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Red Meat White Paper: Producer control of grassfed levies remains key issue

James Nason, July 30, 2019

A STRONG belief that grassfed cattle producers must retain control over their levy dollars in any future red meat industry structure has been a prevailing theme of industry feedback received by Beef Central in the three weeks since the red meat Memorandum of Understanding review white paper was released.

The white paper authored by review taskforce chair Dr Jim Varghese recommended a new red meat industry structure that would form a new organisation to be called Red Meat Australia.

The new ‘super body’ would be a single voice for the Australian red meat and livestock industry, would be the single conduit for levies collected from throughout the red meat sector, and would coordinate industry public policy, social license and marketing roles.

A separate organisation would oversee all red meat industry research, and another would be formed to oversee and maintain industry standards.

The plan’s release sparked immediate reaction from a range of smaller producer groups and individual producers about a perceived lack of control grassfed producers would have over grassfed levy revenue if the recommended restructure is adopted.

Several years of industry restructure discussions amid senate inquiries and formal industry reviews have been underlined by a view that grassfed producers, despite generating the lion’s share of industry levies, do not have a proportionate say to other sectors over how their levies are spent.

Under the plan outlined in the white paper, Red Meat Australia would be overseen by an independent chair and a ‘hybrid’ board drawn from peak industry councils, and up to three new independent skills-based representatives.

A key element of producer concern voiced when the white paper was released was that grassfed producers would only have one seat on the board of the organisation controlling all levies, viewed as the opposite result to that which producers have long been seeking. (See comments from Ashley McKay below)

With three weeks now passed since the white paper was released Beef Central sought the views of the State Farm Organisations which have the largest number of paying cattle producer members.

Will Wilson

AgForce Cattle President Will Wilson said a strong and unified national voice for the red meat industry was vital for the future prosperity of grass-fed beef producers, and it was hoped the ‘super body’ proposed in RMAC’s MoU will provide that single voice for Australia’s 82,500 red meat businesses.

“It would be a major leap forward in terms of representation and advocacy for the red meat industry, and should make us more effective in influencing government policy and community attitudes,” he said.

“We expect there will be some ‘fear for the unknown’ – for example, will the ‘super body’ really provide industry with greater capacity to address current and future issues, achieve accountability and realise a return on investment for producers.

“AgForce believes it can, providing it is properly constituted.”

Mr Wilson said that ensuring the grass-fed beef industry’s relative size, long-term investment in the industry and predominance in paying levies must be reflected in its representation on NewCo1 (Red Meat Australia).

“We need people with ‘skin in the game’ representing grass-fed beef producers,” he said.

“RMAC must ensure levy-paying grass-fed beef producers are intimately involved in writing the new MoU, and make certain that it is understood and recognised by producers across Australia.”

AgForce’s view is that there still needs to be further clarification on the division of roles, responsibilities and accountabilities between:

  • NewCo1, CCA and AgForce
  • The issue of grass-fed beef producers’ representation in NewCo1, and
  • “How we can ‘waterproof’ the funding paragraph”.

He said AgForce was also pleased that feedback it had provided on the Green Paper had been included in the current proposal, specifically:

Strengthening the ‘super body’s’ research and development capability and levels of adoption,

  • The strengthening of integrity systems (including funding),
  • Accommodating growing social license challenges, and
  • Providing for flexibility to evolve the MoU to accommodate future challenges

“It is important that the trust between industry and grass-fed producers is rebuilt as the new MoU is being constructed and rolled-out with strong training and education behind it.

“This will build or change the perception of industry when it comes to our investment in NewCo1.”

New South Wales Farmers told Beef Central it welcomed the first review of the red meat industry structure in over 20 years, and saw it as an opportunity for the industry to simplify its structure and embrace a whole of supply chain collaboration as it shaped its future direction.

However it has not provided an opinion on the White Paper recommendation itself, saying it is considering the Red Meat MoU White paper and its recommendations, and will comment once it has consulted extensively with its membership.

In its submission to the MoU Green Paper NSW Farmers called for a simpler whole-of-supply-chain industry structure that is more agile, unified and responsive.

