Opinion

Opinion: Running cattle industry leadership on smell of an oily rag can’t end well

James Nason, 07/12/2020

 

THE grassfed cattle industry is a major component of Australia’s $72.5 billion per year red meat industry, but is overseen by a representative and policy setting body that by comparison runs on the smell of an oily rag, with an operating budget of a just a couple of million dollars annually.

Few, if any, other bodies in Australian agriculture, and the red meat industry itself, are asked to do as much with as little as the Cattle Council of Australia.

With a staff of just six, CCA as the prescribed peak industry council for grassfed cattle producers is tasked with finding common ground in, and setting policy for, a diverse sector which comprises nearly 46,000 grassfed cattle businesses, ranging from tiny hobby farmers to massive pastoral companies, stretching across every geographic and production zone of Australia.

Added to that are the 21,902 enterprises in the mixed farming category also running cattle, as per the table below from MLA’s 2020 State of the Industry Report:

The council’s small number of staff and its voluntary directors are required to represent the industry’s interests on a multitude of issues and dozens of committees.

To fulfil their roles, directors give up time that would otherwise be devoted to running their own farming enterprise for little recompense.

Limited reimbursements are available for their travel and accommodation costs, but there a number of examples of which Beef Central is aware of board directors funding travel to attend producer events themselves, because it is outside CCA’s budget and because they believe it is vital that they attend to keep up to date with producer concerns. Some have also been known to camp in swags at the side of roads while driving through the night to attend meetings to keep costs to Cattle Council down.

Consider how that compares to representative bodies for other large industries.

Would a director of the Minerals Council of Australia for example ever be asked or required to reach into their own pocket to fulfil their duties in representing and advocating for mining industry interests?

Even within Australia’s agriculture sector, the CCA’s resourcing does not compare well with other peak councils.

Australia’s cotton sector comprises just 1500 farms, but is represented by a peak industry council with more than 20 staff.

The sugar industry, with 6000 cane farmers, is overseen by a peak representative organisation with more than 100 staff.

Nationals Senator Barry O’Sullivan often commented while chairing the Senate Rural and Regional Affairs Committee a few years ago that the peak industry council for Australia’s grassfed cattle industry should be the most powerful and revered body in Australian agriculture, given the size, geographic spread and importance of the sector it represents, and that politicians should tremble when they hear CCA representatives are on their way to see them in Parliament House.

But instead, the industry has been plagued over time by division and fragmentation, and its peak industry council limps along on a tiny budget by comparison to other industry sectors that requires it to stretch meagure funding a long way.

Most of the council’s work is unseen, performed behind the scenes and largely hidden from public view. Over time other groups have emerged also claiming to speak for Australian producers. The effect has been to create a perception of a divided industry, one that politicians have taken advantage of to play off one group against the other.

It seems inevitable that at some point soon Australian cattle producers will have to make a collective decision on what value they place on having a strong and effective leadership body and what they are willing to pay to fund it.

The need for clear and effective industry leadership has arguably never been greater. All the old issues are still there, but now industry leaders face the unprecedented challenge of also increasingly being asked to justify the industry’s very existence, as emotive campaigns opposed to meat consumption and animal agriculture agricultural work relentlessly to erode public support for the cattle and beef sector.

The industry has been focusing for more than a decade on structural reform, but ultimately the perpetual problem of how the peak industry leadership body can and should be funded must be solved, to give any new structure the chance of succeeding.

Various suggestions have been thrown up over the past decade including voluntary levies, such as the 50c/head levy proposed by NT Cattlemen’s Association president Chris Nott a few years ago, new statutory levies, membership and fee for service models and hybrids of all of the above.

There are no silver bullets, and the ideas of using levies are both fiercely supported and vehemently opposed by different industry stakeholders. The issue has been often debated but continually kicked down the road without resolution.

Over that time, the value of cattle has risen. In 2005 when the national cattle transaction levy was last increased from $3.50 per head to $5 per head, the EYCI indicator price for young cattle stood between 200c and 300c/kg. Today it is above 800c/kg, an historically high point driven by extremely tight cattle supplies and part of a cycle that will undoubtedly eventually swing lower again, but still a long way above where prices sat when the current levy rate was set.

Finding a better way to structure and fund grassfed cattle representation has been a constant focus of industry debate and leadership attention for the past decade and more. What the cost of repeated failed efforts and the energy and resources diverted away from other important issues the industry could otherwise have been dedicating time to is anyone’s guess.

