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Senate Review of MLA

MLA August 18 has announced they are undertaking sweeping reforms.

The announcements have been made by the new managing director MLA Richard Norton some two and a half years ago Scott Hansen took over as MLA MD and he made wide sweeping statements the MLA was going to get back to basics.

Some may say the reforms are overdue and from my point of view the concerns are MLA is actually listening, maybe this is a slick way of having a quick cleaning job to negate a critical report by the Senate.

MLA made a 111 page submission to the Senate which included how inclusive and what a wonderful job they had done for the industry. What has changed?  They have been shown to be not as good as they would have levy payers believe.

Upon reading this admission and listening to their evidence at the Senate one could not help but be impressed by the slickness of their presentation.  However, the content was another thing.

When pressed on the live shipping debacle their answers were far from convincing when one knew the facts. The truth is MLA had spent millions on the torture Chambers showed on four Corners program. MSA when questioned of how much they had spent MLA said $98 million when it was pointed out that there was an independent review conducted in 2007 suggesting that they in fact had spent $210m by 2007 they did a quick U-turn and decided that money had been spent prior to MLA coming into being??

One of the other suggestions at the Senate was MLA had to have periodic reviews.

The last independent review of the MLA performance was in fact in 2010 and the so-called independent review found that MLA delivered value to stakeholders and delivered and maintained a high standard of corporate governance evaluation.

It was fascinating to read where 79 stakeholders were spoken to by the firm doing the consultancy.

People spoken to MLA directors and former directors (5)

MLA staff equally as independent (15)

Peak councils who in the main gave MLA a glowing tick (11). Industry what does MLA consider is the industry consultant spoke to (18) from industry.

DAFF our government organisation why consult people (9).

R&D partners if you’ve got a snout in the trough (12)

marketing partners again why would you be critical (6)

Others one could imagine where they would come from (3)

To me when one looks at the MLA staff and directors having 25% of the say surely this is not an independent review.

MLA continues to talk of the value of their marketing campaigns and how the price of retail beef has risen. One can only wonder how successful these campaigns have been for whom. Supermarkets, retailers and processors have never seen profits on beef like we see at present.

Why would producers throw hundreds of millions of dollars at marketing to find that Australia, with all the bells and whistles, NLIS, MSA and AHA costing the producer a fortune for what return?

In the US, producers are getting double money than their cousin in Australia are receiving for the beef whilst in the same country their consumers are paying 25% less for their retail beef. Record prices on the export markets for beef and record tonnages being shipped and again Australian farmers getting the lowest price in the developed world for their beef.

MLA publication states domestic utilisation is expected to ease by 10.6% in 2014. Where do the key performance indicators sit with all this? The fact is that beef despite all the efforts and the millions spent by producers is giving them no benefit. Surely the question must be asked why producers paying for biggest slice of MLA marketing when it doesn’t benefit producers. Perhaps MLA might like to have a review on how much benefit producers are getting from the marketing dollars.

I read whereas the quantum of the grass fed levy transaction is set according to robust industry consultation again I am puzzled as the MLA cannot identify all producers who pay a statutory levy.

According to the MLA the peak councils are there to provide direction to the MLA marketing and R&D programs. Fact: the MLA is obliged under the MRU to consult with the CCA; however the MLA is under no obligation to do what they are advised to do. Of course we know there are five peak councils running the MLA.  The processors and live exporters have a statutory levy extracted by DAFF, of these the FEEDLOTTERS, SHEEP PRODUCERS and CATTLE PRODUCERS are paid directly to the MLA.  On the other hand, AMPC processors, ALEC live shippers have their levies collected by DAFF and are paid directly into their accounts.  Then they decide how much they will pay MLA and of course they have control of all the funds.  A great example is AMPC refuse to pay anything towards oversees marketing and very little towards domestic marketing.

The MLA last year received funding from five peak councils who paid in around $103 million.  The cattle producers’ share of this was $54 million whilst the others came in at $49 million.

The fact is that whilst cattle producers do the vast majority of the paying other councils do the vast amount of the saying.

For their part CCA submission to the Senate enquiry was a little more or less a glowing endorsement of the MLA. It puzzles me how the peak body supposedly representing producers can come to this conclusion when even the board of the MLA are finding fault.

The solution is very simple.  Cattle producers must get hold of the cheque-book and collect all levies just the same as AMPC does. Then we could have an independent grass fed producers’ body that is well funded and could ensure that producers get a fair deal from a service provider such as the MLA.


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