Opinion

Positive steps underway towards new, stronger peak industry council: Rathsmann

Guest Author, 24/01/2022

John McGoverne’s appointment as Cattle Council’s Interim Chief Executive Officer will ensure we can get on with the transition to a new, stronger peak industry council by 30 June 2022.

John will step into the role from 1 February when current CEO Travis Tobin departs for personal reasons having relocated to South Australia.

After four years as Cattle Council’s Policy Director John will hit the ground running and give Cattle Council the continuity needed to ensure its important advocacy and policy work are still carried out for the benefit of our industry.

John has an in-depth understanding of our organisation and is widely respected as the best in the business in terms of agricultural policy. His appointment ensures an orderly transition of corporate and industry knowledge and skilled staff to the new peak body. John has the full support of the board and staff, ensuring stability at this critical time.

Travis dedicated much of his tenure and burned plenty of midnight oil to help create a new, united, more engaging, properly funded, and democratically elected Peak Industry Council to better represent cattle producers. He has laid the foundations for the new peak body in a staged process involving all our State Farming Organisation founding members as well as the other cattle industry groups.

Federal Agriculture Minister David Littleproud has also been pivotal to the restructure process to deliver a stronger Peak Industry Council for grassfed producers. For the last 10 years, and after numerous Senate inquiries, we now have a minister delivering outcomes for reform of the peak body, rather than just promising it.

The minister brought the industry together through a series of roundtable discussions between CCA and other cattle groups led by Cattle Producers Australia. All of these discussions were progressed in good faith with common objectives and principles, creating concepts for a new Governance framework and funding.

The foundational work and a long line of meetings over 12 months were capped off with two Grassfed Cattle Industry Leaders Forums in September and October 2021, where State Farm Organisations and all national and state level cattle groups with an interest in national representation agreed to appoint a steering committee to work through the final issues in governance architecture to implementation.

Proper funding has always been a stumbling block to reform in the grassfed industry and while the minister has made it clear access to the compulsory levy is off the table, a voluntary levy that sits alongside the statutory levy is on the table. As a first step, the industry will need to demonstrate there is a strong majority support for changing the levy to install a voluntary element. A new peak body will also be permitted to draw loans from the Red Meat Industry Fund (RMIF) during the transition period as levy arrangements take effect. The minister has also offered to contribute towards funding the necessary consultations with producers and the work of the steering committee.

Cattle Council currently operates on less than $2 million a year, which allows it to hire six staff. This budget is drawn from SFO membership fees of $400,000, service level agreements with all levy recipient bodies (the lion’s share coming from Meat & Livestock Australia), and a declining RMIF dividend. For the work Cattle Council does, and to nationally represent a 20 billion dollar grassfed industry this is quite ridiculous. If we compare this to the $290 million budget of our service provider MLA, it is clear that to do the important roles of advocacy, policy development and levy oversight the balance is not right.

Of the red meat and livestock industry PICs, Cattle Council is the most poorly resourced when considering the job at hand, and by a considerable margin. For example, the Australian Meat Industry Council, representing meat processors, has a budget of $5 million allowing it to hire four times the staff and is much better resourced to advocate for its members. AMIC also has the resources of its own $20 million capital fund.

With over 51,000 cattle production businesses across the country, the grassfed cattle industry accounts for 69 per cent of all the businesses that make up the red meat and livestock industry. As producers we need to accept that we need to fund the peak industry body we desire. Considering current cattle prices, an investment of 50 cents per beast sold, would be a drop in the ocean for producers.

Unfortunately writing submissions, creating industry policy and dealing with government departments is hardly a glamorous job but it is essential work for the continued prosperity of our beef industry. If cattle producers want high-quality representation, they need to invest in it. The long-awaited levy payer register is also under construction and the Department will have completed 12 months of cattle transaction data by September 2022 so we can identify all grassfed cattle producers.

It is these arrangements and the work led by Travis in conjunction with Cattle Producers Australia chair Paul Wright that have helped position the restructure process to this advanced stage. It is this work that will continue in an orderly manner with the Grassfed Cattle Industry Restructure Steering Committee led by Independent Chair, Andrew Macaulay.

To achieve greater unity and engagement, democratic representation is essential. Only democracy can silence critics and build greater engagement. The strength of Cattle Council in the past has been the unity of our State Farm Organisation founding members and the value they bring through their networks and branch structures with producers. SFOs have and always will be a key part of the new industry model, but the peak body cannot be united and survive on SFO contributions.

While it is ambitious, we will be able to transition to a stronger and more powerful industry council by 1 July 2022. Cattle producers have certainly waited long enough for a properly resourced, united and democratically elected Peak industry Council to meet the needs of our grassfed industry.

 

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Comments

  1. Jock Douglas, 25/01/2022

    There is an important aspect to representation which must be considered in this process of reform. Grassfed cattle producers include many large corporate and family businesses with big cattle numbers and major investment and employment. They are cattle industry specialists. There is leading innovation in production, there is expertise and involvement in value chain development, there is experience in developing export markets – and more. Having a representative structure for the grassfed cattle industry which embraces engagement of these businesses as participants in representation is needed for industry progress. A two-tiered structure does this by balancing the many producers with smaller herds and the fewer producers with bigger herds. It supports engagement of all participants. A two-tiered representative structure should be further considered by all in the industry.

    • John Gunthorpe, 27/01/2022

      Democracy is the overriding principle in electing those to represent us. These specialists stakeholders you mention are large enough and capable enough to argue their issues of concern without calling on an industry advocate for this purpose. Indeed, they do today when there is no democracy. However, we agree it is better if they are members of the new organisation as they are levy paying grass fed cattle producers.

