News

Industry restructure: Let’s not reinvent the wheel to pacify the ‘vocal few’

Beef Central, 11/11/2014

Recent debate over industry structures and the future of the grassfed cattle levy, including this item published yesterday from AFI’s Mick Keogh, has sparked this response from a senior red meat industry stakeholder. As the item is too long to run as a comment below Mick Keogh’s original article, we publish it here as an opinion piece. The author asked that his identity not be disclosed, but he has a long history as a respected contributor to industry affairs.

 

 

So after 35 months, the future representation of beef producers has come to this.

Let us form a new organisation, let government mandate the amount of money this organisation can collect from producers via the livestock transaction levy (read “contribution tax”), trust the organisation to allocate these funds appropriately and for the long-term benefit of industry, execute programs effectively with broad industry consultation, and be openly transparent and accountable on the progress of effective strategies to provide an acceptable return on investment for industry stakeholders (read “producers”).

How have we got here? Dissatisfaction with current cattle prices? Lack of market opportunities for producers? Power of the local supermarket duopoly? Government influence in live exports? High costs of manufacturing live cattle to beef in Australia? A high dollar when Australia had tremendous grass seasons? Poor communication from industry on industry achievements? Industry programs that underpin the supply chain for customers, but embed additional cost for producers? Centric behaviour by industry leaders, clouding beneficial decisions and outcomes? A minority of disaffected agitators pursuing a personal agenda?

Nearly three years after CCA began a review of their current representation model, there have been more twists and turns than in a World Cup final.

Unfortunately what could have provided the opportunity for real reform within CCA, and build on the good work conducted over the previous decade or more in creating an improved model for producer involvement along with the execution through MLA of progressive marketing, research and development programs within the budget constraints of a fair and equitable levy collection system, has now been knee-capped.

The public commentary has been mind-blowing.

MLA is ending producers to the wall through poor cattle prices?

MSA is letting producers down with inconsistent grading?

AusMeat is letting producers down with an inability to modernise the language and standards?

Processors are running the industry, and reaping all the rewards? Producers give them a free ride using their levy money?

MLA is letting producers down through inefficiencies, inadequate consultation, arrogance and poor management? Add insufficient communication?

RMAC is not a unified forum, cannot agree on important issues and is dominated by processors? Who needs a whole-of-industry approach anyhow?

CCA is starved for funds because MLA has the levy money? CCA is inert in providing oversight of MLA because it does not have the resources?

We have all the answers but no-one listens!

 

Pacifying the vocal minority

So to pacify the vocal minority, we are about to throw the baby out with the bath water.

Well, can someone please explain where the justification is for completely disrupting an industry that has provided, on many measures, a tangible outcome for cattle producers since 1998?

Can someone please explain why, when the cattle industry is on the cusp of potentially the greatest opportunities in over forty years, that we throw sand in the face of every established institution that industry has developed since 1998?

Do producers not want to participate in a Livestock Production Assurance scheme that provides consumers a level of satisfaction that the beef produced in Australia is safe and healthy?

Are cattle producers now looking to dismantle the National Livestock Identification Scheme that has underpinned our international reputation in all overseas markets?

Is the marvelous Meat Standards Australia eating quality assessment scheme that provides customers with the ability to select meals on the basis of price versus satisfaction going to be weakened to the extent it becomes irrelevant?

Do cattle producers want AusMeat standards and a language that only suits the production capabilities of a minority, or a truly internationally recognised set of standards that ensure that producers and processors can meet the expectations of all beef customers?

Can cattle producers set the strategy for marketing $6 billion in value of cattle on an annual basis?

Can cattle producers manage a sophisticated suite of research, development and extension programs for the continual improvement of industry?

Can cattle producers receive money directly from the collection of a transaction levy via the Commonwealth Government of the day, and yet partition funds appropriately for advocacy in ensuring governments execute policy in the best interests of the cattle industry?

How can a cost-effective model of corporate governance be established to ensure genuine accountability and transparency with a single organisation (and presumably the same people) responsible for all funds collected via the levy? Does this suggest there was no real problem with the previous AMLC model?

The reality of recent times suggests that MLA needed a good kick up the arse, encouraged to stick to their knitting, and re-focus their attention on what producers were looking for in return for their significant investment each year.

