GRASS FED REFORM–THERE IS AN ANSWER

John CarpenterGuest post by John Carpenter – (Cattle Producer – New England, NSW)

Cattle production in Australia is dying of neglect.

Neither the LIBERALS, nor the NATIONALS nor LABOR care about the consumers of beef or the producers of cattle.

Legislation passed in 1997 (The Australian Meat and Livestock Industry Act) moved everything off  the government balance sheet and effectively gifted control of a $16 billion industry to five large corporations. Government has been able to wash its hands of its responsibilities and fob everything off as an “industry decision” or a “matter for the industry” or an “industry failure” (e.g. the 2011 live export debacle).

The resultant structure consisting of the Act, the Memorandum of Understanding, MLA, the CCA,SCA,RMAC,AMIC,AUSMEAT,AMPG,SAFEMEAT,ANIMAL HEALTH AUSTRALIA, ALEC, ALFA, the SFO’s, The Minister and the Department of Agriculture is mind boggling complex with no-one really knowing who does what to whom.

However complexity is exactly what you would expect from a centrally planned, Kremlin like command and control system which distrusts any form of free market alternative. It is also highly resistant to change, innovation, new ideas and in particular outsiders all of which represent a threat to its authority and ability to seek rents. Complexity of this magnitude cannot be fixed by reforms or tinkering because the structure is fundamentally flawed. It has to be swept away and the most effective way to do this is to repeal the Act.

Many cattle producers know that the system has duded them. Many others suspect that it has duded them but for the life of them can’t fathom the spaghetti bowl complexity of lines and boxes and arrows that define this mish-mash of an industry structure. 

Cattle producers have never been allowed to vote on the levy. The levy, paid by the Commonwealth to MLA, can only be used for marketing and research. MLA’s marketing and research has yielded no benefit to cattle producers. There is no commercial, economic or moral justification for the Commonwealth to persist with this injustice. Taxing struggling cattle producers to fund a failed organisation is repugnant to anyone who loves freedom and democracy.

The core problem is an open secret. The quality of “Aussie Beef” just isn’t good enough. The big five simply can’t resist the super profits that are to made from selling tough beef from older cattle to unwitting consumers. These cattle are purchased for very little from farmers and quoted prices are often further reduced by the application of a plethora of discounts assessed in the sole, incontestable opinion of the processor or supermarket. They are drunk on excessive market power yet the politicians, the ACCC and the Offices of Fair Trading all sit on their hands.

An exception however was Richard Torbay the former independent member for New England in the NSW parliament. He recognised the problem and had the courage to do something about it. The Torbay Act which mandated the labelling of beef by the age of the cattle it was harvested from came under a ferocious attack by members of the beef establishment and unfortunately was watered down substantially. New ideas are not welcome in this club. 

Another very recent exception is Senator Glen Sterle (LABOR W.A.)The bipartisan committee which he skilfully chaired made seven recommendations for reform which now enjoy the overwhelming support of cattle producers. Like Torbay, the Sterle recommendations are not popular with the beef establishment and are currently in the process of being carpet bombed. They will not give up their turf without a fight and cannot imagine a world in which cattle producers actually make decisions about the use of the levy.

I have no doubt that cattle producers will eventually give up on the levy, the AMLI Act will be repealed and MLA will be dissolved. In the meantime we continue to waste precious time and money after so much time and money has already been wasted.

The problem is political but the solution is simple. Trust must be restored in the minds of consumers. Buying beef has been described as a “lucky dip”. In my opinion it is more like an act of faith. The only purpose of a business enterprise is to create a customer but we seem to be doing exactly the opposite.

We need a single national beef grading system free from the influence and control of the processors and the supermarkets and focused solely on the interests of the consumer. In other words this game needs an independent umpire who is empowered by legislation to weigh, assess and grade carcases by objective standards of eating quality and yield.

Over the course of my lifetime governments have enacted reams of legislation that can be categorised as “consumer protection”. A national beef grading system would easily fall into this category and really be a no-brainer for some political party or an enterprising independent.

 

Comments

  1. Rob Wass says:

    Good post John.

    Some of your concerns were addressed in the Senate Committee’s final report but by and large even the Senate appears to not like any primary producer making a living without the Government’s permission. Politicians, of all persuasions, honestly think that to do otherwise is just purely malicious.

    Some grabs from the Senate’s final report:

    7.3 The current systems and structures which underpin the cattle industry are complex. They encompass many regulatory and technical industry issues and involve a range of peak industry associations, commercial stakeholders, industry committees, service providers and statutory authorities. The industry is made additionally complicated by vertical structures, size disparity within the producer sector, and the nature of the relationships across the industry – which is significantly fragmented. In fact, the levy systems and structures underpinning the red meat industry as a whole have become amongst of the most complex and bureaucratic in operation in Australian agriculture. In short, the current structure has ‘too many mouths to feed’.

    7.4 There are a plethora of bodies, groups, forums and committees which seek to determine how the industry is administered and the levy payer funds collected and spent. The reality is that producers find it extremely difficult, if not impossible, to navigate, let alone effectively participate in, or engage with, the industry framework. The complexities of the systems and processes that underpin the CTL have further contributed to frustrations and misunderstandings regarding respective roles and responsibilities.

    7.21 Under the new producer-owned body, levy payers would be eligible to register for membership and should be required to vote on the rate of the levy every few years. Levy payer members would also be required to vote on whether to vary the allocations of the CTL levy between AHA, NRS, marketing and R&D, with final agreement on varying the allocations achieved with ministerial support.

    And a conclusion consistent with United Stockowners restructure proposal on the basis that, if a levy must be collected, then tendering for the marketing and R&D dollar must be instigated. Nominally, and in the first instance, the overheads of any new grass-fed cattle producer corporation would be dramatically reduced given that the majority of the new board’s decision-making only requires them to not move their arses from their chairs in reviewing tender submissions.

    The Senate Committee said in that regard:

    7.9 Evidence to the committee suggested that, along with greater stakeholder engagement, there was also a need for greater contestability and competition in the allocation of R&D and marketing levy funds. In this regard, the committee notes that CCA entered into service agreements with MLA without competitive tender. According to MLA, it is not required to put contracts up for competitive tender if it has ‘cogent reasons’ not to do so. In light of concerns regarding contestability, the view was put by submitters that any reform to the current structures should provide for a more contestable system. This included the proposition that MLA no longer operate as the default service provider. The view was put that there would be greater contestability within the system if MLA was one of many service providers competing for a tender for R&D and marketing services.




Speak Your Mind

*

Hello
Copyright © 2012 Unitedstockowners.com.au All Rights Reserved | Terms of Use & Privacy Policy| WP Site Build & Design by Everyday Marketing Solutions