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Grassfed restructure: Is it time for a repeat of 1997?

James Nason, 16/10/2015

When red meat producers were unable to agree on how to restructure their industry back in the mid 1990s, then primary industry minister John Anderson stepped in and restructured the industry himself.

Stakeholders were basically presented with the model, and told to ‘go and make it work.’

Former deputy PM and primary industries minister John Anderson addressing a transport symposium in Toowoomba in August. Picture: Lucy RC Photography.

Former deputy PM and primary industries minister John Anderson addressing a transport symposium in Toowoomba in August. Picture: Lucy RC Photography.

The current grassfed cattle industry restructure debate has now been dragging on for four years, drawing the focus of industry leadership away from the core business of representing grower interests, and still without a definitive result.

Is it time for a repeat of 1997?

Beef Central put that question to the former Primary Industries minister John Anderson during a recent interview, and he agreed that it is now time for decisions to be made.

“I doubt very much whether there is room for a great deal of further debate, it is probably time for decisions,” he said of the long-running grassfed industry restructure process.

Central to the industry restructure debate in the mid 1990s was the division between southern and northern producers over whether or not to split marketing and R&D of sheepmeat and beef.

While a report he commissioned as the Minister for Primary Industries recommended splitting the two, Mr Anderson decided to keep them under the same roof within the then newly formed Meat & Livestock Australia.

“I decided against that because it was just too much fragmentation,” he said.

“Two restaurants, one kitchen can work.

“There was just too much potential for wastage of producer and tax payer dollars by having two organisations researching red meat when there was significant overlap.”

The current grassfed industry restructure debate is centred more specifically around the issue of producer involvement and whether they have an adequate say over how their levy funds are spent on R&D and marketing.

That has in turn led to a calls from some growers for grassfed levy funding to be removed from the Research & Development Corporation Meat & Livestock Australia and given to a newly formed grassfed grower elected and focused body to control.

Mr Anderson said a core aim of the 1997 restructure was “to make the whole process as democratic as we could”.

He said the constitution prevented levy funding from being controlled by popularly elected bodies.

“The fact is that if you want access to taxpayer levies, both the levies that are collected are taxes, and the contributions that are made by the Government are taxes of course, and you can’t have a popularly elected body other than the parliament oversighting those taxes constitutionally.

“I think you will find the Government can’t even if it wants to, because, rightly, the constitution demands the minister be accountable for all taxes collected and all taxes disbursed in the parliament.

“And I think that is a right and proper protection, our forefathers knew what they were doing. The history of producer bodies, with the best will in the world, indicates that it is a very good thing if they remain accountable to the parliament, even if they chafe occasionally.”

While people tended to focus on structures, often the culture was to blame, Mr Anderson said.

“Looking at MLA, it is the old story, very often cultures do get a little inward looking, and they need a little bit of a shakeup.

“But sometimes it is very easy to say the architecture is wrong when all you need is to freshen up the personnel and reinvigorate the organisation.

“One of the things I have learnt over the years is that almost any organisational structure will work if you have the right people with the right motivation in place.

“People get carried with structures.”

Asked if he would take the same action that he took in the mid 1990s if he was the agriculture minister today, Mr Anderson simply answered: “I think there has been enough time extended now”.

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Comments

  1. Loretta Carroll, 20/10/2015

    I agree with John Anderson, it is now time for decisions to be made to lead reform of the red meat industry. Although in 1997 John Anderson chose to ignore the recommendations of the Task Force to split sheep and beef levy funded marketing and R & D – back then Australia had roughly 126 million sheep (down from 170 head in the early 1990’s) and about 26 million cattle whilst we now have 72 million sheep and 29 million cattle – so whatever the pros and cons of the decision to split cattle and sheep in 1997 there can be little argument against splitting them now. The sheep industry could gain some real innovation if wool producers who by definition are also meat producers could join forces with sheep meat producers and have their own well funded corporation looking after the interests of the wool and sheep meat industry. I fully agree with Peter McHugh’s comments demonstrating the key elements of John Anderson’s 1997 reforms was the separation of the producer levy funded corporation MLA and the processor levy funded corporation AMPC – a separation which has since become blurred as a consequence of the increased vertical integration of processors into feed lotting which according to a Northern Star newspaper article meant that by 2008 more than half of the top 17 levy payers to MLA were processors. Processors feed lotting vertical integration has continued at a pace since 2008 so presumably that percentage is now higher.

    As an EO of a small Victorian abattoir in 1997, I was actively involved in seeking change to separate the levy structures of the AMLC. The AMLC collected and managed the transaction levies from producers and slaughter levies from processors, small processors at the time felt they were disadvantaged and not receiving any real value from the AMLC. As a small abattoir we benefited greatly from the reform in 1997 and were very thankful John Anderson lead that change. As an interim director during the AMPC’s establishment the simple rationale was to direct its funding for the benefit of processors.

  2. Peter James McHugh, 16/10/2015

    James,
    This is so true and I agree with you , which would mean the Agi Minister should step in and run with the MLA Senate inquiry’s 7 recommendations .
    The main problem with MLA is Processor involvement.
    I can assure you John Anderson intentions back in 1996 , 18 years ago which
    I have on good authority was for a Producer only MLA organization with no processor involvement .
    Unfortunately no one foresaw vertical integration by the processors into the feed lots which sees the 30 day rule provide processor involvement , which give the processors a large voting block in MLA and hence to much control over the producer group.
    Recommendation 3 , would see processor levy’s removed and given to their own highly financial group AMPC ( $40 million in reserve ) .
    Cattle council ( Zero in Reserve ) will get a $1.5 Million from MLA over the next 2 years to keep them afloat.
    I can assure you if the minister pick up on this along with other recommendation we would start to see a strong united group of Producer only working with MLA to help the Australian Family Producers .

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