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New Cattle Corporation

Most thinking producers realise that the present set up that we have in the red meat industry is untenable for grassfed producers. What we have seen is a Senate committee conducting hearings where they talked to all sorts of producers and industry players around the country.  After careful consideration of all the evidence they came up with seven recommendations.

Barnaby Joyce considered these recommendations and ruled out five and left two. What the independent senators highlighted was numerous problems in the way producers are represented.

This is in direct contrast to processors, feedlotters, supermarkets and others who are well represented by their well-resourced and effective peak organisations. In this day and age every peak organisation needs to be well funded to be effective. One example of the present set up is that the processors have a statutory levy taken out for every kilogram of meat that they process.  A tidy sum of approximately $22M which goes into AMPC as their service provider and they give about $10 million to the MLA with conditions attached.  AMPC has retained earnings of about $40 million. This is in direct contrast to producers who have no say over how MLA (grass fed producers Service Company)   uses grass fed producers’ levies. One could wonder why processors have their own service organisation when MLA is in theory the service organisation to sheep meat, processors, live shippers, lot feeders and beef producers.

It is interesting to read the Minister’s view that redirection of grassfed levies would fundamentally destabilise MLA to the detriment of other red meat industry components. This statement is questionable as producers are paying so much for so little in return.

In the case of grass fed beef producers they pay a statutory levy into the government levies collection unit of $60+ million which mostly goes directly into the MLA pockets as the producers’ service organisation. Producers’ peak Council is CCA which operates on a negative budget of $1.6 million which forces CCA to take the begging bowl to the MLA to keep them on life-support.

Processors not only have their own service organisation but their own peak Council and have support from some of the biggest processors in the country. Live shippers also have an arrangement where they pay virtually nothing into the MLA but get plenty of funding from the MLA.  In the case of supermarkets they pay nothing towards the upkeep of the MLA.

Cattle producers pay huge sums of money towards marketing of beef meat, and a lot of people including myself believe that producers are selling cattle and not meat. The fact is that beef may well be bringing in record prices on the domestic and overseas markets but producers may only be getting prices that are below the cost of production.

Producer groups have sat down over the last 12 months trying to stitch a deal together to hopefully give the grassfed cattle industry a long overdue democratically elected board.

Producer groups have spent a lot of time and effort so far and the next move appears to be an implementation committee. One of the biggest concerns is as time goes on people with self-interest will try to get away from the seven recommendations.  A simple yes or no on the seven recommendations would be a great start (In the form of referendum). However we would have had to identify all grassfed levy payers so they can be provided with a ballot paper to make a Democratic choice of what actually want.

On a positive note I am informed that that in the near future we will be able to identify all producers who pay a five dollar cattle levy.

Then we could look at getting a new board elected by cattle producers.  This board would be elected in regions across Australia: 15 regions and 15 elected representatives; one from each region. All people elected to a region would then have their name placed for a vote on an executive of seven people. Leaving 15 people on advisory committee and seven of those people would be on the executive.

This would mean that no existing group could be guaranteed any seats on the new cattle Corporation.  Therefore no group like ABA, Cattle Council or any other group would have any guarantees of getting a seat on the new board.

The whole exercise should ensure democracy and producers would have their destiny in their own hands and if someone doesn’t like the member for their region, they can simply get them voted out at the next election.

Democracy at its best, let’s hope.

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