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Australian Beef Association: Response shows minister not listening

Australian Beef Association, 16/07/2015

The Australian Beef Association has provided the following statement in response to the Federal Government’s response to the Senate grassfed cattle industry report yesterday:

Minister for Agriculture Barnaby Joyce has finally responded to the Senate Reference Committee’s report into ‘industry structures and systems governing levies on grass fed cattle’.

When Minister Joyce agreed to ask the Senate to enquire into the many industry concerns, he made it very clear that he expected everybody to abide by the umpire’s decision.

At the meeting in Townsville in October 2013, he actually said “Yes, I will call for a Senate Inquiry, but you have to accept that you will not get everything you want”. ABA replied, in front of the other attendees,  “We will take that risk Minister if, as you promised, you will implement every recommendation that is made”. He agreed.

It seems that the Minister may not be listening correctly.

After six Australia-wide hearings with interested parties, the independent Senate Committee made seven recommendations – all of which showed that the Senate had listened well to the very real concerns of the grass fed cattle industry.

In reply to Senate Recommendation 1….’the government notes that the intent of this recommendation is to address very clear problems with the lack of effectiveness of grass fed producers say over their levies, due in part to the absence of a truly representative grass fed cattle body. The government has facilitated industry discussions over a number of months cumulating in industry roundtable discussions in December 2014.

The reality is that the December 2014 meeting was attended by 22 persons, only 6 of which actually paid the grass fed levy. All the others were members of the greater red meat industry who influenced or benefitted from those grass fed levies, and who spoke strongly for the grass fed cattle levies to be left in MLA, and not given to the producers themselves to manage.

The Minister’s office was shocked to hear from the producers at that meeting that it was considered a dreadful, biased dialogue, and we were angered by it. The Minister’s office is so disconnected from the producer and so influenced by those benefiting from the levy that this is the result producers have to try to run their industry under.

Following that disaster, industry players ABA, MPG, CCP and other individuals plus the CCA all met in Brisbane and nutted out a unified position on the structure for the New Grass Fed Levy Organisation. That new structure, supported by all players, was presented to the Minister on February 17th.

We note that the Minister has ignored this new unified structure.

Barnaby Joyce’s reply yesterday continues…’Finally the creation of a viable grass fed representative organisation will assist in ensuring the views of levy payers are reflected in the way levy funds are spent. The government’s preference is that industry representative bodies are funded from non-government sources”

Minister Joyce would be best to check all the facts on industry representation and funding.

The live exporters and the processors pay a statutory levy like the producer. However, they have their own service organisations which are funded from their own levies!!

In the case of the processors, last year they paid $22 million in statutory levies, all of which is handed to their own representative board of AMPC. The processors then passed $10 million to the MLA with strict conditions attached as to how MLA may use their money. It is well known that the processors have use of producer levies to fund all research and development of their meat processing sector.

The live exporters also pay a statutory levy, and it is also passed directly into their own organisation (ALEC).

Published MLA finances suggest that the live exporters’ peak council ALEC made no financial contribution towards the upkeep of the MLA, but receive great support from the resources of the MLA.

Over 50pc of MLA’s funding comes from the pockets of the grass fed cattle producer alone.

Last year grass fed cattle producers paid $62 million to MLA, and a further $20m to Animal Health Australia (again the biggest funders) and to the NRS.

In contrast to other representative Boards, cattle producers receive not one cent of their own monies into their Board and have no say in how their levies will be spent. The grass fed Peak Council, the Cattle Council of Australia, is funded by (less than enough) monies given to them by MLA on a contractual basis, and CCA has been running at a loss for years….despite being the biggest levy earner for the combined industries.

The highest contributor gets nothing for its money – no operating costs, no effective Peak Council, no control over spending, no say at all.

The government also says ‘…there is range of options open to a new body representing producers to ensure its ongoing financial viability’.

It seems that the grass fed producer is now required to once again put his hand in his pocket as the government looks at bringing in a new scheme or new tax to impose on producers to actually fund a ‘new’ Peak Council.

