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Are Producers Being Robbed?

Grass fed restructure meeting was told that Barnaby has a plan??

At present the red meat industry groups have two very different positions on the issue.

What is pleasing to see, is producer organisations representing different groups from grass fed cattle industry getting together and focusing on sorting their differences out behind closed doors and then coming forward with a united front.

The groups have taken giant steps and shows what can happen with a bit of good will. Cattle Council of Australia, the Australian Beef Association and the Australian Meat Producers group all support the Senate committee recommendation that a single producer body be formed to manage the entire grass fed levy in future.

Grass fed producers have argued for some time that the grass fed levy producers should be able to sort out how their levies are spent

Under this proposal MLA would remain as a service provider for research and development and marketing. One could prosecute a strong case that this is exactly what MLA was set up to be a service provider to ALL the red meat industry. As time has gone on it has been found that the MLA in fact is all-powerful as far as grass fed producers are concerned. Even worse the MLA spends producers’ funds as they see fit.

Non-grass fed along the red meat supply chain such as the feedlots, sheep meats, goat meat, live shippers and processors are generally opposed to that plan largely because of the view that it will weaken existing R&D and marketing structures within the MLA which they also rely on.

In my opinion processors, feedlots and live shippers have every right to feel concerned as they have feasted for far too long on the producer five dollar transaction levies.

Contributions to the MLA by each sector: processors $10.8 million, lot feeders$9.8 mil, sheep $34.2 million, live shippers ZERO, goats $0.8 million and the good old grass fed cattle producers will pay $62.1 million this year. (MLA REPORT)

Put simply, grass fed cattle producers pay more than the other peak councils combined and have no control over their levies.

Statutory processor levies are deducted by the government in the same way as producers have their levies deducted. In the case of producers the funds are passed directly from the Federal government into the MLA with very little checks and balances.

In contrast to grass fed producers, processors have all the money collected by statutory levy passed back into their own organisation, AMPC, about $19 million then they pay the MLA $10.8 million as their contribution towards MLA upkeep. It should be noted that processors refuse to pay for MLA marketing overseas and very little on the domestic market, producers have no such choice. Processor R&D again is structured so that processors decide on their R&D and what they want to spend money on. AMPC has an excess of $30 million in retained earnings, CCA runs a negative budget and relies on MLA for handout.

Live shippers also had levies deducted and all the money is paid into their own organisation and it seems that they contributed nothing towards MLA and in fact get money from the MLA. It seems they do plenty of the saying and little of the paying. Under the present system this seems very common.

The fact is why should other sectors of the industry have anything to do with grass fed levy producer funds and why should they feel concerned if grass fed producers get control of their funds.

Hundreds of millions of dollars have gone to marketing both in Australia and overseas which some may argue has opened new markets and led record prices both domestically and overseas. The problem is that other sectors of the industry which had not contributed towards marketing reap the benefits of producer marketing funds.

Countless millions have been spent on processing R&D with the idea that cheaper processing costs will be passed back to the producer. This has never happened and is unlikely to happen under the present arrangements.

The fact is that till producers can get control of their funds other sectors of the industry will continue to use producer funds for R&D and marketing which had no benefit to the grass fed producers who do the paying and little of the saying.


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