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ACCC criticises cattle industry’s ‘poor progress’ toward reform

Beef Central, May 4, 2018

THE cattle and beef industry has not acted on most of the recommendations made by the ACCC in 2017 to improve the transparency and efficiency of Australian cattle markets, the competition regulator said in a review released today.

The ACCC’s cattle and beef market study, released in March 2017, made 15 recommendations to address concerns about transparency in cattle and beef markets.

The recommended reforms included expanded reporting of prices for non-auction sales, greater transparency of processors price offers, simplification of pricing grids, and measures to increase transparency in saleyard auctions.

“The ACCC’s recommendations proposed meaningful improvements to transparency in cattle and beef markets, but little progress has been made toward most of these,” ACCC Commissioner Mick Keogh said.

“There have been some improvements to market reporting and producer education activities, but the level of action is disappointing overall.”

The ACCC found that Meat and Livestock Australia has improved its market reporting systems, but further improvements have been restricted by the unwillingness of processors and other major cattle buyers to provide market information.

“Around 90 per cent of processor cattle transactions are direct purchases from farmers but the prices of these transactions are not reported. We see this as a serious risk to the efficiency of the industry,” Mr Keogh said.

“Inaction suggests that either industry participants do not understand the value of transparency, or it does not suit the interests of those who are in a position to make improvements.”

In its 2017 report, the ACCC had tasked the Red Meat Advisory Council (RMAC) with overseeing the implementation of the reforms. However, RMAC has been reluctant to carry out this role.

“Given the RMAC’s reluctance to engage with the recommendations during the past twelve months, we no longer believe it should have this leadership role,” Mr Keogh said.

“We will instead engage with Commonwealth and state governments through the Agriculture Ministers’ Forum to push for implementation of the recommendations.”

Source: ACCC. The ACCC’s cattle and beef market study is available at www.accc.gov.au/about-us/market-studies/cattle-and-beef-market-study
 

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Comments

  1. Ian McKenzie, May 7, 2018

    It defies belief that the CCA have for so long professed to be representative of the Beef industry and have sat on their hands and aspired to be consultative and yet have been ego driven and a closed shop. Please Mick Keogh force these Producer Funded organisations to be transparent to their stockholders and maybe require MLA to be accountable for funding so called Industry Bodies.

  2. John Gunthorpe, May 5, 2018

    We join with Peter, Loretta and David in voicing our concern about the snail’s pace with which this matter is being dealt. All concerned should be ashamed for their lack of action on such an important issue. A grass-fed cattle producer owned organisation with democratically elected directors to advocate on behalf of the their industry is a fundamental right referenced by many enquiries and government bodies. They must have input through a second organisation to direct how their levies are spent on research and marketing. The new agriculture minister in our federal house has democracy as a core belief. As members gather in Rockhampton this week to celebrate all that is good in our supply chain, they should take a moment to discuss the damage caused by CCA (BJD stress and financial losses to innocent members of our industry; J-BAS, biosecurity plans and now animal welfare regulations) and how this continuing and festering sore can be healed. Unfortunately Loretta’s and David’s Implementation Committee has decided not to attend Beef Week. For 4 months (since CCA turned their back on their undertakings to the then minister who formed the Implementation Committee) we have waited for the IC to encourage all grass-fed cattle producers to support their new organisation. We agree with Mick Keogh that RMAC should be removed from any leadership role with regard to industry restructure. ACIC would go a step further and support the senate recommendation for RMAC to be disbanded. They are a cost for our industry without any benefit to our on farm profitability. Unfortunately it is egos rubbing egos.

  3. David Byard, May 4, 2018

    ACCC criticises cattle industry, poor progress towards reform. The simple fact is self interest in the beef industry is alive and well and the ACCC are not the only ones who have advocated for major reform. In 2014 a senate committee set up by the then Minister Joyce made seven recommendations which if they had been adopted would have seen a vastly different landscape, which would have seen grass fed producers having some control over their levies. It should be noted that one of the recommendations made by the senate was the dismantling of RMAC which is dominated by processors and retailers. The biggest problem for grass fed producers is that they have a statutory levy deducted and alike other sections of the industry have no say of how this money will be spent. This of course plays into the hands of other industry bodies who in contrast to CCA, are well financed and functional. CCA is reliant on MLA service agreements for the biggest part of their funding. This of course is a ridiculous situation whereas under the MOU, they are the body responsible to look after grass fed producers. The simple fact is they cannot carry out their main function as their funding source would dry up. In the words of former CCA chairman no change is not an option. Surely the time has come when support is given to a board that is elected by producers across the country that has some control over the hundreds of millions of dollars that is contributed by producers for the benefit of others in the industry.

  4. Loretta Carroll, May 4, 2018

    I wish to thank the ACCC for its Update Report and its recognition of the failures of current industry organisations to deliver reform. The Implementation Committee established in 2015 are working toward establishing a unified and democratic organisation to represent all grass-fed cattle producers across Australia and as the ACCC report states, we remain committed to this. Unfortunately, in January this year Cattle Council resigned from the Committee because their founding members (State Farm Organisations) did not want to lose a seat at the table. One of our difficulties here is the Implementation Committee had applied for funding of $500,000 through the Leadership in Agricultural Industries Fund to progress the new organisation – the success of this grant application was announced in October last year – this grant was auspiced through Cattle Council and we are still waiting on a response from the Department of Agriculture in regard to this funding. What we do know is that other grant recipients have received their grants. Surely the Minister will not revoke the grant on account of Cattle Council’s ‘limited appetite for real reform’. In the mean time the Implementation Committee is progressing with no funding, with members volunteering their time and skills. It is important to not that reform has been supported by the ACCC and recent Senate inquiries with the latest inquiry into the consolidation of meat processor market power, stating in Recommendation 4 that the Committee recommends the Australian Government provide immediate support, including appropriate financial assistance, to the grass-fed cattle sector in its efforts to replace Cattle Council of Australia with a transparent and accountable producer-owned body as the sector’s Peak Industry Council.

  5. Peter James McHugh, May 4, 2018

    This should not be a surprise to the ACCC ,if they had followed the two senate inquiries and recommendations provided by the senate committee chaired by Senator Glenn Sterle in regards RMAC.
    I’ve asked before if Beef Central would provide Chapter 5 report to their readers , ACCC should note the following :

    5.13 : 2014 report ” The committee recommended that the Minister for Agi & Water resources disband RMAC”

    5.14 the committee is not satisfied that RMAC has demonstrated sufficient improvement in terms of efficacy or accountability over the past 2 years ( 2014 report ).
    long standing concerns the very structure of RMAC has inhibits its role to effectively advocate for and represent on agreed industry position.

    and it goes on there is 20 pages of these problems spelt out in Sterle’s committee report going back to 2014 , so no one should be surprised.
    can on get Mick keogh to read this chapter 5 please.

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