Recommendation 2 reads: ‘The Senate Committee recommends the establishment of a cost-effective automated cattle transaction levy system. The system should identify levy payers against levies paid. This will allow producers to be given their voting entitlements and allow for regular independent auditing and verification’…..and

Recommendations 3 reads: ‘The government notes the development of a register of levy payers will ensure that levies paid by processors are identified as slaughter levies and not as producer or cattle transaction levies”. This action is central to the control of the votes of producers over their own industry, and to having the influence held by processors removed from the grass fed industry. Why the delay??

It is well known NOW that there are over 100,000 grass fed cattle levy payers, but for some reason this still has not been utilized to give producers the vote on what they want, from and for their industry. If Minister Joyce astoundingly wants the producers to also fund their own Peak Council while they fund MLA and are unable to fund their current Peak Council, we would need to know who the producers are of Australia. We then need to them if they want to put their hands in their pockets yet again, and pay for a New Cattle Board. Or do they expect to have their Board financed by the taxes they have already paid as levies?

In Recommendation 4, the committee recommends that Australian National audit office conduct an audit of the cattle transaction levy system, tracing levy from inception and focusing on revenue from, and expenditure of respective components of the levy.

An independent performance review of MLA is due to commence in 2015 which will examine the levy revenue and expenditure, and make recommendations to improve transparency and accountability. How often have we seen so-called independent enquiries into things like the value or otherwise of the marketing transaction rise of $1.50 and of course the independent enquiry into MSA. Look at the faces sitting round these independent committees and make up your own mind.

Recommendation 5 recommends that the Red Meat Advisory Council (RMAC) be wound up.

“The government sees merit in a forum for the whole of supply chain coordination and maximise the opportunities”. Again, have someone other than the Minister’s office take a look at how many people sitting around the table are representing processors who pay so little into the industry, and have so much to say.

The Senate’s Recommendation 7 was that the Department of Agriculture, with the cattle industry, conduct an analysis of the benefits, costs and consequences of introducing registration akin to the USA’s Packers and Stockyard Act of 1921. This would allow the tracing of all sectors of the red meat industry and who receives what part of the final retail dollar.

The government did agree in principle with this recommendation.

One out of seven is not a bad score……it’s terrible!!

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Comments

  1. Fernando Mendoza, 20/07/2015

    Meat processors peak industry body = AMIC
    Meat Processors service provider = AMPC

    Live exporters peak industry body = ALEC
    Live exporters service providers = LiveCorp

    Grass fed beef producers peak industry body = CCA
    Grass fed beef producers service provider = MLA

    Grass fed beef producers (CCA), meat processors (AMIC) and live cattle exporters (ALEC) often have common interests and hence co-invest (through their industry service providers) in R&D or marketing.

    Even though peak industry bodies should (and do) advice their service providers on how to invest levy monies, by law they cannot (and should not) fund themselves with levy monies. Believe it or not, lobbying to reduce the levy to $4.80 with the expectation that grass fed beef producers will voluntarily pay the additional $0.20 to fund their peak industry body is far more possible than the expectation of simply using levy monies. You may think this is bureacratic but this is the reality.

    If you are really interested on this subject you need to understand how CCA has been funded and how its board members have been elected before the recent changes (step in the right direction).

    I honestly believe the grass fed beef service provider (MLA) should not be involved in this process.

    Please note the Sheep meat, grain fed beef and goat industries have their own peak industry bodies but share MLA as a service provider (in case you are wondering).

  2. Philip Downie, 17/07/2015

    I am now confused. I thought the new body was about collecting and having control of the levy to then be used for grass fed and other industry R&D? Now it would seem it has morphed into a grass fed lobby group where the main aim is lobbying Govt to get outcomes. This later part is certainly not what I want, I want R & D done that is relevant to grass fed producers and the only way that happens is for a group to control the money and assess projects put forward by whomever, the lobbying can be done by SFO etc.

