As a former lot feeder, producer retailer, supply chain manager and one of the chief architects of the Meat Standards Australia program, Victorian Rod Polkinghorne brings a relatively unique cross-sectoral perspective to the issues facing Australia’s grassfed cattle and beef industry.
In a frank and straight-talking address to the Senate hearing into beef industry levies and structures at Albury, NSW, on Tuesday, Mr Polkinghorne said he believed most industry problems were the result of ‘people and cultural issues’, such as governance ‘gone crazy’ and a lack of strong leadership, and were less about structural issues.
He told Senators that in his view there were good reasons to try and fix what already exists, rather than just tearing down existing structures and starting again.
His central message was that all industry income comes from one source and one source only: the ultimate consumer.
That meant that industry income was ‘totally driven’ by the consumer’s perception of value, which ultimately came back to demand.
“So if we want to get more money into the industry, it only comes from there,” he explained.
“Meat & Livestock Australia can do a lot in that area and have done a lot in that area, to their credit.”
He said that in his view Australia’s existing red meat industry structures were very good compared to those elsewhere in the world.
The United Kingdom, for example, had once had a very effective and world-leading research and marketing organisation called the Meat and Livestock Commission. However, that unified organisation had been disbanded due to industry politics, and had been replaced with separate research and marketing organisations for the Welsh, English, Irish and Scottish red meat industries, which were operating on “about 50 bucks each” and were far less effective.
US research organisations had also become increasingly influenced by the large commercial companies that funded their work, Mr Polkinghorne said. That Australia had an organisation of sufficient mass to “really do something” was a significant advantage for Australia.
‘you hate the bastards when you are on them until you get on somebody else’
MLA was a bit like Qantas, he said – “you hate the bastards when you are on them until you get on somebody else and you sort of work out they are maybe not so bad.”
However, while he believed Australia’s unified structure was the ‘envy of the world’, he did not think for a minute that it was working well.
Governance ‘gone crazy’
This was largely because of a lack of leadership and a culture of control and governance ‘gone crazy’, which was limiting opportunities to achieve significant outcomes.
He doubted that the big achievements of the past would be possible to achieve in the current stifled environment.
“Things like NLIS and MSA were all big deals, (and) AUS-MEAT itself. Those things happened out of a vacuum and they were all risky. Some worked well and some worked not so well. All of them had huge opposition, and some of them have crashed through,” Mr Polkinghorne said.
“In my experience, in the last five years there was no way you would get any of them up. You could have 50 meetings about them, and that would be all good, but nothing would be tried.
‘Everything is so controlled that no-one can move outside the dots’
“There has certainly been a shift in culture, and it has been all about governance. Everything is ticks and licks. It is almost SAP accounting gone crazy. Everything is so controlled that no-one can move outside the dots.”
Mr Polkinghorne said in the 1990s, the industry had a lot of “really strong and passionate people” at the helm, such as Maurice Binstead on Cattle Council, Dick Austen on the former AMLC, and John Hall who was instrumental in Aus-Meat.
“You had a heap of people of that ilk and they fought and fought. There was not a day when we did not have a major brawl as the processors, the feedlotters, the grass-fed people/the Cattle Council—it was sure as hell rough. It was dynamic all the time but everybody there wanted something to happen.
“Now, 20 years later we have the same structure and the problem is to make anything happen.
“With the same structures involved, we have a total shift in culture to where it is all about governance, it is all about being careful and it is all about not being blamed and the worst thing you can do is actually do something.
“I have sat for 2½ years on a research proposal trying to get a contract for somebody when it was agreed and funded and was not controversial. It was just too bloody hard and somebody might make a mistake, ‘My god, what a thing to get blamed if something goes wrong.'”
Mr Polkinghorne said the industry MLA serves was an industry where mistakes happened every day. People were used to mistakes and lived with risk. “I do not think they can bear an organisation that will not take it (risk). They understand mistakes.”
Mr Polkinghorne said MLA was once an organisation that was “totally dynamic, really interested in change and driving some really courageous programs”. He told the Senators he was hearing in the background that there was now a real desire for change at MLA board level, which he “hoped to hell was true”.
Producer-based board, less documentation required
Asked how he would fix existing problems in the industry, Mr Polkinghorne said he would return to a largely producer-based board.
“I do not think they (producers) are as stupid as people think they are. I think special skills are way overrated and they can be hired… . I would be looking for people who have a shitload of passion, who do not want to have to be dragged into doing it, who do not want to do it but just know that they bloody have to because it is important.
“I would not be ashamed if they had a bloody primary school education. If they trade 2,000 or 3,000 cattle a year or they kill 3,000 a day, they have real skills, they know the game and they have got skin in it.”
He said 90pc of the paperwork and controls should be removed and the culture should be changed to one where the biggest thing a staff member could do wrong would be “to do nothing”.
And how would that deliver better farm-gate prices to producers than what is being delivered now, one senator asked?
Mr Polkinghorne said it was unrealistic to expect farm gate prices to change in an oversupply situation where processors were operating at two shifts a day, six days a week and were booked out for two months ahead.
‘At the end of the day we have got to act like an industry’
However, in terms of making beef a better product and worth more money, “you can do a lot in that”.
“There is a lot being done, to be fair, in access to overseas markets, in MSA type things that better describe beef.
“Probably the thing to do is to move around onto the other foot. If cattle get scarce soon then it will be around other way, where the processors will be burning a million bucks a day.
“I do not think there will be many sympathetic producers out there saying, ‘You can have them a bit cheaper this week because we know you are struggling.’
“Until we get over all that, the answer to that is reality based trading—better product and transparent value.
“The answer from a producer, of course, is to go and start a co-op if you think someone is ripping you off, and put a supermarket at the front of it.
“But the history of that is not real good. I think we are stuck with an industry where it has got to act like an industry. Eating-quality potential and yield starts when you put the bull in, and it does not finish until somebody eats it—and everyone can stuff it up.
“We rely on each other. We might hate each other and we might fight with each other, but at the end of the day we have got to act like an industry. We have got to keep a pretty unified, big, clear structure that knows what it is doing.”