Rod Polkinghorne
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.”
The Levy review was a populist strategy as a “new”reaction to a cry from the paddock over value (cattle) and value of services (MLA). The review will unlikely change either. One certain outcome is that Government will again be reminded how factionalised the beef industry is.
Rod Polkinghorne and Paul Troja have shown why our system is fragmented as I feel they are indebted to side of the problem and are paying back the financial support they have received over the years .
I would like to run three words past them to put pay to their lip service, Manipulation & price transfer with both found on Google if they want to Google the following.” USA Meat Packers Manipulation .”
Now to help them a bit more go to the article from Food & Water watch July 2010 in regards to manipulation , this shows us two of the main players out of four being JBS Swifts & Cargill being discussed and of cause they happen to have some control of our processing here in Australia.
Next read foot notes regarding a book titled ” Treasure Island – the man who stole the world “, there you will discover where 100 years ago two brothers from England by the name of Vestey were credited with designing Price Transfer and ripped into the Argentine Government & their Cattle industry Plus England chased them for years and guess what they were major players in the Australian cattle and processing Industry ” QME” doing what they did best , I ask the question have they been replaced ?
It has taken years to get a Government to agree to review how our levies are spent. It is so very important that the Senate at least calls for a truly independent inquiry that reports to the Minister and not to the current so called Representative bodies that are a big part of the problem.
I agree with many of the issues that have been raised in the comments above. However unless the structure is changed so that Producers can take
ownership of how their levies are spent and we have a body well enough resources to knock on Canberra`s door we all wasting our time talking to each other.
Of course we should have a producer run board to spend our levies.
For anyone to even imply that we do not have Producers with the business acumen to run a Managerial Board is the ultimate insult.
The last thing the Processors would want is a Board that is actually prepared to stand up to them on many of the rorts that are currently going on in our industry. (Butt profile, Variation in Msa Grading, Yellow Fat to name a few.)
Currently AQIS is a law unto itself.
If we are to have any say in our future and improve our economic return then we must have a well resourced democratically body that commands Canberra`s attention.
As a result the control and more efficient spend of MLA will fall into place.
Please take the time to contact the Senate Review committee and support change. Barnaby Joyce will also need support to orchestrate a restructure.
reply to alex – I shall always remember and Never forgot the following transgression – and that is what it was – Late Bill Gunn – Late Ian Park – and approx 80 producers that attacked from the ”bunkers’ the few cattle buyers (4) which were in attendance – at a Rockhampton Hotel meeting room – 2 p.m. re the plight of the cattle Industry at that time – spring of 1976. Suggestion from floor ‘ that a single selling desk be implemented ASAP’ moved / seconded and opened for debate – Rod Moore spoke these words – quote ‘ a single selling desk would be of little concern – provided that a single buying desk operated along side’. end of quote – I was cat called – booed and made most unwelcome – eventually when Chair settled things down – I asked “why the outrage ?” reason given by the mover and confirmed by seconder of motion was ‘ single buying desk would reduce competition- we need all the competition we can get’ with hand clapping and applause. The Late Bill Gunn invited me later to his room – Leichhardt Hotel – we spoke for some 40 mins – with Bill Gunn commenting – a visionary bloke you are Rod – that will happen one day! you are before your time – the CUA was created some months later with Rod Moore being in the first 50 people to subscribe – I was called a Heretic by Agents / processors alike – ‘water on a ducks back’ – Tom Borthwick contacted me and said -well done Rod – keep up the good work – but keep out of the public eye – they are not worthy of our cheque book. The divide was there then and still exists to this day – today however it is an open wound and each time a stich is in place some section pulls hard and the stich gives away. be careful that the flesh needed to stich the wound remains healthy – it also is starting to degenerate. Cheers Rod Moore
Rod Moore – Casino here- having commenced with TB&S in November 1965, as a livestock buyer – then in 1992 Melva and Rod commenced trading in our own right. That is when the ‘real industry was exposed’ to both of us. It would be wise for all concerned – that wear this Industry on their Sleeves and in their Hearts to obtain a Copy of ‘World on a Plate – a History of Meat Processing in Australia- by Stephen Martyn – read it throughly and re read it many times. This book is a chronicle of exploits and grandeur – failures – success and entrepreneurial guile. It should be compulsory that every property owner / producer / processor and the like understand their industry far better than they currently do. The US and THEM attitude so deeply ingrained by so many in this Industry, for far too many years, has led to the current situ – and unfortunately two generations of people forward, it is doubtful that this Us and Them attitude will be removed to history – and it Must be- pull together and there is light – pull against each other and there is no light – not even a shadow. congrats to Rod Polkinghorne and Beef Central.
What do I expect from MLA? That they enable us as an industry to be price setters instead of price takers. MLA should be setting the terms for us as producers for our product. Its all fine and well for my meat to grade “MSA”, but if my meat marbles 3 instead of 2 am I paid for that? No. Are we still the only country using teeth as a reason to cut the price? Yes. Am I paid more if my beef liver isn’t fluke damaged? No. Oh hang on, “yes” they’ve factored it the price of offal haven’t they??? But what about if it is good? Am I paid extra for foetal blood which is currently at record highs of $800/L? No. Oh sorry yes, there’s a $0.30/kg premium so really I should be grateful. Don’t let anyone tell you there’s no money in that by-product. It gets locked up at the plant. Leave the marketing spend to the processors , meat sellers and supermarkets. If they want to say there’s no money in selling meet, tell them to do what farmers are told to do: get more efficient at what you do and do your own marketing. Please spend my MLA levy on animal health and research and for enforcing a system where I get paid for the WHOLE product I produce and for the quality that it is or is not (and not based on how many teeth are in its mouth).
