Live Export

Live export merger key test for future levy use

James Nason, October 30, 2019

THE Australian Livestock Exporter’s Council (ALEC) has voted in favour of pursuing a merger with LiveCorp, setting the scene for a pivotal test of how industry levy funds can be used by industry organisations.

ALEC CEO Mark Harvey-Sutton

At their annual general meeting in Townsville on Tuesday, livestock exporters passed a resolution supporting an amalgamation of ALEC, the livestock export industry’s peak council and policy setting and advocacy body, and LiveCorp, the industry’s levy-funded research and marketing service provider.

The wording of the one-page resolution passed at the ALEC AGM stated that ALEC and LiveCorp should merge with the goal of improving industry capability through a streamlined structure.

Such a merger would better reflect the unique degree of integration that already exists between the peak industry council and the research and marketing organisation in the small and nimble industry, the resolution stated.

The proposed merger if it proceeds will provide a test of the Federal Government’s position on whether compulsorily acquired levy funds can be received and managed by a single organisation that conducts industry research and marketing activities, along with industry policy development and advocacy activities, under the same roof.

In most agricultural sectors, with the exception of Australian Pork Limited, the Government has previously required that the functions of levy funded organisations and membership-funded industry representative groups be kept distinctly separate.

Questions of whether such ‘Chinese Walls’ are necessary have re-emerged in recent years as red meat industry sectors have reconsidered structural issues.

An appetite for amalgamating industry bodies to reduce costs and duplication, improve efficiency and better resource industry-policy setting activities has been clearly evident in industry discussion in recent years.

The Red Meat MoU White Paper review recommended the industry form a new super red meat industry body to receive and manage all levy funds while also undertaking some policy setting responsibilities for industry.

The Federal Government has indicated it too is considering such questions.

In its recently released Research Development Corporation review discussion paper it poses questions such as should RDCs be able to increase their role in policy research and development and participate in policy debate alongside industry representative bodies. And, if so, can activity be clearly distinguished from partisan and political activity, which, the Federal Government points out, ‘must remain a role for industry representative bodies’.

As a large funder of matching research dollars, and as the conduit through which compulsory levies are collected and dispersed (via the Department of Agriculture Levies Collection Unit), the support for  the Federal Government would be be required for a merger of ALEC and LiveCorp as ALEC members voted in favour of supporting on Tuesday to progress (and which LiveCorp is yet to vote upon).

The resolution passed by ALEC on Tuesday indicates live exporters believe the benefits of a single organisation can be achieved, while ensuring any activities that may be deemed agripolitical be funded from voluntary membership funds, not compulsorily acquired levies.

ALEC CEO Mark Harvey-Sutton told Beef Central after Tuesday’s AGM there is an appetite in ALEC’s view to reconsider the functions of RDCs and traditional frameworks.

“We’re pretty unique (in the livestock export sector) in the sense that our RDC and peak body work very closely together, we have got a small membership, a small industry when you look at the number of people involved, and there is a desire for the members to move in that direction,” he said.

“There are obviously challenges around that in existing regulatory frameworks and Government policy.

“But we believe that through this process (te RDC review being conducted by Agriculture Minister Bridget McKenzie) we can look at the boundaries around what agripolitical activity is, we think that is too narrowly defined.

“We thinkhere is a very narrow interpretation of agripolitical activity and levy expenditure taken at the moment by the Australian Government, and we think there should be more flexibility in the system.”

He said the white paper process and RDC review meant the timing was right to consider these issues.

“Certainly if you look at the questions that were asked in the discussion paper, which contemplates a role for RDCs and advocacy, that is a pretty clear signal.

“The white paper process too makes a large assumption around the use of levies for policy development, so I think there are signals of an appetite to rethink the way we do things.”

The wording of the resolution passed by livestock exporters on Tuesday also noted that in contemplating an appropriate structure for the industry,  there should be acknowledgment that levy funds that feed into such a system, while collected by government, are actually industry funds and that industry has a right to determine the best process for expenditure of those funds as well as a right to determine the framework that enables that expenditure.

ALEC will now work LiveCorp to take a joint position on the question of a proposed merger to the Australian government. At the time of writing LiveCorp had not had an opportunity to consider ALEC’s position.

IN OTHER NEWS from Tuesday’s ALEC AGM, the successful candidates seeking election to the Board were new board candidates David Warriner and Harold Sealy and John Edwards, who sought re-election for his position.

The remaining members of the Board are Simon Crean (chair), Mark Harvey-Sutton (CEO), Will McEwin, John Cunnington, Anthony Fellows and David Galvin.

 

 

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