News

Does the red meat sector still need compulsory levies?

James Nason, February 7, 2020

While most of his address to the Rural Press Club of Queensland lunch in Brisbane on Thursday was focused on making a case for action on red meat industry reform, Don Mackay also ventured into some areas that audience members may not have been expecting.

One in particular was when he paused to pose a question that went far beyond the restructure to the heart of the levy debate itself.

That is, does the red meat sector still need compulsory levies?

Are they an essential part of the red meat industry’s future?

He noted that much of the political noise that dominates agripolitical activity is directly as a result of mandatory levies paid.

In the red meat sector alone 16 levies are paid to five key recipients – the Australian Meat Processor Corporation, Livecorp, Meat & Livestock Australia, Animal Health Australia and the National Residue Survey.

In addition, the Government stumps up co-investment to MLA each year for the use of MLA, AMPC and Livecorp.

In 2018-2019, Mr Mackay said, the total value of red meat levies was $132 million, with government co-investment totalling an additional $80 million or so.

A lot of money, but also a relatively small amount in the scheme of industry turning over $65 billion dollars in the same period.

The scale of levies paid per contributor varies considerably, from the the smallest hobby farmer paying a single $5 transaction levy to the biggest corporate agribusiness paying in excess of $1.5 million in mandatory levies in combined levy streams.

However no one can say exactly how much each levy payer pays, because the industry still does not know who pays the levies.

Legislation passed in 2018 means levy payer registers can now be developed for each sector if requested by the relevant Research Development Corporation, but the most recent advice from the Department of Agriculture is that that process is not yet underway for the grassfed sector because it has not received received a request from industry to create such a register.

Mr Mackay pointed out that businesses that pay levies rightly want input into, and ownership over, how mandatory levies are spent, while some businesses that are not directly engaged often also question the value of paying levies.

Some industries have no mandatory levy or industry service provider and manage innovation and marketing in-house.

While not pushing a particular position, Mr Mackay said the question of whether compulsory levies should be part of the industry’s future was worthwhile asking.

“It begs the question: Does paying levies actually form an essential part of a better red meat future?

“Do we want to be paying levies in 2030?

“There is clear evidence of great things being achieved with levies in the past but is this the best plan for the future?

“There are some industry members who believe it should be actually be more.

“I am not advocating any particular position, but the question should be asked.”

What do readers think? Should compulsory levies continue to be paid in the red meat sector? Add your thoughts in the comment box below. 

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Comments

  1. John Hall, February 17, 2020

    Its time producer levies were debated at the MLA AGM with ample time for discussion. The Board or the CCA should find the courage to float a series of motions that cover the various components of the levy and their financial allocation. That is, separate motions on on-farm R&D, processor and off farm R&D, on farm integrity systems, monitoring in abattoirs, marketing of product overseas, marketing of product domestically, advocacy of the beef industry as a whole and funds to other bodies.
    The pre AGM debate would force transparency, bring an understanding of where the money goes, and allow debates on NEWCO etc to be far more informed.

  2. John Wyld, February 11, 2020

    Without collective funds our beef industry would be a shadow of what it is today.
    It is easy to forget the 1970s and 1980s when our reputation was that of a supplier of variable quality, manufacuring meat, with a history of substitution, contamination and residue violations.
    At that time, our export markets were restricted by tight quotas and tariffs, or limited by the Meat Import Law into the USA.
    After a series of expensive market disasters, using our collective funds as a catalyst to bring us together, (sectors and States) we managed to put in place safety and quality systems to enable our industry to become what it is today.
    As a high cost country, we cannot survive without a credible and respected food safety regime.
    Nothing is perfect, systems always need to evolve, but without a pool of collective funds, we would be unable to do anything as an industry.
    The next crisis is always just around the corner .
    Incidentally, the levy can only be changed after lengthy , national consultation and a vote at the AGM, which all levy payers are encouraged to attend.

    • Brad Bellinger, February 21, 2020

      John Wyld’s comments do not pass the pub test I am surprised he is featured on the comments page .There is no evidence to suggest that the MLA has contributed to higher cattle prices. We are still in a booms and busts industry as cattle producers.Since the formation of MLA domestic consumption has almost halved and the USA has gained market share in our premium markets of Japan and S.Korea and sells for more on the retail shelf.
      The MLA and CCA have given us a tracing system that doesn’t trace meat,,a grading system that doesn’t go to the consumer and over a billion spent on Rand D that is not taken up by producers.

