In 1998 grass fed beef producers payed $27 million in statutory levy by 2014 they were paying $61.2 million, at the same time lot feeders will pay $5 million and by 2014 they were paying $9.8 million. It is important to note processors own a big slice of feedlots. In the case of processors they paid a statutory levy of $18.5 million and spent $13.3M on MLA projects in 1998. By 2014 they collected $22 million in statutory levy and their contribution towards the MLA had dropped to $10 million. Sheep producers started out paying $12 million and then by 2014 their contribution had gone up to $34.2 million. Live shippers have a statutory levy taken out by government and this money is handed back to their service organisation which spends the money as they wish. They have joint funding arrangements with MLA and don’t appear to pay towards the upkeep of MLA at all.
If grass fed producers could form their own service organisation they may have better control of where funding is spent. Even worse if this was to occur we may even find that producers may look towards funding that actually benefits producers. This would be a complete contrast to the present thinking whereas a lot of people believe that retail and export prices somehow come back to producers and MLA have complete control of grass fed cattle producers levies.
Over the years we’ve watched as a combination of drought and interruptions in live shipping has almost bought cattle producers to their knees. With live shipping getting up and going and cattle getting short we have seen record prices for cattle. Some people talk of supply and demand however whilst processors were getting record prices overseas very little of this money was coming back to producers and it seemed processors really screwed producers while they could.
One great example was when processors were paying $3.40/kg one publication suggested that processors were actually only getting $3.45 a kilogram meaning a mere 5c/kg margin. Now the prices are creeping towards six dollars a kilogram and the dollar remaining very similar and prices on overseas markets doing the same, have I missed something? Perhaps greed! Is it possible that processors are losing $2.50/kg? Very unlikely!
The answer certainly is not Barnaby Joyce. After 20 months of procrastinating he has ensured the grass fed producers are in a worse predicament politically than they were before the Senate bought down the seven recommendations that could have changed the structure and ensured producers get a fair deal out of their levy dollars.
The fact is that some sectors of the industry, like processors and their mates, like lot feeders and supermarkets are extremely powerful and are not frightened to use their power. The processors service organisation has $40 million plus in retained earnings and their industrial body is rich and powerful. All this while the producers’ peak body is broke and ineffectual and operates on a negative budget.
Let’s hope that out of the ashes we may find that producers find a way to form a new peak Council. What the Minister has done has made it very hard for any of the statutory levy that flows unabated into the MLA to be used to fund a new democratically elected producer body.
One of the interesting things to happen is that producer organisations and the present Cattle Council have actually sat down to try and work out a solution to the problems facing in getting a new body that could be voted on by producers throughout Australia.
Until we can form a well-funded peak body producers will continue to be on the wrong end of political decisions. A great example is processors contributing $13.3 million in 1998 and 2014 they contributed only $10.8 million and even worse they have the where for all to tell MLA where to spend their funds.
What is the answer? Very simple, firstly we could identify all producers who pay a levy, similar to AWI who have identified levy payers for many years. Once we have the full register of grass fed levy payers then could have a referendum so as all levy payers could have a Democratic vote and decide things like the amount of levies producers want to pay and whether they want to contribute towards the upkeep of a peak Council out of the levies. After all this we could also have a vote for a Democratic producer body to represent producers and all producers could be presented with their voting rights.
What we have at present is taxation without representation and even worse we can’t identify who pays what. Hopefully major change is just around the corner, we can only hope.