“Our response will a focus on ensuring any new structure delivers the best outcome for producers. It is critical that farmers retain control over how their levy dollars are invested.

“To ensure farmers can capture future opportunities and minimise risk, any new industry structure must facilitate more proactive responses to industry issues and offer more effective research and extension.

“These significant recommendations need to be explored further and more consultation is required before any decisions are made.”

WA Farmers livestock president David Slade questioned whether people were willing to change. “They are still developing it,” he said. “Being complicated  it remains to be seen they get something better. Are people willing to change?” he said.

Other State Farm Organisations either declined or did not respond to Beef Central’s request for their views on the red meat MoU White Paper recommendation.

Ashley McKay, a Queensland cattle producer who had an active career in agripolitics with the Cattlemen’s Union of Australia and Property Rights Australia, has submitted an opinion piece to Beef Central heavily critical of the RMAC-driven red meat MoU review process.

Mr McKay is of the view the industry must abide by the wishes of the Senate inquiry instigated in 2013 by then agriculture minister Barnaby Joyce, which recommended that the grassfed cattle industry should receive and manage its own levies and formulate its own policy.

He has accused existing industry bodies of resisting that outcome in “both subtle and profound ways”, and “paying lip service and playing games” through “road blocks, delays and obstruction to protect their power and privilege”, “certain in the knowledge that over time the Politicians would tire and lose their zeal and the establishment could return to its “tops down – command and control empire” that had run the show for some 20 years”.

He argues the red meat MoU review process is a case of industry bodies which were deemed to have failed the industry selecting their own people with their own agenda and providing restructure options that ignored the “real reform of the Senate Inquiry”.

He said the track record of industry bodies should be judged by points such as the lack of growth in Australian grassfed beef access into the EU over 20 years and losses in market share to producers from North and South America – despite Australian producers having higher compliance requirements than producers from North and South America. He also argues against the industry engaging with groups such as the World Wildlife Fund and committing to “the religion of Climate Change and Social License”.

“The cattle industry cannot give any un-elected, unaccountable group of people in society the authority to dictate the rules of how we manage our land and livestock.”

He argues that adopting the seven recommendations if the 2013-15 senate inquiry into grassfed structures and levy arrangements is the solution.

“A – We go with the powers that be who have a record of failures and simply offer a larger, flasher top-down organisation, where they take all of the cattle producers’ levies -some $60 million plus – set the policies they see fit and essentially control our destiny.

“(or) B – We go with the senate report which gives us democracy, accountability, transparency and control of our own money, future and destiny.”

 

 

 

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Comments

  1. Kerry Glasser, August 22, 2019

    I totally agree with Will Wilson and Ashley McKay . It’s time we implemented the senate recommendations . 3 years is enough time to ponder and stuff around . Time to bring democracy to Grass Roots Producers, with skin in the game, they should have and need a say in their own business.
    An independent Chair, 15 Producers from around the Country, 3 skills- based representatives and called Red Meat Australia is a sound model and gets my vote.

  2. John Carter, August 11, 2019

    I carefully read right through and was appalled at the naivety or insularity displayed– and the cascades of weasel phrases.
    It seems that the Committee don’t understand that RMAC,MLA own no livestock or meat and have no way to implement any MISP.
    Anyone who has read the MISPs and compared them with what subsequently happened in the real world would know that they are just wish lists. Sadly , where anything can be measured, they reflect an ongoing decline in the beef industry and a contraction in the lamb industry.

    MLA is a company with Articles and can’t be disbanded without a 75% vote in two classes of membership.
    Australia’s producers have switched off in disillusion and any form of producer body won’t reflect more than 10% of the people currently paying the compulsory levy.

