Open Letter from a Coalition of Grass-fed Cattle Producers rejecting RMAC’s MoU Review White Paper

Below is an open letter from a Coalition of Grass-fed Cattle Producers firmly rejecting the Red Meat Advisory Council’s (RMAC) MoU Review White Paper

30th August 2019

Senator Bridget McKenzie Minister for Agriculture Australian Parliament House CANBERRA ACT

Dear Senator McKenzie,

We write to express our rejection of the proposed changes to the structure of our industry representative organisations as published in the Red Meat Advisory Council White Paper.

Your recent comments on Victorian Rural Radio are encouraging and you are to be commended for same. It is obvious we share some common grounds in regard to transparency, accountability, democratic elections and self-determination as worthy principles for the Cattle Industry.

Our Organisations represent the interests of many grass root Cattle Producers across Australia from the Gulf of Carpentaria through all the major Cattle producing areas of Queensland, New South Wales, Victoria and Tasmania.

A Democratic Levy Payer Structure

To succeed a farmer representative organisation must be –

• Owned by the levy payers;
• Electing its board democratically by all levy payers;
• Interacting directly with the levy payer members;
• Providing levy payers, the opportunity to influence direction; and
• Enabling levy payers to decide how their levies are spent on research and development and marketing.

Only when these principles and guidelines are followed will the grass roots cattle producers of Australia be truly represented by a body capable of advocating on their behalf. The RMAC White Paper is diametrically opposed to this structure.

The White Paper Fails Basic Requirements for a Successful Farmer Organisation

The changes recommended are opposed as they fail to meet the basic requirements for a farmer organisation to succeed in advocating the views of a broad-based industry group. Recently, Daniel Meade, a dairy farmer from Gippsland, spent two years investigating these requirements as a Nuffield Scholar.  His report can be found attached to the email sending this letter.

In summary, he found, for a farmer organisation to be successful, it must have –

  1. Greater focus on physical engagement rather than written.
  2. Simplified flat fee subscription structures for advocacy groups.
  3. Increase membership opportunities for all farmers and associated interested stakeholders.
  4. Provide clear opportunities for grassroots members to influence direction.
  5. Local branches/committees must remain as they are the foundation of entry engagement.
  6. Majority of authority positions to be farmers elected by farmers.
  7. Increased investment in farmer facing employees, including regionally based office staff.
  8. Employment of locally based territory field managers.
  9. Have clear farmer led objectives to explain performance and demonstrate value.

The structures proposed and procedures recommended in the RMAC White Paper are totally at odds with these guidelines and therefore is destined for failure if enacted.

White Paper Fails to Improve the Effectiveness of Levy Payer Advocacy

Again, in 2014, Mick Keogh of the Australian Farm Institute contributed to a paper titled Opportunities to Improve the Effectiveness of Australian Farmers’ Advocacy Groups.  Again, it can be found attached to the email sending this letter.

In this paper, the now Deputy Chair of the Australian Competition & Consumer Commission comments “many involved in farming or living in rural Australia believe policy-makers have become too remote from the sector, and hence make decisions in ignorance of the reality of running a farm business.”  He goes on to say: “…farmers in Australia often appear to find it almost impossible to come together and present a clear voice to government and the wider community.”

His paper examines this issue and concludes –

  • Providing attractive opportunities for local engagement appears to be a powerful way to attract and retain members and to ultimately strengthen the legitimacy of agricultural advocacy organisations.
  • Direct-membership models of national agricultural advocacy organisations are highly unlikely to be successful.
  • Initiatives to broaden membership coverage are more likely to be successful and aid long-term effectiveness if the initial focus is at those levels of the advocacy system that have a direct engagement with individual members.
  • Ultimately, the legitimacy of a membership-based advocacy organisation is derived from the relationship between the organisation and its members. This legitimacy is a valuable asset if recognised by other industry stakeholders, the general public and by government, but it relies on the continuing engagement of members.

The RMAC White Paper fails to address each of these conclusions drawn up by Mick Keogh in 2014.  Nowhere in the glossy publication produced by RMAC to argue their case do they mention grass-fed cattle producers even though they are the largest providers of levies.  The disrespect the White Paper shows to family grass-fed cattle producers is a disgrace.