The company needed to be more visionary, establish criteria that would enable producers to understand clearly the goals for the future, execute strategy with a precise planning methodology and report to industry using measurable indicators of achievement over time.

But MLA has provided the beef industry with the horsepower to be dominant on so many issues.

Other countries around the globe envy Australia’s ability to unite producers and processors in strategies (both marketing and R&D) that provide beneficial outcomes for industry on the world stage. Industry has the responsibility of ensuring that progress is delivered in a cost effective and timely manner.

Recent initiatives suggested Cattle Council could continue on its path of evolution, moving from a convoluted, expensive formula of representing cattle producers, to a more responsive, inclusive and manageable organisation that welcomed people in to the tent – not cajouled them in by making membership compulsory through levy collection.

In providing value and benefits of membership, by engaging with small and large producers on so many levels, the organisation could establish the base for building a truly united and forceful group of like-minded producers to lead industry in the next phase of development.

The hard work at the Red Meat Advisory Council table has been paying recent dividends as industry addresses some of the “big ticket” items in association with Government. Despite the complexity and various pressure points in the beef supply chain in Australia, a whole-of-industry approach to the issues in the European Union, Indonesia, Japan, Korea and more lately China, have all provided a platform for increased market access to countries that are in love with Australian beef.

I am passionate about the beef industry. I want extraneous cost out and performance in. I want all of industry to contribute to our sustainable future in the wise management of levy dollars. I want people to contribute to industry at whatever level they can. I want leaders in industry (who divest an enormous amount of personal capital when making a contribution) to be encouraged, visionary, supported and passionate.

I do not want to re-invent the wheel every decade or so to pacify the vocal few whilst the silent majority go about their business of making money.

 

 

HAVE YOUR SAY

Your email address will not be published.

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. Philip Downie, 13/11/2014

    Interesting fact in the paper. cow beef price to US has increased 160% on last year cow prices have increased 18%, about says it all about our “industry”. I also see the need to reduce processing costs but frankly that is rubbish in respect of farmer returns the only benefit is to the processor in profits. Does anyone seriously believe that any savings developed for the processor will lead to better farm gate prices? The processors pay what they have to, they are not charities, unlike the AWB there is no obligation to maximize returns to farmers, they are either public or private companies, often international and the cheapest supply is where they will go, companies do not have any objective other than the bottom line.

  2. John Cooper, 12/11/2014

    Well,I can only say that people are still taking pot shots at each other and not addressing the real issue,IE.how is the best way to handle the levy funds and get some tangible results that will benefit the producer.I agree with the author in as much that “don’t throw the baby out with the bath water”. has some common sense to it.The MLA has a structure to handle levy monies but is in need of better direction which could come from the industry bodies if given the power to do so.I cannot see a CCA building a structure like this with the ability to satisfy all contributors .

    Now there is much talk of meat language,Ausmeat.MSA,NLIS,all with perceived deficiencies. I t seems to me that these issues can be addressed if the right structure is put in place with the power to look at the problems and address them with the help of industry.To do this the organisation will need the cooperation of processors.This happened in the late 80s after the scare of the organochloride when the Cattle Council under Maurice Binstead formed Ausmeat. Much has been achieved through this body especially in overseas markets .and if the language and specification s need revising then do so through the restructured industry body.The same applies to MSA The current specification is a far cry from what was initially introduced and the fact of some inconsistencies in grading will occur wherever subjective measurement is used.
    The NLIS certainly has some practical problems that are very annoying to producers and need attention.

    Now surely there must a structure within the industry that can be formed to help overcome the many complaints that are being aired in the above comments.There is much to be learned by cooperating with each other you get a better outcome than continuing to take pot shots.

    Many heads can mostly come up with wise decisions.
    Lets make the most of this opportunity to restructure and give considerable thought into utilising what can be used without pulling it to pieces.

  3. Rod Barrett, 12/11/2014

    Yes, a commentary from someone obviously not producing livestock for a living.
    Nor paying a compulsory levy that disappears to an unrepresentative body that is accountable to no-one.
    (Do I need mention our low returns and no representation?)
    The best being offered by the unnamed author is more of the same. “Trust us, the promised Eldorado of riches is almost within grasp of you producers of grass fed cattle”.
    Trust us (and keep sending money)
    Not likely!!
    More of the same is absolutely unacceptable!!

