, including CCA, ABA and AMPG, have combined to try and find a way forward for producers to have some sort of oversight of grass fed cattle levies.
Previously at the Senate enquiry, the senators made much of the fact that grass fed producers did most of the paying and did little of the saying. At a recent MLA AGM we had prominent producers coming out saying the MLA is much more transparent and open than they have been the past. To my way of thinking there’s been a lot of window dressing and a lot of puffing and blowing, however I can’t see that producers are getting any better value for money.
The fact is that we must be very careful that if we get a restructured CCA up and running we may accomplish nothing or very little. The simple fact is no matter how well CCA manages to fund itself we may find that in the efforts to get finance the whole structure may be compromised and grass fed producers may even be worse off than the with present structure that we find so unsatisfactory.
MLA is bound by a memorandum of understanding (MOU).
Signatories to the MOU include:
- The Australian government – contribute matching R&D funds.
- Cattle Council of Australia (CCA) – representing grass fed cattle producers who pay $67 million into MLA (black hole without any say)
- Sheepmeat Council of Australia (SCA) – $36 million levy.
- Australian Lot Feeders Association (ALFA) – $10.5 million levy.
- Australian Meat Industry Council (AMIC) – NIL.
- Australian Live Exporters Council (ALEC) – NIL.
- Meat Livestock Australia Ltd (MLA) – so-called service organisation.
- Australian Meat Processor Corporation (AMPC) – makes contribution of $12 million towards MLA with full control of contributions.
- Australian Livestock Export Corporation Ltd (Live Corp) – contribution to MLA $2.4 million with full control over contributions.
To be recognised as a peak Council an organisation must clearly demonstrate that it represents coverage of an industry sector on a national basis, and satisfies the Minister who is reviewing objectives that are in the interests of the sector as a whole and membership is open to the sector as a whole.
CCA, until recent times, membership has not been available to non SFO members, surely was not in the spirit of the MOU (legal)?
In recent years grass fed producers have sought greater ownership of their industry. CCA say they heard this and that opened up their membership to independent members. The fact is any grass fed producer can join up to CCA providing they pay a hundred dollar membership or they are a member of a state farming organisation e.g. AGFORCE which is free. It seems to me that if someone joins and pays their membership and they are not a member of their state farming organisation they may face an uphill battle if they put up for the CCA board. The simple fact is that someone put up against an SFO member, the SFO person would potentially have 99.9% of the voting pool. Democratic? Legal? I wonder?
The other big concern is the relationship between MLA as a service provider and CCA as a peak Council. Over recent years CCA have entered into service agreements with MLA. It has been pointed out that although MLA is obliged to consult with CCA, they have no obligation to take any notice of CCA’s concerns or directions. CCA itself raised concerns that the level of consultation with MLA was just that, only a consultation. CCA told the Senate that MLA should not only be required to consult but also receive approval from organisation representatives of levy payers before they can act. Many people giving evidence at the Senate enquiry raised concerns about CCA’s independence in light of its reliance on MLA funding. CCA rely on payments from MLA in order to operate. How can CCA possibly provide effective oversight? The fact is there is an obvious conflict of interest that greatly exacerbates the already uneven playing field that CCA occupies. CCA stated that the use of service agreements has allowed it to be more responsive to the demand of the industry??? In a previous submission CCA argued that by improving its financial capacity through service agreements that this improved its ability to scrutinise MLA. However, later CCA said that they recognise service agreements are a stopgap measure and not the most appropriate way of funding CCA. Cattle Council also acknowledged that service agreements have been inhibitive as CCA cannot work with complete autonomy and flexibility.
I for one have great concerns that the Minister may simply dismiss the thrust of the seven recommendations made by the Senate Inquiry. The Minister even went on to say that if producers got their funds it would destabilise the MLA. Who could disagree? However, who gets the most benefit of the MLA? I for one would argue that the people paying the least are getting the most benefit and the most say. Supermarkets don’t pay towards MLA and processors refuse to pay towards marketing, this leaves the grass fed producers to pick up the tab, whilst others prosper from their stat. levy.