The White Paper fails to explain how the proposed Red Meat Australia single voice for the whole red meat industry structure would or could –

  1. Resolve the inherent commercial conflicts of intertest between the various sectors of the red meat industry, such as –
  • processors wanting to minimise the cost of livestock and producers wanting to maximise the price they receive for their livestock;
  • processors being advantaged by a ban on the live sheep and cattle export trade and the whole of the sheep and cattle production sectors being disadvantaged by the lower prices they would receive for their livestock if live export bans were enacted; and
  • cattle producers and sheep producers competing for the largest share of the Australian domestic red meat market.
  1. Provide adequate levy-payer direction and control to each red meat industry sector over the expenditure of its levies.
  2. Provide a powerful advocacy voice that would allow each red meat industry sector to protect its legitimate commercial interests.

2014 Senate Report

Following an extensive enquiry across rural Australia, the Senate Committee produced a report recommending action be taken to return management of the industry advocacy and levies to the livestock levy payers.  They recommended in September 2014 –

Recommendation 1

7.25    The committee recommends that a producer-owned body be established by legislation. The body should have the authority to receive and disperse the research and development, as well as marketing component, of the cattle transaction levy funds. The producer-owned body should also be authorised to receive matching government research and development funds. Reforming the Cattle Council of Australia to achieve these outcomes should be examined as part of this process.

Recommendation 2

7.30    The committee recommends the establishment of a cost-effective, automated cattle transaction levy system. The system should identify levy payers against levies paid. The automated system should provide for more immediate settlement of levy fees paid and the allocation of voting entitlements. It should be subject to regular independent auditing and verification.

Recommendation 3

7.35    The committee recommends that the Primary Industries (Excise) Levies Act 1999 be amended to ensure that levies paid by processors are recognised as processor (or slaughter) levies and not as producer (or cattle transaction) levies.

Recommendation 4

7.39    The committee recommends that the Australian National Audit Office conduct an audit of the cattle transaction levy system, tracing the levy from inception and focusing on the revenue from, and expenditure of, the respective components of the levy.

Recommendation 5

7.41    The committee recommends that the Minister for Agriculture dissolve the Red Meat Advisory Council. The committee further recommends that the Minister for Agriculture establish a new system to manage and disperse earnings from the Red Meat Industry Reserve Fund, in consultation with the industry.

Recommendation 6

7.44    The committee recommends that the Minister for Agriculture revoke the status of the MLA Donor Company as an approved donor under the Australian Meat and Live-stock Industry Act 1997.

Recommendation 7

7.46    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.

The undersigned cattle producer organisations fully support the adoption of these recommendations.

A Call to Action

 It is noteworthy that the 2017 Senate Inquiry clearly stated that “It would not be appropriate for RMAC to undertake a review” of this nature.

RMAC have clearly defied that Senate finding.  They have been the main instigators of the Inquiry, selected the people to sit on the Inquiry, set out options and oversaw the process from Green Paper to White Paper to where we are now.

It is reported that less than six of the fifty plus submissions supported the preferred option.

This is a display of breathtaking audacity in absolute denial of the inherent and obvious conflict of interest element, that has tainted any claim of an independent, arm’s length Report.  No judicious person could claim that the bona fides of the Report have not been comprised as a result.  We simply can’t accept Caesar judging Caesar to promote a new Caesar.

We respectively request that you reject the RMAC White Paper and enact the 7 recommendations contained in the 2014 Senate Report.  This will ensure a successful voice for our industry and greatly improved control of the expenditure of the levies on marketing and research and development.

Sincerely,

 

Ashley McKay OAM                                                   Ernie Camp
Chairman                                                                     Chairman
Coalition of Grass-fed Cattle Levy Payers              Australian Beef Association


John Gunthorpe                                                          Joanne Rea Convenor                                                                     Chair
Australian Cattle Industry Council                        Property Rights Australia

Barry Hughes
President
Gulf Cattlemen’s Association

 

 

 

 

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