      However Jock, your proposal was considered by the Industry Leaders Forum which I believe you attended and it was rejected when Plan 4B was selected over Plan 4A. Now the ILF included many of the producers for whom you now plead. The Northern Producers Group who have 2 nominees on the Steering Committee speak for 53 of the larger grass-fed cattle producers in Northern Australia. So these member specialists also rejected the two tiered voting process.

      Jock I trust you enjoyed your Australia Day celebrations out at the Mucka Pub. Looks like it was a good day for all who got there. However, for the benefit of all keen to see the new organisation launched, resist the CPA influencers, accept Plan 4B and the principle of one vote for each levy payer.

    • Andrew Rea, 26/01/2022

      Jock,
      There are quite a few scenarios swirling around 2 tiered systems. It would be good if you could put your proposal up so we can all have a look at it.

  2. Rod Dunbar, 25/01/2022

    “Although we had been warned by some of the greatest political thinkers of the nineteenth century, by Tocqueville and Lord Acton, that socialism means slavery, we have steadily moved in the direction of socialism.”
    ― Friedrich Hayek, The Road to Serfdom

  3. John Gunthorpe, 25/01/2022

    How dysfunctional can the SFO/CCA relationship become? Markus was “thrown under the bus” by his board and not given a position on the Steering Committee (SC) and the SC decided to have an independent secretariat rather than allow Travis continue in this role. They also appointed an independent chairman to the SC, and now CCA are paying out $12,000 a week to these two people who know none of the history of this extraordinary process.

    It was expected by those of us on the Industry Leaders Forum that the SC would work expeditiously to complete the restructure process. The last meeting of the ILF was on 12th October 2021 and little has been achieved to date. There is to be a federal election in May and a possible change in government. To have an end date after the election puts at risk all the efforts to date.

    There are members of the SC whose purpose is to stop the process and leave the SFO-owned CCA as the continuing peak council. Some SFOs do not support the restructure process again demonstrating how incestuous the SFO/CCA relationship has become.

    Given the challenges ahead and the weakness of the SC, it is likely these recalcitrant SFOs will succeed and the chance for a democratically elected advocate for our industry lost. Levy payers will again be the looser.

    Australian Cattle Industry Council

  4. Jock Douglas, 25/01/2022

    Marcus Rathsmann has accurately described a crucial turning point for the grassfed cattle industry and its members and he deserves great credit for leading the Cattle Council to this position. It is possible now to take the next steps for democratic representation of the 51,000 cattle producing businesses right across Australia who pay a $5.00 per head cattle transaction levy.

    What the grassfed cattle industry lacks is the engagement of its 51,000 members. This lack of engagement results from the lack of direct representation of levy payers. The new peak representative body, currently referred to as BIA, needs to be framed to enhance grassfed cattle producers’ engagement.
    There is a balancing act here to consider:
    The current situation, where the amount of levies per head only is the basis for voting rights, as with MLA voting, is inappropriate. This gives the big producer operatives with big numbers of cattle dominance and leaves smaller producers with little clout and therefore little interest. However, a ‘one producer-one vote’ situation for a BIA would leave the big producers largely out in the cold and is also inappropriate. Engagement of all, whether big whether small, should be the aim. This is possible through a 2-tiered structure of representation.

    The issue of funding a CattleCo through the $5.00 per head levy could possibly be resolved along these lines: $3.66 of the $5.00 levy is the levy-payers’ contribution to ‘marketing’. It is not matched with Commonwealth funding. The suggestion is that 50cents of this $3.66 be transferred to funding the new representative organisation. However that 50cent contribution is voluntary in that the levy-payer can opt out of the transfer and membership if desired. In either case the $5.00 levy remains unchanged and payable.

    • John Gunthorpe, 25/01/2022

      Jock, in the Industry Leaders Forum (ILF) there was a vote on the industry plan to be followed by the Steering Committee and included in their terms of reference. The Plan approved by the ILF was 4B. The “Plan on a Page” in the terms of reference states grass-fed cattle levy payers are the voting members of the new company. The Board of 7 elected directors are to be elected through a rigorous nomination process with directors elected by members vote. The two tier system was in Plan 4A which was rejected by the ILF. The voting is to be one man one vote, as it is in our federal election upon us shortly. Billionaires only get one vote but they can influence the outcome as demonstrated by Clive Palmer at the last federal election. It is in the interest of our large producers to have a strong body advocating for the industry. They will influence its direction through their support. Lets have no more mention of a two tier system.

  5. Andrew Rea, 24/01/2022

    The article has a couple of interesting points.
    1. Considering strong cattle prices, 50c per beast would be a drop in the ocean for producers.
    Not long ago, producers were getting 10c per pound dressed (22c a kilo) for Jap ox and 5c a pound dressed (11c a kilo) for fat cows. History has a terrible habit of repeating itself and when at the time you owe the government more per beast for probate than they are worth I think you should think about a percentage based system.
    If the minister has said taking part of the compulsory levy to fund reform is off the table and a voluntary levy is on the table, I suggest the compulsory transaction levy is off the table as well and replaced with a voluntary transaction levy.
    2. Levy paying register is under construction and to be completed by September 2022 so we can identify all grass fed levy producers.
    This puzzles me as approximately 15 months ago the NLIS data base was transferred to Amazon, a US tech giant. If the data base won’t be complete until September 2022, the data transferred to Amazon had to be incomplete, so there must be cattle that are not on the data base. What happened to paddock to plate for the Australian herd?

  6. Brad Bellinger, 24/01/2022

    Lets hope it is truly a democratic model not the 2 tiered system proposed by Cattle Producers Australia, with half the board elected by the numbers of cattle sold as votes same as with the MLA. There should be no so called skills based board placements they are just patsies for the government.

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