The Australian Beef Association responds to last week’s article “Industry restructure: Let’s not reinvent the wheel to pacify the ‘vocal few’” written by an ‘anonymous red meat industry stakeholder’

A recent article in Beef Central by an unidentified author suggested that we shouldn’t try to reinvent the wheel to pacify the vocal few. He goes on to suggest that cattle Council have undertaken a review on the current representation. This restructure has had more twists and turns than a world cup final. (I agree).

In contrast to a World Cup final, people have been making rules as they go along. It has been suggested that Cattle Council has been kneecapped.

The truth is that for some years cattle Council have struggled with their finances and now there is a chance to get a democratically-elected producer board that is answerable to all levy payers.

This new board with a bit of goodwill and careful management, could be in fact, a cattle Council which has finances for a full knee reconstruction, as well  as funds to do other necessary surgery.

Some people suggest that producers have not had the experience in running a company with an annual turnover of $60 million plus. Simply rubbish! A board is set up to make policy and can bring in expertise to run the financials. There are plenty of farmers (big and small) that are more than capable of making board decisions.

MLA is sending producers to the wall with poor cattle prices? This simply is rubbish as MLA is a service provider to the red meat industry and their brief is R&D and marketing.

The fact is the red meat industry must have a level playing field in which to share the wealth. This is not the situation we see now. We see predatory pricing being the accepted practice which is accepted by all. Experts tell us that for the supply chain to be successful, all sections of that chain must be cooperative and share in any profits.

MSA is letting producers down with inconsistent grading? There is no disputing MSA is inconsistent in its present form, and the system has been watered down which causes  huge problems with inconsistent product.

AusMeat is letting producers down with its inability to modernise the language and standards? To me there is no doubt AusMeat Butt Shape is used in industry without any scientific evidence to support it, but there is plenty to support the fact that it has no relevance in yield. Dentition Y,YG, YP,PR and the doozy of them all the A cipher. Anybody sitting  for an exam would be looking to get an A grade pass. Anybody playing sport or being at the top of profession are considered A grade. Why would anybody call their poorest product A?(Could it be possible that this language is set up to deceive)?

Aust Beef themselves use the A as  top of the class when they undertake audits on processing works.

‘The fact is cattle producers are paying the lion’s share of MLA funding and one could argue that they are getting the least benefits.’

Processors are running the industry and reaping all the rewards? The simple fact is grass fed producers pay in $62 million collected as a statutory transaction levy. Processors collect $18 million from a statutory levy and then pay MLA $9 million as a service provider. They can then instruct MLA on how their funding is spent, in contrast to the producers,whose money goes straight from the government collection unit into the MLA . Unlike processors, producers have no ability under the present structure to control the flow of levies.

Processors refuse to pay for MLA marketing in overseas markets whilst producers have no choice. It is interesting to note BHP don’t pay for the advertising on motor cars. MLA is very happy with the results of their advertising and point to the fact that Australia is selling record quantities of beef into overseas markets and getting record prices. It is interesting to watch 90 CL trim double in the last 12 months. All this while producers try to keep the banks away from their door because of drought and a glut of cattle which inevitably leads to low cattle prices, whilst the meat of those cattle continues to bring record prices. It is worth noting that producers are getting some of the lowest prices ever seen in Australia when you take into account the costs.

The fact is cattle producers are paying the lion’s share of MLA funding and one could argue that they are getting the least benefits. Since the recommendations of the Senate, MLA & RMAC have been very busy telling producers of their value to the industry, with MLA claiming to be a completely different organisation than they were 12 months ago, and undertaking a reshuffle of staff with many staff being shown the door.

What’s the solution? Firstly we must identify every producer that pays a five dollar levy. Then and only then we can have a Democratic election for a cattle Council producer board elected by producers for the benefit of producers. This new board would have to face all levy payers on a regular basis.

This new board could collect all the $62 million grass fed levy and then pay MLA as a service provider. This is nothing new as the processors control their own levies through  AMPC and this would empower producers to have complete control of MLA as a service provider.

This sort of thinking will naturally bring about criticism from other sections of the red meat sector which have done remarkably well out of the present arrangement and would be loath to see the present structure change.

What is required is good will and the silent majority to actually make sure that changes will result in producers getting a fair deal for their  levy dollars.