Senators leading an inquiry into the red meat industry have expressed frustration at the lack of progress in long-running efforts to create a single, powerful body to represent levy-paying grassfed cattle producers across Australia.
The sheer scale of Australia’s grassfed cattle industry means its peak council should be one of the most powerful rural groups striding the halls of power in Canberra, Senator Barry O’Sullivan has often stated.
It should be so powerful that Government members and MLA staff should “break out in a sweat” when they hear that its representatives are in a lift on their way up to see them, the Senator said.
At a Senate committee hearing with Meat & Livestock Australia in Canberra on Tuesday, LNP Senator O’Sullivan and Labor Senator Glenn Sterle commented that the peak industry council, Cattle Council of Australia, is not representative of all producers in its current form.
The prevailing view was the existing council historically represents “the eight men at the table and little else”, is poorly funded and “not able to amass the members to come and demonstrate out the front of the MLA or the agricultural minister’s office”.
After several years of closely scrutinising the industry through successive Senate inquiries Senator O’Sullivan said he has still seen no sign that progress is being made.
“They have been at this for 14 months. And I am not blaming the individuals, I think there has been a tremendous effort, chair (Howard) Smith and there are some really hard working people involved here.
‘It’s like watching paint dry’
“But we’re not making progress, it is like watching paint dry.
“We have had an implementation committee that I think is about to blow out a candle.
“.. I am not critical of anyone on Cattle Council, they are decent fellas and they are battling away with very little.”
Senator O’Sullivan said no one has yet come up with a funding plan for the organisation.
“We have got to come up with a plan to allow these people to progress an organisation to become this aggressive representative body, and there is no plan.”
“I am of the view that until we get a very powerful advocacy body for producers, well funded, well structured with a genuine claim to grassroots engagement from tens of thousands of producers then we are going to continue to have the strong people in the industry fill the space and that won’t always be in the interests of the grassroots producers.
“If we had a powerful advocacy body around cattle producers we would not be in this room today let alone agonizing over what happens next with the structure.”
The comments reflected an apparent level of concern within the Senate Committee that until producer representation is strengthened, other sectors will continue to have inequitable power, and any recommendations the committee makes are unlikely to succeed.
‘All is not rosy in red meat industry’
Senator O’Sullivan said some people had told the committee that everything in the red meat industry in the past 18 months had been “rosy and progressive”, and said others had suggested that all industry R&D activities be consolidated into one place for easier management and decision making and better government supervision.
In reply MLA managing director Richard Norton agreed that “everything was not rosy in the red meat industry”.
High costs of production – more specifically the high costs of processing – and currency were “killing us in global market”.
At farm level Australian beef production was the most efficient in the world. But by time the product reached the shelf, it was the most expensive in world.
Increasing energy costs for the processing sector could not be passed on to the consumer so were passed back to the producer.
“To address that I have asked the question which entity across the RDCs has worked over the last decade to reduce the cost of production, particularly in the processing sector, with innovation such as what we are talking about today,” he said.
“Not only providing transparency through the processing sector, but applying objective measures so the producers know what they are producing.
“DEXA is just one piece in the jigsaw puzzle, a very big piece, to providing producers with objective measurement.
“We are here in this process talking about changing the way producers get paid in the future, not the current averaging system.”
“If we don’t look at innovative ways to reduce the cost of processing red meat in this country, we are going to have a situation (where) perhaps all of that manufacturing goes offshore, where the carcase is just cut up here in Australia and fore quartered, and then sent overseas and processed.
“We don’t want to see that because there is so much opportunity to value add Australian products in Australia and continue processing here in Australia.”
On representative industry structures, Mr Norton said the point of view of MLA’s Board was that strong and effective peak industry councils were good for the whole industry.
Skills-based boards “the holy grail”
He said skills-based boards were the holy grail of any structure that may be considered in future.
“A skills based board gives clear instructions to the executive of MLA that the prosperity of the red meat industry depends on the whole value chain working together driving innovation, driving down cost of production and ensuring that the product we send to the end market is not over priced compared to our global competitors.”
He added that MLA had responded to industry concerns in recent years.
“Since the grassfed inquiry, we have changed the DNA of MLA,” he said.
“It has become a lot more of an organisation with structure that listens to levy payers and has set up structures so levy payers influence how levy dollars are spent.
“That structure is working quite well.”
“MLA has transformed itself to not sit behind a desk in North Sydney. I am up to about 20,000 levy payers I have been in front of in three years.
“But even with a strong advocacy body, Senator, I don’t think MLA should ever walk away from standing in front of levy payers and being accountable.
“In my opinion, value chains work best when the whole value chain is working on strategic plans with KPIs and MLA as a service provider is accountable for delivering those KPIs.”
Service agreements to focus on skills training
Mr Norton said that when producers became voluntary industry representatives they were being asked, without an enormous amount of training, to talk to media and politicians at a level that may be beyond their capabilities.
He said delivering this training would be a core focus of a new service level agreement being finalised MLA and CCA, which will see CCA receive about $1.9 million to deliver projects and consultation committees for MLA.
“Within that agreement is a project, just like with any service provider, around delivering company directors courses, social media courses, helping with policy development courses, corporate governance courses.”
LPA changes will facilitate new grassfed database
He said MLA was also investigating whether direct elections for a new grassfed industry representative structure could be held around the MLA AGMs to streamline the process.
Within a few years, as producers around Australia recommit to the Livestock Production Assurance process, all levy payers and the amount of levies they pay will be able to be identified, which will ensure an accurate, auditable vote not only for MLA procedures, but also for industry representation.
Earlier in the hearing Senate Bridget McKenzie questioned whether MLA had been working actively to implement recommendations made by the ACCC in its beef and cattle market study, while Senator O’Sullivan focused on how DEXA machines would be calibrated, and how frequently to ensure fair, objective and independent measurement of every carcase.