    I don’t expect the Minister to intervene. Her predecessors deliberately left the industry to self regulate. This has resulted in the development of processing and retailing duopolies which really run the industry. The proposed three organisations continue this disaster by excluding Government bodies which have some, and should have more, regulatory power-as in the rest of the developed world

  3. Rob Atkinson, July 31, 2019

    It is hard to disagree with any of the comments already made with respect to this article. There seems to be a high level of disregard for what many grass fed levy payers want and who represents them.
    It is hard to believe that the recommendations handed down several years ago by the Senate Committee enquires have not been fulfilled. Those enquires were wide reaching, open and accessible by any producer concerned about their future. They were accessible in person around the country, they were accessible via submissions. They were conducted by Senators that had our industry at heart. Senators like Barry O’Sullivan who made it his business to understand how other countries such as the USA, managed the industry and to ensure that beef producers were fairly paid for their product.
    It is a difficult time for many producers who are struggling with prolonged drought or flood losses, but it is imperative that we understand what the white paper has in store for us.

  4. Andrew C Dunlop, July 31, 2019

    How many more decades do grass fed producers have to wait before they get what they have been asking for all this time? How many more consultants and experts will be consulted and contracted to advise who ever of what the grass fed producers have been telling them for decades? How many more people are going to clip the ticket on the way through before this is resolved?
    I think all the grass fed producers should refuse to pay the levy until this is sorted out. Unfortunately, that is probably impossible.

    Editor’s note: Reader comments received so far on the white paper, published here, are all on the negative side of the debate. As always, Beef Central also welcomes comments from readers in support of its findings.

  5. Jock Douglas, July 31, 2019

    Grassfed cattle producers are asleep at the wheel in understanding the consequences of a proposed Red Meat Australia as a ‘super body’ becoming a single voice for the Australian red meat and livestock industry. The future of our grassfed cattle producing industry and its profitability is heading to be dominated by an organisation over which they will have no control. Neither will they have control over their levy contribution – currently amounting to some 65 million dollars a year. The question is whether that great lost legion of cattle producers, that silent majority, will wake in time to avoid the oncoming tragedy.
    There is a better way and a better structure. In its submission to the RMAC MoU Review process Cattle Producers Australia offered a preferred beef industry future for Australia:
    Australian beef established as a preferred, high value food product, acknowledged for its nutritional attributes and food safety merit and backed by well-managed production systems ranging from the expansive grasslands of Australia through superior feeding and processing for delivery to satisfied customers and consumers.
    The CPA proposed structure and funding background to deliver this preferred future is:
    • Strong, truly representative advocacy bodies for each sector of the red meat industry;
    • The associated levy funded R & D corporation for each red meat industry sector to replicate the current dual company structure for processors and live exporters;
    • Strengthened MOU and legislative provisions to ensure that each of the sector peak industry councils can control and direct the expenditure of its own levies; and
    • A remodeled properly financed RMAC, controlled by peak industry sectors, to deal only with whole of red meat industry common commercial and social licence issues.

    The overall strategy in summary is to have a red meat industry with strong unified sectors adapting to win customer and consumer favour in high value markets while gaining community support for its management to address the social and environmental challenges that emerge.
    This is a better way ahead for cattle producers and for the whole red meat industry. The decision will rest with the Minister but it would be wise for her to test the will of that great number of cattle producing levy payers before furthering the unjustified ambitions of RMAC.

  6. Joanne Rea, July 31, 2019

    Almost a month after the release of the white paper there has been either no response or diffident response from the State Farm Organisations.
    This plan is the absolute antitheses of the seven recommendations made by the Grassfed Levies Inquiry which conducted one of the most comprehensive consultations the beef industry has seen.
    The document, while mentioning transparency and accountability numerous times actually offers little of either to cattle producers.
    Instead, the sub-text reads as a manual for top down leadership with “grassroots” organisations not so much listening to their members but “shaping the thinking, knowledge and behaviours of farmers”.
    If that sentence alone does not send cold shivers down your spine it ought to.
    The paper, far from overflowing with appreciation of the work that producers do, it gives the distinct impression that the beef industry would be a great industry if only it weren’t for those pesky producers who provide a good proportion of the levies and would actually like some say.

