Theories have sprung up like daisies around the reasons behind Scott Hansen’s sudden and unexpected announcement that he will depart the top job at Meat & Livestock Australia at the end of February.

He surprised the industry by announcing his resignation on Tuesday, to take up the plum director general’s position in the NSW Department of Primary Industry (click here to view Beef Central’s Tuesday story).

Incompatibility with the MLA board, or some level of board dissatisfaction with Mr Hansen’s operational performance are just two of the theories that have been doing the rounds behind the scenes, but after discussions with MLA boardmembers themselves, both prospects can be dismissed outright.

It seems Mr Hansen and the board continue to enjoy a solid and productive relationship, and he continues to have the board's outright support. 

Instead, the decision to depart MLA after only 30 months appears to have been initiated entirely by Mr Hansen himself, based on a set of career and personal circumstances.

With a family including three young children – a daughter and two sons –  the MD position at MLA was hardly conducive to a healthy work/life balance, with long periods away from home in other parts of Australia or overseas.

At first glance, some saw the move to NSW DPI as a considerable step down from his role at MLA. But it’s easy to under-estimate the significance of the State Government role, and the challenge it represents.

NSW DPI is by any standards, a mega government portfolio, encompassing fisheries, forestry, natural resources and national parks as well as mainstream agriculture. The department employs more than 2600 staff and operates on an enormous annual budget exceeding $1 billion.

Mr Hansen said his personal career passion remained in the industry service provision area, working on long-term programs and strategies for industry.

“An opportunity like the DG’s role at NSW DPI does not come along often,” he said. “I see it as a significant challenge, and it’s one I’m looking forward to,” he told Beef Central.

There is also the underlying assumption that it will allow him more night at home than his responsibilities with MLA since 2011 have.

It could also be seen as a feather in Mr Hansen’s cap, in terms of his own and MLA’s recent performance, that he has been head-hunted into the NSW director general’s position, one of the prime roles on Australian agricultural administration.

Mr Hansen chose not to comment on the signal than Beef Central has picked up from large MLA levy payers, both private and corporate, since Tuesday that the industry is ‘crying out’ for an external appointment as the next MLA managing director, following two internal promotions in David Palmer and Scott Hansen.

“I’d expect the board to do a very thorough international search for the right person to fill the role,” was his reply. “We’ve been extremely lucky to have talented, passionate people working inside the building, but at the same time we’ve been able to bring great people into the business also, when we’ve needed to.”

He said the broad skills base around the MLA board table would also complement the skills-set of whoever was appointed to the role.

 

Move back to core business      

So is Scott Hansen satisfied with the decision to take MLA back to its ‘core business’ two and a half years ago, divorcing itself from the more political responsibilities to focus solely on R&D, marketing and market access?

“I’m convinced it’s been the right move, at the right time,” he said.

“It’s created a renewed focus, internally, allowing us to make bigger inroads in some of our core programs and areas of responsibility, than we otherwise would have.”

“I’m thinking here of areas like MSA, and the work we have been able to push ahead with by keeping out of the political space. That’s includes some of the R&D around increasing transport times for MSA, which has opened up new possibilities for producers who previously were outside MSA’s catchment area because of distance. It is also reflected in the crucially important work around the MSA Index, and the Optimisation model, which will greatly enhance the opportunities for MSA supply chains,” Mr Hansen said.

“These massive changes really position the industry to leverage off Australia’s key competitive advantage, which is not in being the cheapest producer, but in making the most of the brand attributes that we can offer into the international marketplace.”

“All of those steps – increasing the range of producers that can supply, increasing the tools for processors to sort identical eating quality outcomes into brands that they can then be rewarded for, and passing those rewards back to the producers supplying into those brands, are some of the biggest advances we have seen in MSA.”

Divorcing itself from the political side of MLA’s previous operations had also helped MLA function better in the marketing arena, Mr Hansen said.

“There have been greater efficiencies and synergies built into the marketing effort, through moves like bring domestic and international into one team, working collaboratively on demand,” he said.

Asked how much credit MLA could take for recent dramatic growth in emerging markets like China and the Middle East, he said MLA’s marketing work had little to do with short-term outcomes.

“What we bring to the table is that fact that the industry has been investing in presence on the ground, over much longer timeframes, to create the environment to allow such changes to happen. We’ve had a Middle East presence now since the 1970s in AMLC days. Since 2011, that has included the recognition of the shifting influence over what the key markets are in the region for Australia, and the subsequent shift in the regional office from Bahrain to Dubai, to capture the enormous growth that’s been seen in chilled product in other parts of the Middle East.”

In China, Australia had had a presence on the ground even back in the days when there was little or no Australian product in the marketplace – building relationships and setting the foundation that has delivered today’s growth.

