Thursday, November 29, 2012

Beef Industry Restructure: The Need for an Amalgamated Policy Setting and Policy Delivery Model

The following articles from the Weekly Times and Beef Central set out the current state of the debate on the industry structure issues succinctly:

"Gloom Surrounds Cattle Council" [View Here]
"Cattle Council Restructure Plan Takes Shape" [View Here]
"Support for Cattle Council" [View Here]
"ABA Responds to MLA" [View Here]

One major issue that seems to have slipped off the radar is the separation of policy setting and policy delivery under the current structure, (except perhaps the underlying gist of the ABA/David Byard's Beef Central article which queries whether the MLA may be putting a positive spin on their key performance indicators, in order to promote their own performance in the eyes of  levy payers and Government).

On the face of it the proposal for a fee for service payment to the MLA to the Cattle Council to assist the Cattle Council in overcoming its representative funding shortfall would only work if the Cattle Council receive an overpayment for the services provided.  In other words, if the Cattle Council is to carry out and provide the services on the basis of normal profit margins, the extra work would simply take up the time of the existing overworked staff or otherwise CCA would have employ additional staff to provide the services.  This would leave very little additional funds available to the Cattle Council to carry out their lobbying role with Government and their role in overseeing MLA. 

The "opt out" proposal would not only set up a precedent for every other Peak Council in every other industry to also put up their hands and seek that part of the levies paid in their industry, but adopting an "opt out" methodology rather than an  "opt in" methodology seeks to rely on levy payers forgetting to fill out the "opt out" box rather than adopting an "opt in" system which would ensure that all those that tick the box really intended that part of their levy go to the Cattle Council.

The rationale put forward for the Cattle Council claim - that they need to maintain a close policy setting relationship with the State Farmer Organisations who have an established network and an enormous equity in the CCA and have provided CCA delegates for thirty years plus - doesn't seem to be very logical.

If all directors of the Cattle Council (and/or MLA) were to be directly elected by levy payers, State Farmer Organisation delegates could stand for election and, if they do have a well established network, one would imagine that the SFA delegates would have a better-than-even chance of being elected as board members. 

The "equity" in the CCA and the provision of delegates for over thirty years is a historical point that seems to have little to do with issues of good governance and good representation for cattle producers in 2012.

David Inall goes on to say in the Beef Central article of 28 November 2012 that the Cattle Council isn't set up to be the direct recipient of the $60m annual levies.

The simple answer which is set out in the Weekly Times article is the pork industry's "Australian Pork Limited" model established in 2012 by amalgamating the pork producers Peak Council, R & D and marketing arms, with a levy-payer elected board;

The pork industry model is a simple solution that addresses both the issues of division between policy setting and policy delivery and funding for the Peak Councils.

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