Beef Central understands that discussions looking at both structural and funding solutions have been underway again behind the scenes in recent months.

Cattle Council last week issued a media release to announce it will be trialling a new policy council structure in 2021.

A major component of the change is a move from five separate policy committees to a single policy forum comprising a diverse spectrum of expertise, positions on which are currently being advertised.

The initiative is aimed at developing effective policy in a more efficient way, enabling policy on all issues to be considered and debated in a single forum, supported by the establishment of issue-specific taskforces if and as required, while reducing the significant costs that were previously involved in bringing 75 people to Canberra a number of times each year.

In the meantime, at a time when the need for an effectively-resourced industry leadership body would seem paramount, the Council’s annual budget, which has never been more than just over $2 million and reducing year-by-year, appears set to come under even more pressure in the next few years.

Its funding currently relies on a mix of sources including membership fees from State Farm Organisations, annual disbursements from the red meat industry fund via RMAC, and service fund agreements negotiated with MLA (an arrangement that has drawn some criticism in the past, based on the view it compromises the ‘master/servant relationship’ of CCA’s role as the body responsible for overseeing and directing MLA on behalf of grassfed levy payers), in addition to service agreements with Animal Health Australia and the National Residue Survey.

Finding an industry leadership funding strategy that will be supported by a majority of producers is shaping as a key issue for the industry, given the challenges it now faces, and one that appears likely to draw far more prominence in 2021.

“We’re arguing over a couple of million dollars for a multi-billion dollar industry,” is how Victorian cattle producer Leonard Vallance summed up the situation in a recent conversation with  Beef Central.

“If they want a lobby group to lobby on beef industry’s behalf, they have to fund it properly.

“Stop chasing bloody mice around and get with it.”

 

 

 

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Comments

  1. Ian McKenzie, 09/12/2020

    Over many years the CCA has not been representative of Grass fed cattle producers. The problem seems two-fold: 1 that members of CCA once elected have been unable to reach conclusive positions that allow the industry to move forward as a collective body, and 2 the council has consisted of Board Members who have not been representative of the beef producers they were supposed to represent (ie Jobs for the boys).

  2. Anton Hutchinson, 08/12/2020

    What a load of rubbish. Cattle sale levies in the tens of millions have been demanded of the beef farmers and the Cattle Council has sat on their backsides and not even looked for alternative markets and they have the temerity to say they’re underfunded. They should be sacked.

    Thanks for your comment, Anton. Worth pointing out that it is not CCA’s job to look for alternative markets for Australian beef. That responsibility is MLA’s and individual export processors’. CCA’s role is specifically to develop policy for the grassfed cattle industry. Editor

  3. John Carter, 08/12/2020

    Cattle Council doesn’t “run” anything. It has no legislative power, owns no cattle and only has one of six seats on RMAC.
    Its ineffectiveness is reflected by the continuing massive drop in State and Federal producer body membership.
    Compulsory levy payment already funds MLA, which has”expert”board members for grass fed beef and is meant to defend beef in the public arena.

    In our defence, John, the word “run” was used in the headline as a descriptor for ‘operate’ – as in “runs on the smell of an oily rag” – not for the word, ‘control.’ Editor

    • John Carter, 09/12/2020

      Fine.
      However the MLA is a company and is meant to be run by its directors, some of which are selected on grass fed expertise. In my time they took no notice of RMAC, Cattle council, MISP etc.
      This idea that a separate group representing that group will tell MLA what to do with levies is similar to the current idea of an Indigenous Group telling the Federal Government what to do. It has never and will never work.
      RMAC’s expensive exercise “A Better Red Meat Industry” put even more expense on producers as more bureaucrat positions were created. Fortunately it appears to have been forgotten.Parkinson’s Law applied.
      Unfortunately the Ministers and their Departments have continued to pass all responsibility to industry.

  4. Mike Introvigne, 07/12/2020

    I would have to agree with Leonard Vallance. The transaction levy provides more than enough funds to properly run our representative body but unfortunately in this case the tail (MLA) is wagging the dog (CCA). How a situation which is so fundamentally flawed can continue to garner any support is beyond me, even the blindest of fools can see dramatic and urgent change is required. So lets get on with it before we have nothing to debate.

