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Ex-CCA board member backs return to ‘original MLA concept’

James Nason, 23/05/2014

In the late 1990s North Queensland cattle producer Rod Barrett was a member of the Cattle Council of Australia board which voted in favour of an industry restructure plan developed by then Primary Industries Minister John Anderson which led to the formation of Meat & Livestock Australia.

He told this week’s Senate Inquiry into grassfed cattle industry structures in Rockhampton that at the time, the proposed structure appeared “fantastic” because it gave producer levy payers ownership of the service delivery organisation MLA and meant it would be accountable to the producer levy payers that fund it.

“It was sold to us at that time as a service delivery organisation,” Mr Barrett said.

“The concept was that the Cattle Council of Australia would set the parameters and the policies, and the MLA was to develop those policies and deliver the goods and then report. They would be accountable to the levy payers.”

However in the past 16 years much had changed and there was no longer a sense that producer levy payers controlled MLA.

In 1998 producers held most of the votes, but since that time the expansion of the feedlot sector had seen the lot feeding and processing sectors control a much greater share of votes on MLA.

During the same period the decline in State Farm Organisation memberships had led to the impoverishment of Cattle Council of Australia, which meant it no longer had the staff or horsepower to provide effective policy setting and oversight of MLA.

“All I can tell you, from when I was on the Cattle Council of Australia, is that it is a very lopsided deal because MLA have the staff and the money,” Mr Barrett said.

“When I was in the Cattle Council of Australia we had Bob Coombes as the CEO and we had an executive director, Elizabeth Hutchinson. Despite their best endeavours and hard work, there was just no way that they could cover all of the issues in depth.”

“…MLA was well resourced and had lots of people, and the contest of ideas and arrangements was fairly lopsided.”

Mr Barrett emphasised to the Senate Hearing that his concern was not with MLA staff but merely with existing structures.

He told the inquiry that in his view MLA was staffed by professional people with a lot of expertise.

He also added that he was not disappointed with the results that MLA had achieved over time.

The development of standard carcase language, quality control standards and MSA were examples of good initiatives that had benefitted the industry.

MLA marketing and promotional work had also contributed to the higher retail sale dollar value and the organisation “should be commended for that”.

The anomaly was, he said, that none of the increased value was coming back to producers in terms of farm gate prices.

Mr Barrett said producers no longer felt engaged with MLA. Under the existing structural arrangements, MLA had to consult with Cattle Council of Australia, but there was no requirement for them to follow CCA’s instructions.

He said any new industry structure should ensure MLA becomes “producer owned”.

“If we own it, then we have to have some responsibility for it and we also have to have some discipline over it, if you like.

“I join the people who say they want our levies, control of our levies, and we will use MLA as it was originally conceived: a service organisation to carry out the directives of the producer group or the funding group. We have got away from that. That was the original concept.”

Mr Barrett said a major problem with the Australian cattle market was that it driven only by supply, with little to no price reward for producers for quality.

“My grouch with that is that price only ever reflects supply; it barely reflects quality.

“If you want cattle killed currently, if you ring the meatworks locally they will probably tell you they are booked out until the end of July or into August. So that
puts your opportunity, to unload cattle, out of premium. And they use that. Last year, when there was no effective live trade, the processors used it to advantage and drove the price through the floor.

“This year, because the live trade is back, they have had to hold values at a more realistic level.”

 

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