  3. David Byard, 17/07/2015

    Error in submission by David Byard – What we see now is 27,800+ producers – this should actually read 278000+ producers, according to MLA.

  4. David Byard, 17/07/2015

    Alison Penfold of the Live Exporters says ABA incorrectly identifies ALEC as a body receiving their statutory levies. LiveCorp is the body collecting those levies “My Mistake” acknowledges David Byard. Alison goes on to state that LiveCorp and MLA co-invest in export programs. That too may be correct, but the undisputed fact is that LiveCorp collects the statutory levies from live shipping, and manage their own money and research.. They may be a small body, but still have control over their own levies and their $4 million in “retained earnings”. These retained earnings are called “Reserves” in the MLA coffers, and includes a massive amount of grassfed producer’s levies, and has NEVER been available to producers to use as they see fit, let alone the additional levies we pay each year. The simple fact is Processors have a similar arrangement as LiveCorp. The processors have the AMPC and over $40 million in “retained earnings”, removed from their levies received into their office, after which they decide how much they will give to MLA. So why do grass fed producers not have their own service provider collecting all statutory levies? What is the fear behind the producer doing the same as the exporter, the processor? The fear is the “honey pot” will be removed. Those blocking the change we need are those who use this money for themselves, instead of trusting the producers to co-invest with the MLA and instead of giving them a well resourced New Cattle Board. What we see now is 27,800+ producers paying a $5 levy that is being dished out to different providers like – MLA, NRS, AHA and producers having no input into how that $60plus million per year is spent. Democracy is great, but only if it is the same for everyone. And currently there is no democracy in the red meat industry.

  5. deborah newell, 16/07/2015

    There are so many great stories to be told about grass fed beef that will encourage many to return beef to their plates. One story in particular needs to be told and that is to do with the flavour attributes of naturally grazed meats. Since investigating this over a period of 6 years (1996 -2001) when the discovery was first made of the different meat flavours imparted by different pasture groups nothing has be done to further research this wonderful story. I have spoken to meat scientists, MLA and PCAS and I know that there is definite interest in such a project. The meat scientists have offered a ball park figure for such research from their end and MLA have suggested that I need to get industry support. This is where grass fed levies should be going – to research and tell the wonderful story of the varietal and seasonal flavours of pastured beef. It can only lift the consumers perception of beef from a ‘one flavour fits all’ commodity protein to something as interesting as the wines we buy. Add to that story the provenance of our many regional, beef producing, natural landscapes and we will grow the beef-eating customer base. Deb Newell, Paddocks to Palates

  6. Sandy Maconochie, 16/07/2015

    Minister Joyce is a grass fed producer and like many others understands that CCA has all along had the power to direct its OWN service provider (MLA) into how it’s levies are spent. Of course CCA, ABA etc, have it in their interests to stick it over a few senators to get complete control of the statutory levy so they can fund their show the easy way. Statutory levies are statutory to stop this form of hoodwinking in the first place. As highlighted by Ms Penfold ABA have always had a habit of distorting the facts. It makes sense to form one big grass fed peak council, break away from the old SFO etc system, generate funding streams similar to others, then if you don’t like contributing to statutory levies as well as your own peak council, then simply offset by reducing the levy. That way the 100,000 levy payers are not forced to “join” a peak council.

  7. Alison Penfold, 16/07/2015

    The statement by the ABA makes the claim that ALEC receives levies paid by live exporters on the export of livestock. This is incorrect. LiveCorp is the legislated body that receives levies collected on the export of livestock. The ABA statement also incorrectly states that ALEC has not made a contribution to “the upkeep of MLA”. LiveCorp and MLA co-invest levies in the Live Export Program that supports RD&E in animal welfare, in market training and supply chain efficiencies in the live trade. LiveCorp’s contribution is outlined in its Annual Report and consultation on the expenditure of levies is undertaken in each year’s Annual Operating Plan.

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