  3. deb newell, February 11, 2020

    Having attended the lunch and listened with interest to Don’s address I kept waiting for some mention that RMAC was looking to fund counter research into the nutritional value and efficiency of including animal in human diets as we are, after all, omnivores. What livestock producers across all species seem to fail to appreciate is that you are all facing an existential crisis in the face of swelling followers and very loud promoters of meat free diets for humans. Yes, this is unnatural and can devastate human health and yet there is no researched, counter-argument about the environmental devastation caused by covering some 15% of Earth’s grasslands with mono-cultured plant foods. I call vegans and vegetarians Habitat Eaters – because their foods are at war with plant and animal biodiversity. Also, the methane debate is scientifically corrupt as the ruminant biomass hasn’t changed for tens of thousands of years – just the species numbers – while rice cultivation is a huge methane emitter BUT who from all your levy funded agencies are putting this argument into Main Steam Media on a weekly if not daily basis?? And where is the accounting for all the other co-products from livestock that supply biomedical resources, tools, charcoal, moisturisers, fabric, hides, manure, blood and bone … and even tractors. A lettuce isn’t even a good food source.

  4. Loretta Carroll, February 10, 2020

    If we could get to a point where producers played a pivotal role in the decision making process for the amount of levy paid and its distribution, it would likely ensure producer adoption of the R&D and would be a stepping stone to the industry becoming fully transparent.

    My guess is that producers would be happy to pay a levy if it assisted them in becoming more profitable, more environmentally savvy, aids in reducing our workload and promotes our social licence.

  5. Paul Franks, February 10, 2020

    The levy will never go away as it funds many careers in bureaucracy and leadership. I can understand funding the R&D side especially since the states have decided that agriculture is not that important and gutted the state agricultural departments that used to be full of practical knowledgeable people, but I wonder if it is time for MLA to let the marketing side go. I do not sell a single beast to MLA but it is them that tells me the terms on how I am supposed to sell animals, not the buyer of the animals. If I never sell a single beast MSA because I have bos indicus cattle, why should my levy money be spent on lining someone else’s pocket who is getting far more money that I do. When they get more money they are in fact as a percentage of the sale price contributing less levy then a person who sells their animals for less.

  6. David Lovelock, February 9, 2020

    Livestock levies are indeed a no brainer , they need to continue ,in fact I argue they need to increase . To expect government to contribute all funding used for R & D , marketing , animal health issues and residue testing is unlikely in the extreme . The livestock industry has and continues to gain significant benefits from these services . Proof of our disease free status is a major part of the international saleability of our meat , while Australian R&D continues to provide significant increased returns to producers and processors . Change to the method of deciding the level of the individual levy to an ad valorum should be considered .

  7. Mike Introvigne, February 8, 2020

    How else do we fund promotion, R and D and government lobbying.

    • Grant Piper, February 10, 2020

      Mike, our levies cannot, by law apparently, pay for any lobbying (ref. 2011 live export ban). Get rid of the ‘tax’ and let producers support their own organisation of choice voluntarily. Supposed ‘R&D’ by MLA has only given me NLIS, EU accreditation, LPA and NVD – which none of our competitors have! Remember ‘Cattlecare’ – rejected soundly by the majority of producers – and we have it all by the back door 20 years later. That’s how the Cattle Council and MLA work for us (sic)….If, however, the levy and Government contribution went to pay independent carcase graders at each works, I’d support that.

  8. Brad Bellinger, February 8, 2020

    Of course the livestock tax should be abolished it is a no brainer.2 Billion taken from farmers over 20 years with no benefit just ineffective regulation such as the failed NLIS and invasive LPA that have sucked another 2 billion (at least from farmers pockets).
    The National Party should be ashamed of themselves for setting up such an ineffective model.
    I would love to know exactly how much money the large multinational processors have received from MLA. Perhaps another Senate inquiry ,sorry I forgot the Nationals just ignore them.

  9. Paul D. Butler, February 8, 2020

    Paying levies (taxes, hush money, mob protection, etc) is antagonistic to improving the beef industry.

  10. Helen Knight, February 7, 2020

    Good on Don Mackay for raising these issues. However he omitted the LHPA levies paid by all cattle producers in NSW. In my case, with 60 head of beef cattle, they are $219 per annum. We get very little for this. Other states manage without these charges. The Commonwealth duplicates many of the NSW LHPA activities. in NSW we raise this issue with the NSW government every decade or so but get nowhere. However they have managed to wipe the charges for 2019-2020 due to the drought.

    • Natasha Wing, February 10, 2020

      Don’t forget Helen – it is now LLS. Lucky they have all those levies you have helped to contribute towards to cover all the new branding, uniforms, etc.

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