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Cattle Council Reform!!!

I was fascinated to read where the Cattle Council of Australia has called on major political parties to commit funds for a planned restructure.

The new group would combine policy setting, policy delivery and advocacy. In my mind, and in the mind of many others, this is an absolute necessity for grass fed cattle producers.

Under the MOU, which is the basis that MLA operates under, grass fed cattle producers provide over 50% of all levies collected. The simple fact is that grass fed producers do most of the paying and very little of the saying.

MLA is a service provider for grass fed cattle producers, sheep producers and lot feeders. The curious part is that processors and live shippers not only have well-resourced advocacy bodies but also have their own service providers.

Saying all this processors, retailers, and live shippers have enormous influence over MLA. A great example is the great number of votes that reside with the processors along with grazing companies, feedlots and processing interests. I feel certain that when MLA was designed nobody foresaw the huge influence that processors would yield.

One of the biggest problems we have is a voting system that is based on honesty and in the past has been regularly abused. If we had one vote to one man the processing vote would not be so crucial. But some people say that this would enable small farmers to take over the industry. However when one looks at the voting system for politicians the poorest in the land gets the same vote as the richest.

Originally there was hope that a new body could be funded from the costly cattle levies. This was part of the 7 recommendations brought out by an independent bipartisan senate to recommend a reformed Cattle Corporation.

The Minister rejected the idea saying that it had the ability to destabilise the broader red meat industry structure including MLA and would make a new producer representative organisation beholden to the Federal government.

What we have now is a CCA that is beholden to the MLA for 50% of its funding. Surely this makes CCA beholden to the MLA who it is supposed to oversee.

If I was a processor, supermarket, retailer or whatever I would be dead set against a new cattle Corporation getting their own funds and becoming a powerful force.  As a new well-funded, well-resourced producer body would start to really question and push for some other quaint things like independent graders, a fair share of offal return, etc. because as it stands now the processors are judge, jury and executioner with a great deal of say over regulations.

Lobbying: some of the biggest multinationals in the country have well-trained and well-resourced lobbyist that dominate the numerous committees that make the rules over numerous issues like company graders and Aus Meats. Some of the issues and rules made up by these committees are worth $zillions to processors at a great cost to producers.

In 2006 levy payers voted for an increase from $3.50 to $5 to help MLA marketing efforts. The Minister at the time, as part of the condition of granting the increase, made the condition that by 2009 the levy increase would have to be reviewed. The committee was comprised of only 14 people from levy paying enterprises across Australia. Of course the processors and MLA were very much in the mix giving voting power mostly to the multinational processors.

Their findings were very consistent along with independent analysis by a large firm. They say that the $1.50 increase is worth five times in returns to the producer. The MLA is very good at selecting people that will be sympathetic to their cause.

It has been said that the top 200 producers can out vote all other levy payers. This seems quite ridiculous when we may have over 100,000 producers paying a $5 levy.

One of the interesting things, in theory, is that levy payers have the capacity to rise or decrease levies as they feel. However with the way the voting system is presently structured it is almost impossible to move against the interests of processors, supermarkets and retailers.

The CCA say that developing a long-term sustainable funding model for a new Cattle Corporation could have enormous influence over advocacy and service delivery.  This is exactly what is required and what we are asking for.

Brisbane solicitor, Dan Creevey, summed up the situation when he told the ACCC that producers did not have fair and reasonable bargaining power, especially given that practices are not universal amongst processors and allows manipulation of the system to the processors’ benefit.

MLA through to RMAC and Aus Meat all say that they are listening to producers. From my point of view I don’t believe it and I congratulate the Cattle Council of Australia for coming out publicly in pushing for an independent and democratic producer organisation.

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