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CCA Restructure: Australian Beef Association view

David Byard, chief executive officer, ABA, 15/11/2012

In this opinion article Australian Beef Association chief executive officer David Byard outlines the organisation's view on the current Cattle Council of Australia restructure process.

Cattle Council at present is trying to create a new structure that will allow it to be more relevant to the red meat industry, so far its actions seem to be doing the opposite.

Who could disagree Cattle Council is owned by state farming organisations, who themselves are finding the going very tough.  Some are losing members, have reduced funding, are fighting a multitude of battles, and issues, and are desperately trying to run their own organisations.  This leaves very little time or money to be put towards organisations like Cattle Council.

We have seen increasing numbers of non-financial state farming organisations and members sitting around the Cattle Council table, as paid members. Of course some of these people are desperately trying to keep state farming organisations in control.

Perhaps it is time to clarify some points.

Cattle Council has publically acknowledge 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.

In another statement cattle council chair Andrew Ogilvie says that any suggestion that Cattle Council is going broke is not true and the council has sufficient funding to operate well into the future.

To me if CC, is not getting sufficient income to carry out its duties there can only be one result.

As it stands now a person that is not a member of a state farming organisation is not eligible for election to the Cattle Council Board.  This type of structure clearly makes Cattle Council a subcommittee of state farming organisations.  This type of approach, is certainly not democratic, nor an example of good Governance.

Surely when one sells an animal it attracts a levy and this transaction should be recorded against the producers name so at the end of the year before the AGM they could receive their voting entitlements. This should allow levy paying producers to vote for a new board which would be democratically elected by producers for the benefit of producers. To me this is in stark contrast to what we have now, it also meets the test of being democratic and shows good governance.

Hopefully, this type of board election would have no place for sectorial seats like state farming organisations. A voting system like the Australian Wool Innovations has been well tested, is relatively simple, and could be used.  Why reinvent the wheel?

Within the Australian meat industry structure, that resembles a bowl of spaghetti, Cattle Council is one of six organisations which have competing interests that are supposed to run the MLA; it appears now that the MLA is running Cattle Council.  (Processors want stock as cheaply as possible, whilst producers want as much as possible.)

Cattle producers grass fed levies bring in $56 million to the MLA coffers, this money goes straight from DAFF to the MLA coffers. This is more than the other five peak councils put together.   Cattle Council have no say in where that money is spent.

This is in direct contrast to processors who contribute only $9 million towards the MLA. However, they demand and ensure their money is spent as they want.

Another anomaly is that AMPC refuse to contribute anything towards overseas marketing. However, cattle producers have no such luxury. The president of Cattle Council is quoted as saying “I guess you can say it is a tussle between the SFO's and the corporates”.  To me this quote shows how out of touch Cattle Council has become; to me the corporates Coles, Woolworths and McDonald's spring to mind.  One would never know how much marketing dollars are thrown at these three; it is all in commercial confidence. However, it is no secret that they spend levy paying dollars on their marketing campaigns.  The fact we do know is that they don't contribute any levies towards the MLA's upkeep.

It is interesting to note that Cattle Council are talking about payments from MLA, and others, to do consultancy work.   it is interesting to note Cattle Council say that they are responsible to providing direction to the MLA on how it spends its grass-fed funds.  Is this possible if they accept MLA funds to keep them afloat?   Cattle Council is an organisation that is run by three full-time staff members.  And how the staff can generate hundreds of thousands of dollars in consultancy fees puzzles me.  Could it be possible that if Cattle Council accepts money from people like MLA this compromises their ability to exercise any sort of control over the MLA and their ability to fight on the part of producers when they are accepting government money.

What's the answer? Very simple!

 

  1. Board elected by Grass Fed Levy Payers.
  2. Board directly accountable to Grass Fed Levy Payers.
  3. Grass fed levy ($56m) to be transferred to the new organisation.
  4. New organisation to determine level of levy, manage and spend levy (through service providers including MLA).
  5. New board to determine the need, structure and membership of specialist, admin, policy and advocacy committees.
  6. A voting system that is built around a system where each transaction not only attracts a levy but a right to vote.

This reform will create an empowered and accountable organisation for cattle producers.  The new CCA will be a Peak Council, constituted the same way as existing Peak Councils (AMPC, ALIC).  It will fit neatly into the existing Red Meat Industry Structure causing minimal disturbance to existing arrangements between AMPC, ALIC, ALFA and MLA.

If we continue to go down the same path without change sadly as always it will be the producers that will pay dearly for appalling decision making.  We all deserve better.

 

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