  7. Marian Joseph, July 30, 2019

    I have viewed the 57 submissions to the MOU review and could only find 1 that supported RMAC’s proposed restructure which was Sheep Producers Australia most supported well financed peak industry councils who would have control over their levies and that an RMAC like organisation would only manage issues that all sectors agreed on such as climate change or animal activism. Very concerning that any Minister would allow RMAC to lead this review. In 5.86 of the Senate Report, it states “…The committee has previously raised serious concerns about the role and representation of RMAC. Given that RMAC would be one of the organisations under review, the committee does not believe it would be the appropriate body to undertake such a review.”

  8. Paul Wright, July 30, 2019

    The RMAC MoU Review Committee proposals, if adopted, will not deliver to grass-fed cattle transaction levy payers the appropriate industry representation and influence as was clearly defined in the recommendations of a series of Senate Inquiries and other reports. These are the recommendations that should be implemented.

    The White Paper does not adequately explain how the proposed Red Meat Australia single voice for the whole red meat industry structure would or could:

    1) Resolve the inherent commercial conflicts of interest between the various sectors of the red meat industry, such as:
    o Processors wanting to buy cheap cattle and sheep and producers wanting to sell dear cattle and sheep;
    o Processors being advantaged by a ban on the live sheep and cattle export trade and the whole of the sheep and cattle production sectors being disadvantaged by the lower prices that they would receive for their livestock if live export bans were put in place;
    o Cattle producers and sheep producers competing for the largest share of the Australian domestic red meat market.
    2) Provide adequate levy-payer direction and control to each red meat industry sector over the expenditure of its levies.
    3) Provide a powerful advocacy voice that would allow each red meat industry sector to protect its legitimate commercial interests.

    The report calls for a reduction in duplication of research and development however the realities are that APMC and LiveCorp only uses a small proportion of levy funds for research to develop policy for their own processing sector, the balance goes to MLA.

    CPA recognises and supports the need for unified representation on red meat industry issues agreed upon by the various industry sectors with the sectors in control of their levies.

    Levy payer representation must be direct, democratic and transparent.

  9. David Byard, July 30, 2019

    There seems to be a strong belief that grass fed producers must retain control over the levy dollars in the future, it seems to me producers have little or no control, at this stage under the proposed structure competing interests will control the new super body in Red Meat Australia. Ag Force says a strong unified national voice was vital to the future prosperity of grass fed producers. Anybody reading the White Paper must realise this will not happen under the White Paper, as it stands. New South Wales farmers say they welcome the first review of the red meat industry structure in over 20 years. Perhaps the New South Wales farmers have failed to read the review by government bodies including ACCC and Senate, in the Senate seven recommendations were made which if adopted would have given the chance for the cattle producers to control their own levies and control own destiny.

  10. John Gunthorpe, July 30, 2019

    We agree with Ashley and are disappointed that the SFOs who did respond are seeing their declining membership and reduced relevance to our industry as being provided a life line by the RMAC White Paper.
    The proposed structure is undemocratic and not owned by the levy payers. This is totally at odds with the September 2014 recommendations of the Senate Report.
    Before writing their report, the Senate Committee toured Australia seeking the views of producers at many meetings and openly discussed the concerns of producers at these events. The White Paper adopted a different approach seeking only written submissions and mostly from those inside the RMAC tent and failed to meet with producers so they could not put their concerns to the writers of the White Paper.
    In the end the Senate Report was open and inclusive and the White Paper closed and exclusive to the views of the establishment only.
    Shame on you RMAC. You forgot about the levy payers in the process you adopted to continue your ride on the gravy train and disrespected the views of the 180,000 plus cattle producers.
    Australian Cattle Producers Council

  11. Paul Franks, July 30, 2019

    So is what we need is a board made up of directly elected individuals from sectors of the country each with the power to veto any idea the board decides to vote on?

    While that may sound absurd, it would stop the board coming up with ideas that might be good for some are bad for others.

    The role I see is the board has to rule for every producer, not the feedlots, not the abattoirs, not the tag manufacturers, not the calf producers, not the society, but everyone and all decisions they make has to be equitable and not place pointless burdens on some, so others can make more money.

    However what I will predict will happen is the status quo will remain. Producers while might not be very happy at things are not protesting in the streets, so there is little appetite to change the status quo.

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