“By keeping it’s eye purely on its core business, and not on the day-to-day politics of the industry, MLA is really able to make a difference by defining and focussing on the long term growth trends, and determining what needs to be done in those marketplaces to get the best possible outcome,” Mr Hansen said.

“It’s also allowed us to identify and develop the tools that have allowed the industry to meet the requirements of each niche market – each of which has its own set of values – and the on-farm R&D tools to allow producers to remain competitive and satisfy increasing scrutiny around animal welfare and environmental responsibility.”

“It’s those kind of long-term views and positions where MLA’s role works best, creating those tools and opportunities so that when the commercial planets align, the industry is ready to exploit the opportunity.”

 

R&D under ‘real challenge’

At much the same time as Scott Hansen arrival in the MLA MD’s role back in 2011, the Federal Government announced that it would no longer financially support the Beef CRC program.

“That represented the end of an era of collaborative, long-term, multi-party R&D contacts, that had really set the beef industry up in some keys areas like genetic knowledge,” he said.

“That’s meant that R&D has been a challenging field over the past two years, to try to replicate the kind of collaborative approach we became used-to during the CRC era. Every single R&D agency is being pushed for resources, and the one I’m going to – NSW DPI – is no different, in trying to try to do more with less.”

“That’s presented a real challenge in trying to bring together multi-party, long-term R&D investments. At the same time, outcomes from previous investments have struggled with adoption, because many producers, sadly, just don’t currently have the opportunity to make those changes on-farm, because of their financial position, caused by drought.”

Other factors had also contributed to that lack of uptake: the availability of labour, for example.

Asked whether the industry had successfully transitioned into the post-CRC era, Mr Hansen said there was still work to go in this area, and it was one of the key reasons why the MLA board commissioned last year’s R&D review, which had attracted a lot of attention since being completed.

“We weren’t confident that we were where the industry needed us to be, in the absence of the CRC model, to try to maximise the opportunities after the completion of the CRC program,” he said.

Mr Hansen said some of the key aspects to come out of the R&D review were the necessity to build consultative processes with producers who would have not only the time and energy to commit to consideration of where innovation investment needs to be made, but also to act as catalysts for the dissemination of extension and adoption information.

“That I think, will be a key piece of R&D work for the company this year,” he said.

“There’s some quite confronting pieces of work at the moment that look at benchmarks of where things are at, and where the opportunities lie in R&D. But it’s hard to identify where change can be made when so many producers are in a position, due to climatic conditions, where they just can’t seize the opportunity or make the changes that are necessary.”

“One can only hope that the start of rain, like the northern cyclone we are seeing at the moment, will help change that.”

Mr Hansen said the weather conditions over the past 18 months had produced a cruel twist of fate.

“Here we are – a major producer of food products for the world, with an exceptional standing in the international marketplace because of the food safety and integrity systems we’ve put in place more than a decade ago. We’re faced with exceptional global demand for our product, everything from lean manufacturing beef through to high quality chilled grainfed cuts, and underpinned by marketing and awareness activity that has convinced buyers that the product is worth paying a premium for.”

“Yet we are being cruelled by conditions at home that have resulted in a saturation of the livestock marketplace that means that returns to producers are in no way aligned with the international demand. It is a horrible distortion, beyond anyone’s control.”

“While it remains as true as ever, it’s hard to suggest to producers to remain optimistic, because agriculture is the sector to be in at the moment, given what’s happening overseas.”

“But if people can pull-through, the business of producing food for a growing population, with growing incomes, remains a great business to be in.”

Australian producers tended to operate under a process where a couple of good years could be cancelled out by a couple of bad ones, before the cycle changed again.

“But the challenge now is that the last drought only ended three or four years ago in many parts of the country, and now we’re right back in it in 2013-14. It’s the gradual accumulation which is pulling people down.”

Market access was another area of growing priority for MLA in the past few years, and if anything, it was becoming even more challenging.

“As we’ve seen, the emergence of new markets brings with it an increased level of risk around access and technical barriers. New markets often lacked the benefit of long term trading to work out regulatory and access issues.”

“It’s one of the prices of entry: emerging markets often equals increased risk on the market access front,” Mr Hansen said.

“That’s why it’s been really important to have gone through the exercise of identifying and quantifying the costs of each of Australia’s hundreds of technical market access barriers, that impede our ability to extract optimum value in international trade.”

“We’ve finally been able to give to government and industry a prioritisation of where our efforts need to be around technical market access, around the world.”

Looking back at his past two and a half years in the MD’s chair, Mr Hansen said he felt that MLA was now better placed to do what it needed to do for industry, than when he arrived.

“I’m sure all the beef industry would rather have the season of 2011 than the one of 2013, but what has been able to be achieved is set to provide future opportunities, once the climate and the season finally turn around,” he said.