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Okay, so who’s the ‘wolf’?

Do you grassfed producers realize how suddenly very attractive you all are?

It’s been the same since time immemorial  –  if you have a lot of money you will always have hangers-on, or someone trying to take it from you, or someone who thinks that if you go into partnership with them, or they marry you………. you will be even better off.

Or that is what they want you to think.  But you know you are just being used!

Grassfed cattle producers  (notice how we keep saying ‘grassfed cattle producers’ as if we are trying to make a point)   have A LOT OF MONEY.  That makes you very attractive!

So……..You’re surprised!!   You have money???

Yes, in collected levies every year.  In fact, about $50million plus every year.  And even more in a drought year when cattlemen are forced to sell.

Now there are some problems with this.  But first let’s go back and explain the process of being a grassfed levy payer.

A grassfed animal is sold, and a $5 cattle transaction levy is taken out of the sale proceeds before the producer gets his money.  This animal’s age and where it goes after this first sale will determine if it attracts any further levies. Many cattle are sold a number of times before arriving at the abattoir door.

But basically, when that animal arrives at the abattoir door in Australia, it is either grassfed or grainfed.    At the end of the financial year, if you are a voting member of MLA (and most of you are not, and do not bother) you have to advise the voting registrar if you sold one or the other.  You then get votes based on the numbers of cattle you sold.

(There are of course,  live export cattle too.  For the purposes of this exercise, we are going to talk about grassfed and grainfed only). 

As not everyone is a registered member of MLA to fill out those forms, how do they know how many grass/ grain cattle go thru every year?

The reality is that grass/grain is traceable by the NVD, and every $5 that is collected is supposedly classified as such by the saleyards, agents, or abattoirs and passed on, with each $5,  to the DAFF (Dept of Agriculture, Fisheries and Forestry) Levies Collection Unit.

The DAFF then ‘processes’ the money and the information, keeping a processing fee for themselves.  The proceeds of the collection of grassfed and grainfed cattle levies is then forwarded by DAFF  to MLA.

This is where the FIRST PROBLEM arises. The lotfeeders have their own levies given to their Peak Body (ALFA) to decide what they will do with their funds to benefit their industry.

(Also the Processors (and butchers) are given the proceeds of the slaughter levy on their meat sales(.06%) – different to the cattle transaction levy – for their own Peak Body, the AMPG  [Aust Meat Processing Group] to decide what they will do with their own funds to benefit their industry).

The grassfed cattle producers (grassies) however,  have their money (currently about $50m+ per year) sent directly to MLA……..bypassing our Peak Body, the ineffectual and financially challenged Cattle Council of Australia, or CCA.

That was how John Anderson, advised by the State Farm Organisations (SFOs)  like Agforce, NSWFF, WAFF etc etc , set the whole system up to ensure ‘good representation’ for the grassfed industry in 1997.

In 1997 the SFOs wanted to have control of CCA, so gave away the levy fund and therefore the right to effectively and correctly manage the grassfed industry.  (In 2012/13  when we tried to carry out the ‘CCA requested’ restructure to make it work for Grassies, it became obvious that CCA didn’t want the levy money plus a democratic board, they just wanted a refinancing package from MLA,  so they could STILL retain that ‘power’ and ownership!   Go figure!)

Grassfed cattle producers, the grassies, as a result,  get NO SAY over their own monies.  CCA promises no changes in the future either!

Which leads to the second problem.

This is just peachy for every other Peak Council in MLA, who sees the grassfed levy money as MLA’s own money, (as does MLA) so they all think MLA can  spread it around amongst all the industries.

Because finances, facts, and figures are so hard to get out of MLA, and because MLA are being influenced by the Processors and others, the grassfed producer is funding his own demise.

What??  How can the processors influence MLA?

This is where the next problem shows up.  And this is where your votes, or lack of them, affects the way things are.

There is a ’30 Day Rule’ which means that once purchased cattle have been in a feedlot for 30 days, they are then subject to paying the cattle transaction levy again, even though a levy was already paid when they went into the feedlot.  So whomever sends cattle from a feedlot must pay this levy.

The processors all own some of the largest feedlots in the land.  The processors know and understand the 30 Day Rule.  The processors buy up cattle and place them in their own feedlots for 30+ days.  The processors, by sleight of hand, have now managed to pick up massive grainfed votes through their cattle transaction levies.

These votes are added to the ‘slaughter levy’ votes they have also received!

So?  you ask.

Along comes voting day at the AGM for MLA.

Using the MLA register of members, which also shows who actually bothered to collect their votes that year…and how many votes they got, the ABA has been able to extrapolate some facts.

Once we have unravelled the register, because MLA always sells it to us for a healthy sum AND scrambles the information (we have to get an expert in to unscramble it!!), this is an example of the MLA voting register from a couple of years ago.

We have found out that out of the 46 000 MLA registered members able to vote,  about 9000 actually claim their votes.

Of these,  only 3600 – 4000 actually use their vote.   Of all of those who do use their vote,  the top 40 control over 50% of the votes.

Of those top 40, 4 of the 5 largest voters are actually processors, with huge voters gained from their grainfed operations plus their slaughter levy.  The fifth largest voter is soon to become a processor and is a feedlotter.

Of the top 40 who control over 50% of the vote, many are lotfeeders.  So this is effectively what we mean by saying that MLA is captured by the processors, using their combined votes to outvote everyone else.

If you read the Lot Feeders submission to the Senate Inquiry into levy collection, you will note that they agree with everything that the grassies have been saying about the industry and the need for change, but they are also putting forward the plan that grassfed and grainfed producers are joined together in one organisation.

So the point of this letter to you is to explain that the one thing the Grassfed Cattle producers CANNOT do is get ‘courted’ by the lotfeeders to allow them to join with us in a “United Board”………because by default you will allow the processors – wolfs in sheep’s clothing – in on your grassfed producers’ board and once again, and give away  control, once again, over your levies.

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