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TAS Country : September 23rd 2010
Friday, September 24, 2010 Tasmanian Country 21 Opinion More MLA spends less we get CHEWS theFAT David Byard As a levy-payer, one might remember when the MLA was first set up it had a total budget of $96 million now it has a budget of $160 million a year.' SEVERAL months ago, I attended a meeting of meat producers at Armidale. I later received a document titled Beef New Direction Strategic Plan. This included a strategy for higher prices, lower costs, and a leaner, meaner organisation structure. The plan was written by Norman Hunt a solicitor from Hunt & Partners. The plan provides a concrete solution to the challenges to the Australian beef industry and the rural and regional industries that support the beef industry. I have tried to cherry-pick some of the most interesting things from this long report. It seems that cattle prices declined by about 2 per cent per year during the '80s and early '90s. In real terms cattle prices still are more than 20 per cent below prices being paid 20 years ago. During this time, the cost of production and the government influence on costs and charges on livestock production have increased several fold. Australian agriculture policy over the past 30 years has been generally based on an autonomically rational policy. Australian livestock producers are influenced by higher interest rates and enjoy fewer subsidies than their overseas competitors. One report commissioned by Meat Livestock Australia (MLA), the Hevron Report, found that when sheep and cattle producers sold an animal one third of what they were paid for it went in costs (this excluded wool). In New Zealand costs accounted for about one sixth of revenue and in the US it was one eighth. The Hevron report came out in 2001 and since then government- influenced costs have worsened. NLIS is a good example, cattle producers have to pay $5.52 for NLIS and the MLA transaction levy has risen by $1.50 a head. Australian cattle producers pay $9.80 in levies for every beast slaughtered, while in the US it is $1 a head. Total cost of organisation expenditure in the US is $80 million while in Australia, MLA spends $160 million per year and $30 million is spent on NLIS programs. Australia slaughters 8 million cattle per year; in the US they kill 33 million per year. The total cost of the industry organisation to beef producers and the Australian taxpayer is about $20 a head, while to American producers and taxpayers the cost is about $2 a head. European, US and South American producers are heavily subsidised in various ways by governments. The Australian car industry received $6.2 billion , during the global financial crisis, but Australian farmers didn't receive any help. It is interesting to note that there are far more people employed in the rural industry than the car industry -- you can't eat cars. I wonder how much the car industry spends on lobbying governments. While the MLA consumes huge amounts of money on marketing and research and development, it is very reluctant to supply any information to the Senate or Australian Competition and Consumer Commission. The Cattle Council, the political arm of the cattle industry, has a fraction of the resources the MLA has. Cattle Council staff appear to be overworked. They are very limited in what they can do. This year the Brazilian government will provide $US54 billion to its farmers in low-interest loans. Since 1969, the number of farms in Australia has dropped by almost 28 per cent and the rural work force has dropped from 430,000 in 1967 to 360,000 in 2008. Abattoirs have shed more than 40,000 jobs in the past 30 years. Cattle prices have continued to drop in real terms and beef consumption down from 42.3kg per person per year in 1997 to 33.7kg last year. The report goes on to talk about strategies that would get the industry back on track. They range from better prices, cheaper finance and ways to increase consumption of beef. If Australians consumed an extra 2.15kg per person a year it could mean $511 million to the beef industry. MLA is very critical of anybody who has a different point of view from its own. As a levy-payer, one might remember when the MLA was first set up it had a total budget of $96 million and now it has a budget of $160 million a year. While all this has been happening, beef prices and consumption of beef have declined. Recently, I read an article about the MLA and the Australian Beef Association that asked if the MLA delivered value for money, and answered that it did. I really wonder how an unbiased writer can come to that conclusion. By any normal measure MLA is flawed beyond belief. Surely it's time the MLA came under unbiased scrutiny for the sake of the whole industry. Livestock for Sale Livestock for Sale Stud Stock for Sale Livestock Wanted GST may apply All prices quoted are GST exclusive 67 Red Angus & Red Angus x Hereford Saler cows & calves, consisting of 45 Calvers 1st & 2nd, all Red 22 Calves 3rd-6th, White faces, 1st calf dropped May 1. Rejoined Red Angus Aug 1 $1,100.00 per unit Enq: Robert Drummond 0418 132763 2 Friesian cows, just had 4th calf to Simmental, house cows, sound & quiet $900.00 Enq: Robert Drummond 0418 132763 Continued Qty Angus, Hereford, Murray Grey & 1 White Galloway bulls from $900.00 Qty yearling Jersey bulls $750.00 Enq: Mark Lamprey 0447 085208 2 Limousin bulls $1,400.00 1 Shorthorn bull $2,000.00 Qty Jersey bulls 2yrs $1,500.00 Enq: Bill Aldridge 0418 236316 Woodbourn Angus bulls from $2,000.00 Sillwood Shorthorns Shorthorn & Limousins bulls from $2,000.00 White Dorper rams from $800.00 Enq: Tim Woodham 0418 323425 Jock Gibson 0418 133595 200 BL Merino ewes & lambs Qty new season store lambs Light conditioned ewes & wethers Enq: Peter Skinner 0418 146997 Clearing Sale Terms Strictly cash or approved cheque on day of sale unless prior arrangement has been made with Rural Finance Department. All intended bidders must register prior. For full details of Clearing Sales, Wool and Livestock Market Reports visit our website www.robertsltd.com.au Hobart 6235 1444 Launceston 6337 1555 Smithton 6452 2511 Devonport 6424 8271 2049433-100924 Friday October 1 at 9.00am Account: JW & SL McNamara, Flinders Island 48 Angus heifers, PTIC 10 Black Baldy heifers, PTIC Images available www.auctionsplus.com.au Enq: Darren Grace 0429 353936 www.auctionsplus.com.au
September 16th 2010
September 30th 2010