The
Dysfunctional Divide
Between
MLA Policy
Setting and Policy Delivery
Hopefully
the following comments will provide some clarification:
- under the terms of the Memorandum of
Understanding (MOU) between the red meat industry organisational
structures and the Commonwealth government, Cattle Council of Australia
(CCA), Australian Lot Feeders Association (ALFA) and the Sheepmeat Council
of Australia (SCA) are each charged with the responsibility of setting
levy expenditure policy for MLA for their sector of the red meat industry,
whilst
- MLA’s role is to be the marketing and
R&D service provider for CCA, ALFA and SCA and carry out so-called ‘willing partnership’ Joint and Core
service functions and R&D forthe Australian Meat Processing
Corporation (AMPC) and the live export levy funded corporation, LiveCorp.
So
in theory MLA have three masters, CCA, ALFA and SCA and MLAis also meant to act
co-operatively with the abattoir owners and live exporters to provide ‘willing partnership’ services to those
sectors of the industry.
There
are a number of fundamental functional problems with this structure:
- firstly, the directors of MLA have
paramount corporation legal obligations to their levy paying members which
can often conflict with their obligations to CCA, ALFA and SCA under the
terms of the MOU
- secondly, the CCA, which is the Peak
Council representing grass fed cattle levy payers, in particular is
strapped for cash and only have a budget of about $1.3 million a year and
a staff of three or four. In contrast, MLA have an annual budget of over
$170 million a year and a staff of almost 250, most of whom have degrees
in economics and marketing, science and agriculture etc
- thirdly, and consequently to the second
point above, CCA, ALFA and SCA have
to rely on the expertise of MLA staff to provide the data to allow CCA,
ALFA and SCA to make informed decisions about policy setting
- fourthly, as former Minister for
Agriculture Sen Ludwig advised the Australian Meat Processors Group (AMPG)
in the context of a discussion on the functionality of the current red
meat industry structures back in 2011“show
me the money and I’ll show you the power” or as the old proverb says “he who pays thepiper calls the tune.’’This
suggests that in practice the MLA service delivery tail may in fact be
wagging the Peak Council policy setting dog and in this regard:
-HuntBlog understands that when the live cattle export
ban debacle unfolded in 2011 the then CEO of the Cattle Council of Australia
(CCA) was left cooling his heels in the
then Minister for Agriculture Senator Ludwig’s waiting-room for a couple of
hours while Minister Ludwig discussed the Indonesian live export issue with Don
Heatley (the then chair of MLA), and
-it is a matter of public record, that as an
apparent consequence of the Indonesian live cattle export debacle experience,
when Scott Hansen subsequently assumed the position of MLA CEO he announced
that in the future MLA would stick to its knitting and simply act as a service
provider to the levy paying cattle industry and subsequently leave policy
setting and advocacy to the Peak Councils in the future.
- fifthly, anecdotally at least, the
Australian Lot Feeders Association (ALFA) and Sheepmeat Council of
Australia (SCA), who contribute far less in levies to MLA than grass fed
cattle levy payers, nevertheless in many instances have as much say and
influence over MLA policy direction as the grass fed cattle levy payer
Peak Council, CCA,
- sixthly, at least in terms of perception
if not in practice, under the current tri-partite policy setting structure
there is always the danger that MLA may be able to do “a deal” with ALFA
and SCA for their agreement to a
particular course of action which may not be supported by CCA by promising
to deliver other projects favoured by ALFA and SCA
- seventhly, the so-called ’willing partnerships’ between meat
processors and live exporters and MLA are often in practice not so willing and there is deep concern
amongst many producers that meat
processors have too much influence over the producer corporation MLA’s
activities as a consequence of
-meat processor levy contributions paid to MLA
through the AMPC and
- through transaction levies paid directly by
processors to the MLA under the 30 day ownership rule, which requires
processors to pay a $5 per head transaction levy to MLA when they slaughter their feedlot cattle.
In
sharp contrast to the MLA Peak Council policy setting and MLA policy delivery
structure, the levy funded processor corporation, AMPC, the levy funded live
export corporation, LiveCorp, the levy funded wool industry corporation,
Australian Wool Innovations, the levy funded pork industry corporation, Australian
Pork Limited and a host of other levy funded corporations, have no such policy
setting and policy delivery divisions.
Nor
are there any such divisions between policy setting and policy delivery in the
corporate world, the family farm or in HuntBlog’s law practice. We all set our
own strategy and accept responsibility for its delivery and hire the expertise
necessary to deliver the desired outcome.This allows us to amend and reappraise
our original strategy if costs start to blow out, circumstances change or it
appears that we may not achieve the outcome that we had originally planned.
Further,
and to some more importantly, the convoluted MLA structure, with its separate
tripartite Peak Councilscharged with the responsibility of setting policy and directing
a separately governed MLA to deliver the policy outcomes has in practice led to
levy payers feeling disenfranchised because there is no easy way for direct
levy payer election of a workable board of a corporation that represents three
disparate and competing sectors of the red meat industry, namely, grass fed
cattle producers, sheep meat producers and lot feeders.
Conversely,
once again, there are no such impediments in the structures of the levy funded
processor corporation, AMPC, the levy funded live export corporation, LiveCorp,
the levy funded wool industry corporation, Australian Wool Innovations, the
levy funded pork industry corporation Australian Pork Limited and a host of
other rural industry levy funded corporations who have no division between
policy setting and delivery and whose boards are all wholly or partially
elected by their levy payers.
Submissions
to the grass fed cattle levy Senate inquiry have to be lodged prior to 1 March
2014, so if you have not already done so please lodge your submission as soon
as you can. Information on the background to the calling of the grass fed
cattle levy Senate inquiry, the process on how to lodge a submission and a pro
forma electronic questionnaire submission can be found at http://www.cattlelevysenateinquiryinformation.com/ and further information on
issues pertinent to the grass fed cattle levy Senate enquiry can be found at www.huntblog.com.au
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