  4. Philip Downie, 12/11/2014

    Interesting other people have the same issue with NLIS tags must have been designed by a left hander. I want MMLA to increase the price for my cattle. Not sure this is possible with the “industry” structure which has reduced competition. Also want MLA to produce equipment that I can afford to know objectively what I am send to the processor I am sure this would benefit the whole industry. I sent ten steers to the processor, their buyer said 7 C butt 3 D butt, shows he doesn’t know much 7 D butt 3 C butt. Not much you can do and anyway their view is you should be happy, yes you missed the 15c (which they pocketed) but hey you got just more than the yards, what’s your problem!!!

    Its interesting that the processors put in $30 mill and no doubt have a much bigger say than our $54 mill and probably get more benefit. I would hope that MLA get IP returns for all this research? My view would be processors go and play with your own money somewhere else you are part of the industry in as much as you want continued supply at high enough levels to keep prices under control so you can increase profits. Another fact sent two lots of steers to processor in each lot weight variation consistent except for one which weighed about 60 kg lighter, go figure. Trust us, not bloody likely.

    As for Directors election that is just a joke that’s democracy like North Korea is a democracy and as for “skills based” I think that is an insult there are lots of farmers with these skills they are just not in the mates club.

  5. Max Dench, 12/11/2014

    The above anonymous article is fairly obviously written by someone either on the gravy train or who is part of the protected profitable sector of the beef industry, that being the processing sector. Without knowing who the author is, the article isn’t worth acknowledging as we don’t have a clue to the motivation of the author.
    Also Beef central has gone completely against their own comment policy by publishing this anonymous article.

  6. Mike Introvigne, 11/11/2014

    How can anyone think that what CCA has been dishing up, for a long time, is acceptable to any producer. No democracy when you have to be an SFO member to get a look in. MSA is being bastardised to suit processors and why, in this day and age, aren’t we being paid for carcase yield. Whoever came up with the absurd idea of placing NLIS tags in the wrong needs to be hung from the nearest tree. How can anyone accept the absurd way in which our levies are collected and not be traceable to the contributor for equitable and efficient MLA membership. It is time we got the round earth spinning instead of stagnating in a pool of self interest by those who seek to make a career out of agri-politics but have no common sense and bend to the myriad of ideas being put up as industry requirements. Lets cut the crap and as for the the unnamed author, have the balls to put your name to your opinion.

  7. Heather Wallace, 11/11/2014

    The applauders of the above article from “Mr P” have failed to point out how CCA MLA have improved the lot of the processor suppliers. Neither of these two organisations nor any SFO will ever go in to battle for the levy payer to get a fairer price or terms of trade, it is not in their charter, so what is? Putting millions into marketing meat owned by foreign companies that are minting money whilst we are receiving the lowest worldwide price for our so called traceable product. How dare the anonymous author write that he will silently go on making money while there are producers in despair. The young 17 year old lad whose family are beef producers, that gathered his sisters birth certificates to have with him when he shot himself is silent now too, only his family are not making any money, they are heartbroken. These organisations have failed miserably to look at the here and now, disband all of them.

  8. Peter McHugh, 11/11/2014

    Why am I surprised that Beef Central would print an extremely bias one sided article from a NO NAME author . I could come up with dozen of names but can assure your readers not one of them could stand up an claim they are an Australian Cattle producer who’s family has gained financially from the last 16 years of cattle levy money spent [ unless they got Grants ].
    Now the Ghost writer must be making a bucket loan of money from the cattleman of Australia and knows his standing to close to the money trough to be recognized and have any chance of claiming non bias status .
    just to help the Author understand in 1998 the MLA structure was set up with two key performance indicators.
    1 Reverse the decline in the domestic Meat consumption
    2 Reverse the decline in real cattle prices
    now it doesn’t matter how self serving the Author is he would need to be rewriting history if he believes this has been achieved at all in 16 long years .
    we now need level heads and good will for the cattle industry to succeed , with the end result achieving a rewarding farm gate price for the Australian Cattle producers.

