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TAS Country : November 25th 2010
Friday, November 26, 2010 Tasmanian Country 9 Opinion MARKET FORCES: When BSE struck in the US, Australia's beef exports went from a 19 per cent share of imports to 90 per cent. MLA fails to deliver where it matters most CHEWS theFAT David Byard MEAT and Livestock Australia has just completed its annual conference in Tasmania, where according to the headlines the organisation's ''critics got roasted''. On the surface this would seem an accurate description, with a vote to wind up MLA easily defeated 85 per cent to 15 per cent. When the chairman of the Australian Beef Association got up to speak in favour of the motion, one of the points he made was that MLA in its present form was more set up for retailers and processors than the producer levy-payers. To me this is the biggest concern. When one looks at BHP, they make the steel and you don't see them paying towards the advertising of cars and other products that use steel. What we see in the meat industry is MLA taking a statuary levy of $90 million from the producers while the processors contribute $9 million -- a voluntary levy. Retailers such as independent butchers and the big supermarkets don't pay a single cent. The reason that producers pay so much is that some poor misguided MLA souls seem to believe that if the price of beef goes up at the shop counter, this would lead to better prices to the producers for their livestock at the farmgate. I have quoted ABARE figures before, and during the past decade these figures show how misguided and flawed this type of thinking is. The Sheepmeat Council of Australia's Kate Joseph is quoted as saying that MLA has played a crucial role in developing the country's prime lamb industry, with exports increasing from 14 per cent to 45 per cent of lamb production. This is the sort of garbage that people in peak councils try to feed us. How anybody can claim credit for the position the industry is in defies logic. Sheep flock numbers worldwide have dropped drastically. And Australia is no exception. The numbers have dropped in excess of 100 million during the past 20 years. How many producers can remember digging pits and shooting thousands of unwanted sheep? Because of a shortage, these same sheep today could be worth up to $100. Another industry leader spoke about Korea and how Australian beef exports had gone up from 19 per cent in Korea to 52 per cent. This is true. However, when BSE struck in the US, Australia's beef exports went from a 19 per cent share of imports to 90 per cent, and with the US moving back into Korea we are back to 52 per cent. MLA can't take the credit for the BSE crisis, and with the US moving back into Korea, how long will it be before the US muscles in on our market share? MLA says that it is not a political lobby group and it is right, at least in theory. However, it seems that it can be political when it suits. Take the supermarket inquiries in 2006-08 when MLA refused to give evidence, saying it was not their role. But the organisation had a change of mind and gave its information to the National Farmers Federation. During these same ACCC hearings, the supermarkets gave evidence that would not stand up to even basic scrutiny. It seems totally absurd that producers pay $90 million for this sort of rot. On the other hand, MLA is quite happy to give evidence to a senate inquiry on the importation of US beef into Australia. This might have suited some big retailers and processors, but I shudder to think what it would have done to Australian cattle prices. The old saying that a man can't serve two masters springs to mind. While MLA spends many millions of dollars supporting processors, the processors have a strong and well- organised lobby machine, as do the supermarkets and retailers. These organisations can work against farmers' best interests. While producers pay levies, much of which goes to research and development, who gets the biggest benefit? Do producers get a better return if robots are built for boning rooms? I think not. MLA suggests that it never forgets where the money comes from. Under the director's disclosure I read that the chief executive of Swift Australia (who is also an MLA board member) has to declare that in the past 12 months his company has received $2,423,719 primarily for research and development. Despite the overwhelming support for MLA, I really wonder how many people have voted for self-interest. It seems like appalling governance when some of the biggest processors in the country have such large voting blocs -- or to be blunt, it is like having vampire bats in charge of the blood bank. The Sheepmeat Council of Australia and the Cattle Council of Australia are funded by peak state bodies which don't have the luxury of statutory levies and are struggling to stay afloat. It is clear that some of the people in organisations such as the Cattle Council and the Sheepmeat Council can be grossly overworked and under- funded and are working with very limited resources. These are the people charged with looking after the political interests of sheep and cattle producers. When one looks at the resources the processors, retailers and supermarkets have at their fingertips, one can see what a terrible situation farmers are in. What is the answer? There is no simple solution. However, a good starting point would be for MLA to start listening and backing up farmers with evidence that has been independently gathered. And the organisation should stop relying on evidence produced by supermarkets or processors that has never been tested. Perhaps we can get processors, retailers, supermarkets and producers to pay equally towards research and development and marketing, then we could resource our cattle and sheepmeat councils so they become effective bodies. Being more responsive and communicating with those who pay the majority of levies -- the farmers -- would be a novel approach, but I am sure one that would have lasting benefits. There are many things MLA could and should do and I am sure we could all think of ways to improve the organisation. I am very concerned that the MLA board might think that all its problems may have vanished into the ether when a motion to wind up the organisation was roundly defeated. The problems are still there, larger than life, so the role for the MLA board is to recognise the problems, start communicating with levy- payers and fix the problems. To do nothing and ignore the problems shows a lack of maturity, and total contempt towards the levy payers.
November 18th 2010
December 2nd 2010