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Can states ‘double-dip’ under new Cattle Council structure?

James Nason, 10/09/2013

As the cattle industry absorbs details of Cattle Council of Australia’s preferred restructure model released last week, some are questioning whether it goes far enough to ensure independent candidates will have a fair chance at winning election.

For the first time in its history the national grassfed representative body will allow non-members of State Farm Organisations (SFOs) to join as direct members and to stand for election to its board.

The new model will come into effect in November if it is passed by a vote of Cattle Council of Australia’s existing SFO-based membership at its annual general meeting in late October.

The move is designed to give producers who choose not to be members of SFOs an opportunity to provide direct input into national cattle industry policy setting and to stand for board elections, while also broadening CCA’s membership beyond SFOs alone.

As it stands there are some 80,000 cattle producers in Australia, according to Meat & Livestock Australia, with just 15,000 of those being members of SFOs.

While there has been widespread agreement that a direct-membership pathway is needed to provide greater representation for all producers, there has been debate over whether the board should be weighted in favour of SFO-appointed councillors or independently-elected councillors.

SFO membership fees contribute around $430,000 to CCA’s operating budget, which underpins an expectation by SFOs that they should retain a dominant voice on the board. (Some cash-strapped SFOs are believed to be well behind in their membership payments but still retain a voice at CCA board level.)

Others believe the only way CCA can provide a truly democratic board and claim to speak for all Australian cattle producers is by weighting the board in favour of independent directors, directly elected by all cattle producers.

Under the preferred model, CCA has adopted an approach that will wind the existing board back from 23 SFO-appointed councillors to a board that will have 8 SFO-appointed councillors (one appointed by each SFO around Australia, with SFOs that pay bigger membership fees getting more votes) and up to four seats for independent councillors who stand for election from the council’s membership base.

Producers who are not members of an SFO will have the option to pay a $100 + GST membership fee to become a direct member of Cattle Council.

Producers who are paid-members of SFOs will not be required to pay an additional membership fee to also become a member of Cattle Council, but will still have to physically sign up to become a member of their own free will.

When 200 cattle producers have paid the $100+GST membership fee to join Cattle Council two seats will be created for independent councillors, and when 500 have joined up, a further two independent seats will be created.

It is important to note that any producer who chooses to be a member of Cattle Council, whether they are a direct-paying member of a member of an SFO, will be able to stand for the independent board positions.

This has raised questions about the potential that exists for SFOs to seek to boost their voice on the board by “double-dipping”, by standing their own candidates for election as independent directors.

“Under the proposed rules there is nothing to stop SFOs directly or covertly putting a member up for election,” Australian Beef Association chief executive officer David Byard said.

“Clearly if this did happen by an SFO with a large membership base, a independent candidate would stand little or no chance of obtaining a seat on Cattle Council board.

“There will need to be rules that clearly define what an independent member is, I think a rule needs to state to be independent you cannot be an office bearer, or committee member of a SFO, if this is not done it will make the whole restructure farcical.”

Cattle Council of Australia chief executive officer Jed Matz rejected the view that the new model was not democratic.

"It doesn’t matter how a producer pays, if they put money in through SFOs or as a direct member, all members get a say, so how is that anything but democracy?," he said.

"Are the ABA saying they’re not going to try and get together and influence a vote for a particular candidate? That is democracy for you, that is how it works."

He said the Australian Beef Association was able to provide comment on the model via the restructure reference group CCA had established to allow interest groups across the industry to have input into its restructure, but the ABA had chosen not to participate in the previous two teleconferences held by the group. 

"If they want to sit outside and throw rocks that is up to them," he said.

The Australian Beef Association has also criticised Cattle Council’s plan to accept more indirect levy funding through Meat & Livestock Australia, suggesting the move will mean it will no autonomy and will ‘be a servant’ to MLA.

“Cattle Council talk of receiving or negotiating indirect access to the $5/head statutory transaction levy that is paid to MLA, and there is talk of new service agreements, with income from these agreements bringing in approximately $800,000.

“Remember this is our levies.

“The governance of this relationship does not seem above board, to me this is like the lower house of Parliament giving the Senate enough money to keep it running so long as it passes all the legislation the lower house agrees upon.

“It seems as well Cattle Council will now request MLA to fund independent policy research, surely if you're a peak Council and asking the organisation that you are set up to oversee to fund policy research then you have a problem.”

Mr Byard said the only way to ensure all cattle producers received adequate representation was to adopt a similar model to Australian Wool Innovation in which producers automatically receive votes in the organisation for every dollar they pay in levies to the organisation.

“The fact is nobody has any idea of how many cattle producers pay the transaction levy and until we can give all levy payers a vote, then MLA will continue to spend huge amounts on processors, retailers and supermarkets whose interests may clash with grass fed producers interests.

“Those in a position to make change so red meat producers can have equitable national representation need to make the changes now.

“Cattle Council have had the opportunity but it seems clear they have squandered the opportunity to look after themselves, perhaps the new Minister for Agriculture can help facilitate change.”
 

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