Bold options to reset red meat industry

Bold options to reset red meat industry

Beef News

New body Food Protein Australia an option in MoU review.


A COMPLETE reset of the red meat industry’s structure with a future-focussed body called Food Protein Australia at the helm is one of the bolder proposals to come out of a governance review.

The taskforce driving the overhaul of the Memorandum of Understanding, which was put in place 20 years ago to define the roles and funding of red meat bodies, has just released a Green Paper for national consultation.

It outlines four options for potential reform. Two involve consigning the overarching industry body and the instigator of the review, the Red Meat Advisory Council, to history.

The four options are: incremental change to the status quo, law of the jungle, a hybrid model and a revitalised red meat industry led by the new organisation.

Lead reviewer and task force chair Jim Varghese said the process so far had clearly detected a real appetite for change, either by strengthening the existing arrangements or identifying new governance arrangements.

“It is rare to get an industry prepared to look at how it might move ahead and unlock potential, where it is not in crisis and forced to do so,” he said.

DRIVING FORCE: The Red Meat Reform Taskforce - Paul Lucas, Dr Michael Morgan, Jane Kellock, Will Barton, Jim Varghese, Stacey Wordsworth, Kara Knudsen, Troy Setter, Bruce Taylor and Gary Burridge. Absent: Fiona Nash.

DRIVING FORCE: The Red Meat Reform Taskforce - Paul Lucas, Dr Michael Morgan, Jane Kellock, Will Barton, Jim Varghese, Stacey Wordsworth, Kara Knudsen, Troy Setter, Bruce Taylor and Gary Burridge. Absent: Fiona Nash.

The nine-member skills-based taskforce identified a number of ‘wants’ where there was wide stakeholder agreement: a unified voice for industry, overall alignment on key issues, improved advocacy, more agile and easily understood governance and greater recognition of the contribution red met businesses make were the key ones.

Inclusive and representative industry bodies was also a must.

What they don’t want is duplication of services and financial resources, unnecessary government intervention, one sector to dominate others or a system that rewards complacency or drives division between sectors.

Discussion of the fourth option, which could be described as wholesale reform, pointed to it being the pathway to transcending existing barriers within the supply chain.

Food Protein Australia was depicted as an organisation attracting thought leadership, skill-based governance and the use of new technology to stay connected to all members of the chain.

The Green Paper acknowledged this option may lead to flux and industry fragmentation and it may take five or more years to dismantle current structures and build the new architecture.

It could also be perceived as a takeover by one industry group.

It does, however, factor in the idea changes might happen which we can’t even think of now, Mr Varghese said.

The option to simply refine the MOU and make piecemeal reforms would be about building on the achievements of the past 20 years, Mr Varghese explained.

The “law of the jungle” scenario was where an MOU and RMAC was no longer required. The remaining organisations compete for existing funding.

“This is a completely and entirely market based option. In this instance you’d still have to address the same issues but that would occur in a deregulated model,” Mr Varghese said.

The hybrid model is about merging the functions of service providers and peak industry councils with access to levy funds and representation shared between organisations.

It would demand agreement that changes would need to be made to institutional arrangements and may have to be done over a five-year timeframe or more to ensure that consensus emerges, according to Green Paper discussion.

Mr Varghese said there may well be a fifth option to emerge as the consultation period progresses.

While the red meat industry today is a leading contributor to gross domestic product, export dollars and employment, and is now the largest trade exposed portion of the manufacturing sector, things had changed significantly since the MoU was first put in place, he said.

The industry’s social licence to operate has been challenged by growing concerns around  issues such as animal welfare and the potential environmental impacts of the industry.

The lotfeeding sector has grown, the retail sector has been heavily concentrated, the number of processors has contracted, and consumer preferences have changed significantly.

Export markets have become more numerous, complex, demanding and subject to uncertainty outside of the industry’s control.

And then there is the emergence of big disruptors like cultured meat.

All these dynamic changes, Mr Varghese explained, build a strong argument for a refreshed governance framework capable of meeting unprecedented challenges and opportunities ahead.

“I’m encouraged this industry is forward-looking and embracing change. Despite the fact there is diversity and differences in opinion along the supply chain, they have come forward with options,” he said,

RMAC chair Don Mackay backed the call for bold and ambitious reform.

“Our industry has achieved an enormous amount and we want it to keep on growing. Our duty is to ensure 20-year-olds entering the industry now, as businesspeople or employees, have a capable, streamlined and high performing industry over the next 30 years,” he said.

“Good governance with clear roles and responsibilities is important in any organisation. In an industry as diverse as ours with 82,000 businesses right along the supply chain, it is critical.”

Comments will be taken until March 14.

After that, the taskforce will take the feedback to refine its findings and make it’s recommendations for reform.


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