"Should the following recommendations be rejected or even
watered down, the committee fears that this existing goodwill, and
with it efforts to provide a viable structure for producers, will
rapidly diminish." (
my emphasis-Report
of Senate Inquiry into grassfed levies)
|
Joanne Rea |
Grassfed Cattle Levies Inquiry-Where to Now
by Joanne Rea
The Senate Inquiry
into grassfed levies was completed and reported on by early September
2014. So far only two of seven recommendations have been discussed
and an outcome presented to the Minister. All
seven recommendations can be
found
here.
Australian Meat Producers Group and Concerned Cattle Producers (AMPG/CCP) and Australian Beef Association (ABA) have publicly thrown their support behind all seven recommendations.
Our lead cattle production policy body, CCA, have not made any public
commitments either in favour of or rejecting recommendations three to
seven
There are claims
that proponents of change who are in favour of the seven Senate
recommendations are just the “rant” of a vocal minority.
The Senate
submissions and hearings themselves give the lie to these claims. The
list of genuine deficiencies in our current red meat industry
structures, as made by practising grassfed cattle producers was
eerily similar across the country. This was backed up by public
hearings in all states.
Almost 200 people or
organisations made submissions with most pointing out intransigent
problems with the current system. Many who were and still are in deep
drought or debt were under too much pressure to submit and were
relying on others to make a reasonable case.
I really don't know
what “majority” the detractors think they are speaking on behalf
of but to me it is clear that the “majority” that I see has made
their wish for change loud and clear. The Senators thought so too.
7.33 The committee notes that the current levy system was put in
place at a time when the extent of vertical integration could not
have been foreseen. The prevailing perception is that the current
structure has enabled processors to gain disproportionate influence
over the producer levy system, at the expense of grass-fed
producers who pay the greatest proportion of the levy. Indeed,
this matter, along with concerns regarding the 'undemocratic' nature
of the MLA voting system, has contributed to the loss of trust in MLA
expressed by many submitters.
Recommendation
number seven states that,
The committee recommends that the Department of Agriculture, in
consultation with the cattle industry, conduct an analysis of the
benefits, costs and consequences of introducing legislation akin to
the Packers and Stockyards Act 1921 and Livestock Mandatory Price
Reporting Act 1999.
Already there have
been some rumblings that the US Acts are huge and expensive and cost
the processing industry billions of dollars to comply with. It would
be a great shame if the process were dismissed as a result without
proper discussion of the likely benefits.
The fact is that
there are many elements to the US system and its administration that
we will not need to start from scratch with but will be able to be
accommodated in existing structures.
Modern computer
technology also means that data can be collected, transmitted and
analysed relatively easily.
Peter Weeks in the
MLA submission claims that they achieve the aims of required
transparency by just ringing the processors and asking about their
sales information, which they give voluntarily, and it only costs
about $2,000,000. (emphasis
added).
GIPSA, the body in the US which oversees the Stockyards and Packers
Act spends considerable time prosecuting, settling and fining
companies who do not pay for livestock within the prescribed period
of three days. Payment protection is a very large part of their
mandate. Although there are always a few people who want payment
within a short period to be prescribed in Australia, many of us
realise that this would put undue financial pressure on some small
processors and we roll with the punches as long as we are ultimately
paid.
As well as payment protection the agency is there ''to
assure fair competition and fair trade practices, to safeguard
farmers and ranchers...to protect consumers...and to protect members
of the livestock, meat, and poultry industries from unfair,
deceptive, unjustly discriminatory and monopolistic practices...''
We already have a body in the ACCC which is supposed to oversee these
sorts of problems. They are not very active in rural industry until
recently and they do not appear to have a great deal of expertise in
or understanding of rural industry or a price taking market. A
dedicated rural desk backed by industry specific legislation should
see a more knowledgeable approach.
GIPSA also monitors the accuracy of scales and weighing of livestock.
We already have such a body in Ausmeat. The only question is whether
we want to give it more enforcement power and how much.
GIPSA also reviews stockyard services, handling practices and
facilities. In Australia we have a plethora of codes and regulation
which covers all of that.
Once the meat is stripped from the bone it may transpire that all we
need is a bit of tightening of existing laws and very few new ones
but they need an Act of there own to be coherent and have the
appropriate monitoring in place..
We need to start informing the Minister for Agriculture what we
require from an Australian version of the Stockyards and Packers Act
which should be unique and called something else, bearing in mind
that we do not want or need a clone of the US Act but a clean sheet
of paper where we list the similar functions that we require and how
we want them implemented.
GIPSA's
Mission
is
unequivocally "To
protect fair trade Practices, financial integrity, and competitive
markets for livestock, meat, and poultry."
It is charged with:-
-
Conducting major investigations
involving fraud, unfair competition, and deceptive practices.
-
Ensuring accurate scales and
accurate weighing of livestock, meat, and poultry.
-
Monitoring market performance.
-
Carrying out the payment and
statutory trust provisions of the Poultry Producers Financial
Protection Act of 1987. Continuing certification of the "clear
title" systems
-
Reviewing stockyard services, handling practices, and
facilities.
We have no such body in Australia which is dedicated to producers
with MLA's Meat industry Strategic Plan, where it stops being a
social document, and occasionally poses as a business document,
talking about “supply chain profitability” rather than producer
profitability.
The Mandatory Price
Reporting Act requires:-
that
the information, including price and volume information, be provided
in a format that can be readily understood by producers; improves the
price and supply reporting services of the Department of Agriculture;
and encourages competition in the marketplace for livestock and
livestock products.
In the latest round
of amendments congress ordered the USDA to set up an interactive
website which covered prices and numbers for every category of
cattle, boxed beef and by-products as well as other livestock. A
sample of the website can be accessed
here
and
here. A great deal of very up to date information can be sourced
from these reports. Processors are required to submit sales once or
twice a day. Do we want this in an Australian version of the Packers
and Stockyards Act.
One of the problems
with the present market intelligence system as administered by MLA is
that the information available and its methods of presentation have
barely changed in a decade and a half. As time has moved on and the
industry has become more vertically integrated those left in the dark
have been the specialist cattle producers.
Do we need to do
better than this? The Senators have offered the opportunity. Are we
going to throw it away?