Good article and some sense from Rod.But nothing changes as it is still them and us i.e producers and processors.Having been in both camps I have an understanding of the issues and the frustrations that both sides have.I can certainly remember that there was a lot of argument but also necessary cooperation during the formation of Ausmeat in Mr Binsteads time .The various sectors of industry did get together and thrashed things out under the umbrella of AMLC and the Chairmanship of Dick Austin.
The “old chestnut “of grading was temporarily overcome with the introduction of the Ausmeat language until the proposal to bring further refinement to description with an MSA specification..The current specs are a far cry from what was originally agreed.Rod ,You would remember this period well. Putting all this history aside,nothing would have been accomplished if the producing and processing sectors had not worked together to achieve a result
I agree with many of the comments that the industry needs more hands on experienced members of the MLA board than “experts”from other fields.This is more important than ever with the growing percentage of our kill going to export markets.
Both sectors have their gripes,but unless there is a structure that enables them to deal with issues sensibly and cooperate to solve them ,nothing will change.
Perhaps Mr Polkinghorne should disclose,in the interests of transparency,exactly how much he and his associates have received from MLA.
Ah, Rod Polkinghorne, spoken like a true processor.
All industry income DOES come from one source and the issue is that very little of it comes back to the sector with the most skin in the game – by far the largest investment. i.e. producers of grass fed product.
Yes livestock prices are a function of supply and demand but the processing sector has absolute control of demand therefore absolute control of price. If the price is too high, simply reduce demand, run a smaller kill.
Lets be very clear here, it is about livestock producers being unable to access more of the consumers dollar despite compulsorily funding most of MLA.
It is about having very little influence of the body we fund. Producers have taxation without adequate representation.
With a lifetime invested in the beef industry I have heard ad infinitum this same message: “Just move along, we are all in this together, the great Eldorado is coming soon. Just you producers get more efficient, keep paying levies and stop whinging.”
C’mon, record prices for our product in US and retail Australia and we know what livestock prices are on our East Coast.
How much more is there to know?
Rod mentions eating quality potential and yield.
We have the best eating quality assured system in the World,that we fail to take advantage of to any great extent in Export Markets.
As far as yield goes, Via Scan was around in the early 90’s, with the technological advances that have been made since then, you would think we would have a decent yield indicator, yet we had last years furore over Butt Shape.
Although I agree that we rely on all points in the supply chain to achieve customer satisfaction with our product, and we need to behave like a united industry. It is not hard to understand the frustration of some people, when you hear that it has been an expectation that Producers would eventually be paid on quality and yield since around the time AusMeat was first introduced.
Well said Grant
The market is never free, level or fair. Only way up is to take the “Gorilla’s” on – if there were more farmers who understood this we could start clawing our way back, but I think we’ll have for the next generation to come through
At long last someone has been prepared to stand up and say it the way it is. Well done Rod the best words I have heard for a long time. We as Farmers are in a supply chain, we need to understand that and many don’t. Paul Troja has also made many valid points. I hope beef producers read both Rods comments and the responses.
Well done beef Central, another terrific article.
So the market is always right, is it? If that is so, why did governments (taxpayers) bail out all the banks? If the market is right, why does the State (taxpayers) build/underwrite the infrastructure so it can the then be sold to a monopoly operator (eg, Macquarie and Sydney Airport). If the market is right, why do we have award wages, penalty rates etc? If the market is right, why mandate onerous requirements for licensing abattoirs that results in a few large works and moving cattle 1000’s of km from farm to slaughter then back to point of sale? I’d like to slaughter a few head each week on my farm and sell them in my butcher shop in the local town – that would be truly free market, not the convoluted inefficient system we have now. I think you live in a fairy land if you believe the ‘market’, as distorted by Government statutes, produces the best results, let alone the fairest. Those with the power buy influence to tilt the playing field their way (Ford, Holden, Obeid, MacDonald et al). The family farmer has no power, thus he gets paid the least possible to keep him in the game. Diversify upstream? I thought specialising and being expert in what you do was the smart thing. We pay the $5 levy to the ‘experts’ to do the research and marketing for us, but now it seems we must be our own marketing and PR experts to convince the public we are ‘sustainable’ etc etc? Mr Polkinghorne is right on one point, no point wingeing about it, or writing posts like this, it won’t change anything. What we have is a system where the biggest gorilla gets an ever bigger share of everything, until they are ‘too big to fail’ and need us to bail them out. The $5 levy/MLA/CCA discussion is only about keeping, or getting, your snout in the trough. Mr P. is also right in saying that when the stock run out, and processors start to pay a lot more, I won’t be offering them a discount.
The real issue for the Australian meat industry is who makes the money within the supply chain and the answer is the person and or organisation that owns the product at its final sale point ie retail or restaurant consumption. The problem for farmers is that they sell at the primary end where the product is treated as a commodity that attracts a commodity price based on global protein prices. Rod is right in saying that the consumer pays, but that is based on the market capacity to pay which is influenced by global protein prices, exchange rates and a whole host of things.
For farmers the issue is simply that they are frustrated by the fact they they do not get their share of the pie in terms of the supply chain capacity to pay. Blaming MLA and others will not change the marketplace, if allowed to operate as it should.
Farmers need to take RISKS if they want more of the cake, pure and simple and retain ownership of the product up the supply chain thus extracting value. This takes courage and know-how, so stop playing the victim and the game of envy and be proactive in supporting the existing structures nameley the MLA, which is trying to be all things to all people and doing it badly. The reality is you will not please all simply because the distribution of wealth is, and will always be, market-driven – and that is called a free market.
Finally a skills-based board is essential, so do not throw the baby out with the bath water
Paul Troja
Extremely well put , the Senate Committee would do well to take heed of the messages here