Grassfed 'surgery' decisions for Joyce

30 Jan, 2015 03:00 AM
We have the opportunity to put something in place that could set a precedent

WHEN Agriculture Minister Barnaby Joyce announces how he plans to address the structure of the beef industry sometime over the next few weeks, it all comes down to Recommendation One.

The first recommendation set down by the Senate inquiry into the handling of grassfed beef levies proposes that a new body be established to receive and disperse levy funds.

If that new body - codenamed “NewCorp” by those mulling over the recommendation - is established, it may not only change the game for the beef industry, but for other commodities floundering with how to manage marketing and research and development.

Much depends on how radical a surgery Mr Joyce is prepared to consider.

A mild treatment, requiring only local anaesthetic, would give Cattle Council of Australia (CCA) more funds with which to manage its affairs, and by inference, to more strongly represent grassfed cattle producers.

Deep surgery, with all the pain and recovery time associated with the process, would be a NewCorp with a board wholly elected by grassfed levy payers, in full control of the levy.

If Mr Joyce goes down the full NewCorp path, then Meat and Livestock Australia (MLA) is also likely in for another bracing dose of change, potentially far more radical than anything that current managing director Richard Norton has devised.

Deep surgery advocates

Augathella, Queensland, grazier Ashley McKay, a 71-year-old veteran campaigner for cattle industry reform who participated in the hurried December 2014 meeting that Mr Joyce called in Brisbane to discuss the Senate inquiry outcome, is an advocate for deep surgery.

“Recommendation One has to be implemented if we’re to have any chance of reforming the cattle industry,” Mr McKay said.

“If the $60 million that we contribute goes directly to NewCorp, what happens then is that MLA is dramatically changed.

“MLA becomes a service provider where they would have to put up programs that are what the cattle industry considers beneficial in order to attract that money from the corporation.”

To ensure a smooth transition to an MLA that has to tender for work, rather than being the tenderer, the proposal has all current projects managed by MLA being funded for two years.

After that, Mr McKay said, management of projects would pass to NewCorp or its appointees, who would review them in light of cattle industry priorities.

Another veteran reform advocate, J.R. McDonald, the octagenarian founder and chairman of Inverell, NSW, processor Bindaree Beef, proposes that under NewCorp, MLA be reduced to a staff of about 20 that handle issues not picked up by private enterprise, like trade access, and be given a total annual expenditure of $20 million.

On the basis of these cuts, Mr McDonald said, grassfed cattle transaction levies should be reduced to $2.50.

MLA needs to transfer to a world of “full contestability”, Mr McDonald believes.

His criticism of the service company is lengthy. It has “failed dismally” to prevent dozens of abattoirs and hundreds of butchers going out of business, stop slaughter costs from spiralling above competitors like the United States, or reverse the slow but steady decline in domestic beef consumption.

“The message is simple,” he said. “We need to lower the costs of producing beef.”

Tweaks only: Simson

Fiona Simson, president of NSW Farmers Association (NSWFA), who with husband Ed runs cattle enterprises in NSW and Queensland, tends toward the minor surgery school of thought.

The basic industry structure is functional, Mrs Simson thinks, but it needs to be opened up so that producers feel its operation is fully transparent and accountable.

“Our current policy position is that levies shouldn’t be used to fund peak industry councils. But our grassfed cattle members want transparency, accountability and outcomes, and there seems to be some agreement among the industry that we could tweak parts of the model to give producers more comfort on these issues.

“We just have to understand what both sides of the model (peak body and research and development corporation) are meant to be doing, ensure they do it transparently, and that they are adequately funded to do what we want them to do.”

If NSWFA is to present a changed policy position on use of levy funds, Mrs Simson said, “we have to be very, very clear about what that levy is going to be used for”.

But properly thought through, “we have the opportunity to put something in place that could set a precedent for other commodity groups.”

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John Hine
30/01/2015 8:26:07 AM

Yes, but people are still looking at grassfed beef as a commodity, we should be developing products, beef from specific breeds grown on nominated pasture fro specific market niches. We then need to have R&D and market research money for specific beef companies or cooperatives where the details are commercial in confidence.
30/01/2015 9:58:46 AM

Well that's fine, if Joyce wants to divert the majority of the Senate recommendations grass fed levy payers need to approach their Senators for a dissallowance motion , and do it now.
angry australian
30/01/2015 10:34:59 AM

JH, it is up to individual operators to identify niche markets we don't need an empire called MLA. If Angus, Hereford or Droughtmaster producers want to promote their product separately that should be by choice it shouldn't be forced on a producer who may not see the benefit. In the Southern states Cape Grim do a very good job of promoting their "brand" and I'm not sure that they are "assisted" by MLA. At the moment it's hard to see whether any farmer has increased profits through paying levies. Where are the increased profits from R&D or marketing? The market is still driven by supply and demand.
David Hill
30/01/2015 1:09:09 PM

Mr McDonald's comments on the service company are baffling, I not sure if it is the responsibility of MLA to stop Abattoirs and butchers from going broke, there is a service provider for processors, I would suggest he takes his complaints to them. This inquiry was into grassfed levies and how they are being administered, it seems that the majority of those paying the levy would like to have more control over how the money is spent and see a return on investment. What we need is a supply chain that can extract the maximum value from the product, and for equitable returns based on true value.
1/02/2015 2:43:24 PM

I can't see savings coming from a reorganisation of MLA. Levy payers will need someone doing the work that MLA does. Levy payers may feel like they have more say however savings may be hard to come by? On the consumption of other meats, I'm sure the pork, chicken and seafood will continue to grow their share of consumption. It is easy to criticise the effectiveness of marketing however it does not happen on its own, every sector markets and wants to grow consumption. At a time when beef prices are rising, perhaps more expenditure will be needed, not a cut?
Rob Moore
2/02/2015 4:20:10 PM

This is compulsory unionism (at present)with no say in any matter! ONLY levy payers must be allowed a say on NEWCORP. The co-contribution of Taxpayers to MLA must be redirected to fund Animal Health Aust, AQIS, biosec. and meat inspectors. No need to investigate "Language"- just get company graders - uniform and on DA payroll! Start point is REC2, REC1 should be way down list till the foundations are laid -fair square and for all to see.SFO's ,CCA-see you later, you've had your go and we know the results. Job creation should start at home- we all need a couple of staff-not mla extortion levy!
3/02/2015 8:42:23 AM

Rob, I agree. On top of everything else, a couple of months ago I had a letter from the levies revenue mob, saying that because I haven't sold any cattle in the past three years, they had cancelled my membership. I replied to their letter to remind them that didn't they know that we had been in drought for the past three years? Also that they should have phoned me and ask what was going on? I said, also if they had bothered to check, I have recently bought cattle and also new NVD and Waybill books, $80 worth because they have obsoleted the old ones. Now reinstated with an apology.
Rob Moore
4/02/2015 6:28:37 PM

Barb - I haven't sold a beast since August, 2013, either- but that was the last @ a disgusting price 460 EU Angus weaners 200kg- cleared $260 per head. 500 odd strs from the drop before made about $450 and that money is a distant memory. But, hey, there is green grass and the price is around $2.50 so we're all meant to be rolling in it! All the spruikers- I'd like to see you all live on nothing for 2 years then get less than the av wage- I'll tell you how good you have it then. MLA= av salary was about $123K for each of the 228 of them? Boss on close to 500K. Good to know where our levies are going.


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You had better check your sources ATB!
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