The Cattle Council of Australia has emphatically rejected claims it is on the brink of financial collapse and is seeking a levy-funded financial bailout from Meat & Livestock Australia.

In an interview with Beef Central this week council president Andrew Ogilvie confirmed the organisation is in the process of discussing an agreement to provide levy-funded services to MLA, but denied the move was related to a “ float” or a financial salvage operation.

Rumours have been circulating in recent weeks that the peak grassfed producer body is on the financial ropes due to a dwindling revenue base and the cost of funding its recent industry-wide restructure consultation process.

Cattle Council has publicly acknowledged that its annual revenue base of $1.3 million is no longer sufficient to keep pace with the many demands that are placed on the organisation.

However Mr Ogilvie says any suggestion the council is “going broke” is not true, and the council has sufficient funding to operate well into the forseeable future (see separate story)

When asked about the rumours by Beef Central this week, Mr Ogilvie said he had decided to disclose details of discussions currently underway with MLA in the interests of setting the record straight.

CCA in service delivery discussions with MLA

He said Cattle Council of Australia was talking to MLA and the Department of Agriculture, Fisheries and Forestry about providing levy-funded services to MLA.

He said the concept had been briefly raised at recent meeting of industry levy payers in the interests of transparency, but had been misinterpreted in some quarters as a financial bailout package which in turn had sparked ongoing rumours about the council’s financial position.

Mr Ogilvie said the negotiations relate to a new strategy designed to give producers greater direct input into how MLA spends its levy-funded research and development and marketing dollars.

Under the strategy – which is still subject to negotiations and yet to be finalised – Cattle Council of Australia would run a series of producer-input forums around the country, in return for service fees from MLA.

“Cattle Council and MLA have been discussing mechanisms to increase producer engagement in strategy and planning processes to do with MLA’s investment in R&D and marketing,” Mr Ogilvie said.

“MLA has service agreements with all sorts of bodies to provide services for them, and also Cattle Council has agreements with the National Residue Survey and Animal Health Australia.

“Cattle Council has a national focus that enables it to go out and engage with producers around the country to get their views on behalf of MLA, so it can better target its marketing and R&D activities according to what producers are telling them.

“As the national peak industry body representing grassfed beef producers, we believe that Cattle Council is best placed to engage with producers, offering a better service to beef producers in terms of their opportunities to have a say and therefore improved feedback, advice and direction to MLA.”

Mr Ogilvie said thisinvolved new activities that CCA or MLA had not been involved in before, and involved sensitive discussions focused on working within the limitations of MLA’s statutory funding agreement with the Federal Government. He said the process also had to receive approval from MLA and DAFF before it could proceed.

Details such as how much money CCA would receive for the MLA work had yet to be determined, he said.

He said the concept aimed to build on the momentum gained throughout 2012 towards the development of a more rigorous sub-committee structure that facilitated wider producer input than is currently the case.

The service agreement would also assist MLA in meeting its own Statutory Funding Agreement requirements to ensure widespread and comprehensive consultation with industry stakeholders.

Cattle Council of Australia is responsible providing direction to MLA on how it spends grassfed levy funds. Asked if the new financial services arrangement could make Cattle Council of Australia beholden to Meat & Livestock Australia, Mr Ogilvie said he believed it would not.

“Provided everything is strictly adhered to with the guidelines, and Memorandums of Understanding etc, there is absolutely no reason why these commercial arrangements can’t be entered into.

“And Cattle Council has never been beholden to MLA, we’re not frightened to stick our heads up and voice our disapproval if we don’t agree with what they’re doing.

“For example, we have for some time been demanding a much-improved domestic beef marketing strategy.”

Mr Ogilvie said the concept will be discussed further at Cattle Council of Australia’s annual general meeting in Western Australia next week, but no conclusion date had yet been set.