  9. SAM staines, 11/11/2014

    Thank-you-Please lets run with this side of the argument
    For too long and too often the “noise” get their way
    Let the industry debate these matters-preferrably out of the media,excluding sentiment,perculiar,isolated claims and popularist ideals that have no truck with practicality and common sense

  10. Grant Piper, 11/11/2014

    This article is self-interested guff. AUSMEAT and MSA is being gamed by the processors to further screw the producer. Fact. NLIS delivers nothing to the producer but benefits the processor/exporters and of course the companies that make the mandatory tags that get lost everywhere and cause farmer injuries by being put into the wrong ear on the far side of the crush/race. Do you want an internationally recognised grading system? Then adopt the US one, and I’ll pay my levy $$ to employ independent government graders that ensure the farmer gets a fair go in the chiller. I know the earth is not flat, I also know when I’m being ripped off, and when attempting to induce change via the ‘proper’ channels has been a total waste of time. Time to take the baby of the teat – out with you all as well as the bathwater. Why is it that the NLIS advocates believe they can trace every beast through its life, but it is impractical to track who pays the levies and allocate votes accordingly?

  11. Eddie Johns, 11/11/2014

    My wholehearted congratulations to the author of this piece of literary common sense.

    Along with Mick Keogh words yesterday, such have been long overdue in the convoluted discussions carried out in bars, board rooms and the stockyards where little has been rightly said to justify a wholesale change to Industry representation. This gentleman’s sentiments highlight exactly what is at risk if the agitators of this proposal get their ways.

    As the author rightly states; degrees of indecision still continue after three years of exploring the best model to represent beef producers interests and it is far from settled as the bigger picture tells me, a lot of other stakeholders will be greatly affected if this gets up.

    Will the proposed new structure be any better than its predecessor which was a country mile better than the old AMLC? Unlikely it would seem and when a lot Industry disharmony could be avoided by some tweeking of the existing system in relation to the election of Directors and in the magnitude and allocation of levy funds administered by MLA, we then wouldn’t be about to throw out the baby with the bath water.

    This thinking may not placate the agitators wanting to disband the existing system but god forbid setting up a whole new one so a few can have their day in the sun.

  12. Juliane Cowan, 11/11/2014

    This commentary would be far more credible if the author would put his name to the piece. Then all could put it in far better context. Everyone in this debate has an agenda, if you can’t put your name to an opinion it suggests that your agenda may not be necessarily in the best interests of the grassfed industry.

  13. Heather Wallace, 11/11/2014

    Why is the author afraid of being named? He / She speaks of tangible outcomes, is this person referring to prices in real terms lower than 30 years ago, a tagging id system that has 36% inaccuracies, a meat grading system being rorted blatantly by processors, an industry where suppliers receive less than half of our overseas competitors. The vocal represent the majority but very few of us get a say against the might of the multi nationals and sell out SFOs.

  14. John Wigand, 11/11/2014

    We may never know who you are…but thank you finally for bringing some intelligence and reason into the current “debate”. You will no doubt stir the pot of those that still believe the earth is flat, but it is nice to see some wisdom starting to creep back into the commentary.

    Like most things in life, when you do finally sift through the spin and noise, you will eventually get to the facts, and to what the real motives are for last minute about turns and organisational marriages of convenience (i.e. CCA and ABA).

    For those who don’t subscribe to flat earth policy, now is the time we need to hear from you. Please don’t be shy, or industries and governments will be fooled into thinking those who cry the poorest, or those that shout the loudest, are somehow representative of the views of the actual majority.

    JW

  15. john carpenter, 11/11/2014

    I can count 32 question marks in this piece from an unnamed industry “stakeholder”.It seems he is long on questions but very short on facts.Any reading of the submissions to the Senate Enquiry reveals that the “vocal minority” is in fact a long suffering majority who have reached their limit and now must have radical change in order to survive.Cattle prices are totally unacceptable,unviable and uneconomic.Seven out of eight senators(the only dissenter coming from the QLD NP) agreed and concluded that cattle producers wherein crisis!.Anyone with even a small brain should be able to realise that this will have catastrophic consequences for beef production in Australia.

Get Beef Central's news headlines emailed to you -
FREE!