Tuesday, April 9, 2013

BEEF 2015 & BEYOND - CATTLE COUNCIL STRUCTURAL REFORM


For the last 18 months the Cattle Council of Australia has been struggling to find a solution for its funding needs and the need to develop a reformed structural model to deliver  long term sustainable national representation for Australian grass fed producers.
 
To this end the Cattle Council has engaged in industry-wide consultation, published a series of discussion papers, and has now set up yet another working committee to try and find an answer to its funding and representation problem.

Meanwhile the broader industry has been engaged in ongoing stakeholder and government discussions about industry structural roles, particularly those of MLA, RMAC and the other Peak Councils in the context of continuing and significant falls in real cattle prices and producer profitability

Beef 2015 & Beyond

The Cattle Council’s latest publication, Beef 2015 & Beyond identifies 21 strategic imperatives under the themes of leadership and capacity, communication and engagement, market access and trade development, best management practice and knowledge and innovation. 

Beef 2015 & Beyond calls for a new grass fed representative structure:

·       speaking with one voice;

·       delivering a more inclusive, well resourced and accountable model for grass fed beef producers;

·       that reprioritises its resources and increases its capacity to undertake economic and policy analysis and stakeholder communication and industry administration; and

·       which includes the ability to provide a mechanism for direct communication and engagement with grass fed levy payers, government and consumers.

The 21 strategic industry imperatives identified by Beef 2015 & Beyond include:

·       the development and implementation of a new powerful, coordinated representative model that can deliver suitably funded advocacy strategies to influence government, the community and the value chain;

·       the establishment of a comprehensive autonomous policy analysis capacity within the production sectors of representative organisations;

·       the development and implementation of mechanisms to allow levy payers to participate in policy development;

·       the need to increase market share in established domestic and export markets;

·       the need to stimulate domestic demand for beef and/or grass fed beef specifically and reverse the long term decline of domestic consumption of beef;

·       the need to define and drive implementation of best management practice programs; and

·       the need for an  improved return from  R&D  investment and marketing services provided by levy funded industry service providers

Restructure Models

The restructure models considered or put forward by the Cattle Council thus far include:

·       a proposal that the board of the new corporation be made up of State Farmer Organisation representatives and directly elected representatives, elected either through:

¾    a State based electoral system; or

¾    a zonal voting system which would  balance the interests of both the northern and southern producers

·       proposals that  Cattle Council policy development and advocacy funding be obtained from:

¾    an opt-out portion of the MLA marketing levy; and/or

¾    a $750,000 per year contract for services “arrangements” with the MLA; and/or

¾     a “buy your vote” system where a company or individual would secure more votes or representation on the Cattle Council if they paid a higher membership fee.

One Stop Shop Solution

As previously reported in the Rural Press and Beef Central, some of the largest players in the Cattle Industry have suggested an alternative one stop shop solution that would combine the policy setting and policy delivery arms of the current structure to create a grass fed Cattle Council Corporation under the one roof .

Such a Cattle Council Corporation would receive all grass fed levies, set policies, carry out advocacy and deliver marketing and R&D outcomes for its grass fed levy-paying producer members who would be able to directly elect the new Cattle Council Corporation’s board and vote on major decisions.

The result would be a well funded Cattle Council Corporation capable of delivering well researched policy advice for the industry and the government, formulating effective and timely industry policies, whilst developing and monitoring the 21 strategic imperatives and providing appropriate direction for levy expenditure with knowledge and conviction and active representation of beef producer’s interests in accord with the industry needs identified in Beef 2015 & Beyond.

The interests of the large and small producers could be protected and balanced through a two-tiered voting entitlement process, with one register based on one-man-one-vote and the other register based on the amount of levies paid, so that the larger producers would elect half the board and the smaller producers the other half with significant major decisions requiring a majority vote in favour in both registers.  A two-tiered voting entitlement process which would effectively balance the interests of the large northern cattle producers and the interests of cattlemen in the south with smaller herds.

Representatives of the Cattle Council, the various State Farm Organisations and members of associations such as the Northern Territory Cattlemen’s Association, Australian Beef Association and Regional Beef Associations would all be able to nominate for election as board members of the new Corporation and with the support of their organisations would be duly elected.

One stop shop policy setting and delivery services corporations or variations thereof have been adopted by and are working successfully in a number of other rural industries including the pork, wool and egg industries.

It is difficult to see that the one stop shop model would not provide the best structure to deliver the 21 strategic imperatives set out in Beef 2015 and Beyond as a national strategy for the Australian grass fed beef sector.

A one stop shop structure combining policy development advocacy and service delivery would be well funded, would allow the grass fed producers to speak with one voice, would allow levy payers to participate in policy development through direct election and would rectify the current dysfunctional divide between policy setting and policy delivery that has been frustrating the industry over the last decade under the current structure.

The one stop shop policy setting and service delivery Cattle Council Corporation has the support of some of Australia’s largest industry players as well as many medium and small producers.

A one stop shop Cattle Council Corporation funded by grass fed levies in the order of $56 million dollars with matching government funding for the R&D portion and a board elected by every grass fed levy payer in Australia would almost by definition become one of the most powerful and influential rural industry Peak Councils in Australia.

One Stop Shop Objections

Thus far the only public objections to the proposed one stop shop model have been that:

·       the Cattle Council was founded by State Farm Organisations when it was formed in the 1970’s, and SFO’s must therefore retain ultimate control over any grass fed cattle Peak Council;

·       the Cattle Council as currently constituted is not capable of managing the $56M of levy funds currently collected from grass fed cattle producers; and

·       the pork industry has a one stop shop model and it has been decimated by the flood of imports from Canada since the lifting of quarantine restrictions in the 1990’s.

None of these objections appear to have much merit.

A State Farmer Organisation structure that may have been appropriate in the 1970’s when the Cattle Council was formed (at a time when SFO’s had much higher membership and consequent funding than they do now) appears to have little relevance from a functional and funding perspective in the 21st century.

A combined Cattle Council policy, marketing and R&D delivery Corporation with a board directly elected by every grass fed levy payer in Australia would effectively replace the MLA as far as grass fed cattle producers were concerned and the new Corporation would be able to hire the best service delivery personnel and management expertise in Australia.

Australian Pork Limited, the one stop shop policy setting, advocacy, marketing and R&D representative body for the Pork Industry, was established in this century in response to the lifting of the quarantine restrictions on imported pork in the 1990’s which devastated the Australian pork industry.

Open Challenge

If there are other problems with the proposed one stop shop policy setting and service model that would render it dysfunctional or inhibit its ability to deliver on the strategic imperatives identified in Beef 2015 & Beyond, then those problems should be aired publicly for all grass fed producer levy payers to consider.

Otherwise the proposed one stop shop policy setting and service delivery model should be put squarely on the table as an option for active consideration by industry and government.


To read more on this issue, see the following article posted on KAP Leader and Federal Member for Kennedy Bob Katter's website - 'Çrisis summit called as cattle industry reaches breaking point'.

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