  5. John Gunthorpe, 07/12/2020

    Minister Littleproud has called for a meeting of CCA and industry representatives to again consider the questions you raise in your article. It was in 2014 that the Senate Committee chaired by Senator Glenn Sterle conducted public meetings around Australia before publishing their report with 7 recommendations.

    Minister Littleproud’s Brisbane meeting will be facilitated by Brian Ramsey of Inovact Consulting, Canberra. There will be 5 people from CCA and 5 from industry. The first topic on the agenda will be funding of the new body. It can be by membership fees or levies.

    Our members support a funding model where a portion of the levies are given over to the new organisation to establish a workable structure where all levy payers have the opportunity to regularly meet with the new body to agree policy consistent with the profitable management of grass-fed cattle production. We agree with 50 cents per head as suggested by Chris Nott.

    The Senate Committee in 2014 recommended there be a cattle producer owned organisation with a system of automated collection of levies identifying the levy payers and establishing their voting entitlements as members of the new organisation.

    What is critical in establishing this new organisation is that it be democratic. All grass-fed levy payers must have the right to nominate for a position on the board of the organisation and all levy payers get a vote to select the board members. This voting should be consistent with our Australian ethos of one levy payer, one vote.

    Our understanding is Cattle Producers Australia are attending the meeting in Brisbane. Unfortunately they are unrepresentative of grass-fed cattle producers as they have few members even after making their membership free. They paid call centers to make unsolicited calls to producers to seek membership. Their model and proposed constitution is flawed.

    CCA are working on an agenda to achieve democracy in their organisation. This would require the SFOs who currently own CCA to step back from their current position and allow levy payers to own CCA and vote for board positions.

    There are currently 18 votes on the CCA board – 6 with the AgForce representative, 4 with the NSW Farmers representative, one with each representative from VFF, Tasmania, SA and NT, one for each body in WA and one with each independent director one from the north and one from the south. SFOs pay annual fees of $25,000 for each vote on the CCA board. In the past some SFOs surrendered votes on CCA because they could not afford the fees as their membership died.

    This broken system must be unwound and a democratic light released on our representative organisation for the benefit of all grass-fed cattle producers across Australia.

    We wish those attending the meeting in Brisbane every success. However, some of us attended another meeting in Brisbane in December 2013 called by the then Minister Barnaby Joyce. He made promises to restructure the peak council for grass-fed cattle producers but failed to deliver. His Implementation Committee fell apart with regular resignations of the more committed members from industry until a few lesser members went about lobbying politicians.

    Only grass-fed cattle producers can fix the structural problems in our industry. We believe we should give CCA a chance to implement their agenda and see how committed they are to returning their structure to a democratic representative body. If they are, then they will continue to receive our support. The single policy council is a good step, They need to hold regular meetings in the various beef regions to solicit producer views on industry matters. These policy proposals should then be voted on by members at an annual national meeting as was the case with the Cattlemens’ Union in the days before the current Red Meat MOU.
    Australian Cattle Industry Council

  6. Greg Campbell, 07/12/2020

    Part of the problem is a political one. A compulsorily collected levy can’t be used for political lobbying, and at times CCA may need to take an argument to Government, or into the public arena, which is counter to the Government position. With the majority of the levy stream going to MLA, MLA are confined to marketing and R&D but can’t undertake lobbying. CCA can lobby but as a result, has only very limited access to funds from the levy stream. A separate “voluntary” (perhaps opt out) CCA levy would be needed, which raises many questions around collection, representation, accountability etc.
    A wicked problem indeed.

  7. Peter McHugh, 07/12/2020

    I’m sure everyone in the leadership roles within the Cattle industry are aware of the Senate inquire in recent years , were Seven major recommendations were provided to industry .
    One being to redesign Cattle Council with funding available to the new organisation , the Senate even provided a suggestion for a name change being ” Cattle Australia ” .
    These recommendation look so good for the Australian Cattle families but concerned other parts of the industry that a senior manager on the other side of the meat industry took the name of the table by registering ” Cattle Australia ” to himself .
    I think this small act helps to explain why CCA has had a foot on it’s neck by other sectors of the industry for many year , there is a sector of the Beef Industry that is concerned with a well funded well run Cattle organisation .
    Peter McHugh

  8. Peter Vincent, 07/12/2020

    “If you pay peanuts you get monkeys”…….. true story.

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