Patience needed to grow direct memberships: Cattle Council

James Nason June 23, 2014

The Cattle Council of Australia has asked Senators conducting an inquiry into grassfed cattle industry levies and structures to support five recommendations that it says can best deliver the changes cattle producers have been asking for.

After public hearings in Canberra, Broome, Katherine, Rockhampton and Albury, the inquiry returned to Canberra last Friday, where Senators put questions to representatives of the CCA, Meat & Livestock Australia, the Australian Livestock Exporters Council and the Australian Beef Association.

In a supplementary submission presented on Friday, CCA said the evidence presented to the five public hearings so far has been consistent with the feedback it received from producers during its restructure process which commenced in November 2011.

The CCA said the inquiry to date had heard a strong view that the $5/head cattle transaction levy should be maintained, and an expectation that a portion of that levy should be used to fund representation.

CCA has asked Senators to recommend that it receive $4 million/year in direct revenue from the cattle transaction levy annually.

It proposes to use those funds for “non-advocacy” work such as improved consultation with grassfed producers through forums, online tools and a national annual conference (estimated at $425,000/year), better industry management through policy committees, industry committees and expert staff and advice ($1,675,000/year), and investment in strategic policy development to resolve problems facing the industry ($2,000,000/year).

It proposes to use income from membership – both from State Farm Organisation membership fees and from the $110 direct membership fees paid by individual paying members – to fund advocacy activities, while $580,000 in annual income from the Red Meat Industry Fund would be used for strategic direction, and $253,000 would be generated from sponsorships and the Pasturefed Certification Assurance System (PCAS) revenue flows.

If it receives direct funding from the levy CCA says it would no longer require funding from service agreements with Meat & Livestock Australia, which have triggered some criticism from producers who question whether CCA can maintain its independence over MLA while also relying upon it for a hundreds of thousands of dollars in operational funding each year.

CCA told the inquiry that it does not support the view that the peak industry body should receive all of the funds generated by the grassfed levy (roughly $56m per year), believing that would impinge on its ability to provide oversight of levy expenditure and to manager broader industry affairs.

In addition to seeking a direct share of the levy, the council also asked the Senators to support four other recommendations:

That the Memorandum of Understanding between MLA and CCA be adjusted to ensure that MLA must not only consult with CCA, but must also receive approval from the prescribed body representing levy payers before it can act;

That the MLA constitution be amended to ensure appropriate representation for grassfed levy payers on the MLA board selection committee, and the ability to put forward more than one candidate per board position at each annual general meeting;

Legislative changes be made to provide more flexibility in apportioning grassfed levy funds between MLA, Animal Health Australia and the National Residue Survey (at present it is very difficult to do this and would cost in the vicinity of $350,000 to achieve);

A process or a project be undertaken to assess the various possible levy collection mechanisms available to enable individual levy payers and the volume of levy they pay to be accurately identified.

“A better resourced Cattle Council will ensure producers are properly consulted and empowered to have more control over their levy, and that MLA is efficient, focused and transparent, and that we address the major issues facing producer profitability,” Mr Ogilvie told Senators in Canberra last Friday.

Mr Ogilvie said CCA had always strived for consensus in policy issues. Groups throughout the hearings had voiced positions which were popular among “small vocal groups of producers”, but were not representative of the consensus position, he said.

In a direct challenge to the many groups which have claimed to speak for Australian cattle producers during the Senate inquiry process, CCA provided membership figures showing that CCA and its SFO affiliates represented about 19pc of the 74,477 beef businesses currently operating in Australia.

“With 19pc of industry voluntary funding representation we believe this is consistent with membership organisations throughout Australia. CCA is far more representative than any other group in the beef industry and we are the only group willing to submit our membership details for scrutiny,” CCA’s supplementary submission stated.

Control of peak industry body is in producer’s hands

CCA revealed that the number of direct members who have joined the organisation since January currently stands at 152, but has called on patience to allow that channel to grow.

One criticism of the CCA restructure has been that it continues to give more voting clout to SFOs than to individual membership-fee paying direct members. Eight board seats are currently filled by SFO appointed directors, with four seats currently set aside to be filled via a popular vote of all members.  Critics have expressed the view that a perception that the board is not fully democratically elected is a key reason why more producers have not signed up to CCA as direct members.

CCA vice president Peter Hall said the current structure was a starting point and it was intended that the level of board representation given to individual producers would increase over time, but that could only happen if more producers took the opportunity to join as direct members.

“If we can get more direct members, we will open up the board to more independent directors and reduce the number of SFO directors. That is where we want to go. We can’t get there until people become members of cattle council,” Mr Hall told the meeting.

CCA chief executive officer Jed Matz said if the council was forced to rely solely on its fledgling direct membership channel for membership fees, it would not survive.

“The SFOs make their voluntary contributions. If we took that away in one step and we only had 152 direct members joined up, we would go bankrupt,” he said.

CCA president Andrew Ogilvie said CCA is planning a major review of its structure in 2015 where it would consider if changes being called for by other industry groups were achievable.

MLA not acting as fast as it should

The subject of whether CCA’s independence over MLA had been compromised by its receipt of levy funding from MLA via service agreements was also broached at Friday’s hearing.

Asked if CCA had put pressure on MLA to act on recommendations from a critical independent review of its Livestock Production Innovation (Research and Development) unit, Mr Ogilvie agreed that MLA was “not moving as fast as we think they should”.

“We’ve recently asked that the report be fast-tracked and I think we may have finally got some people listening to it,” Mr Ogilvie said.

Asked what MLA’s reasons were for not acting quickly enough, Mr Ogilvie said that question would have to be put directly to MLA.

However, he said it was too strong a statement to say that MLA had thumbed its nose at Cattle Council. “That is too strong a statement to make, MLA doesn’t thumb its nose at its members,” Mr Ogilvie said.



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