Sweeping changes in MLA restructure announced this morning

Sheep Central, August 18, 2014

Meat & Livestock Australia says better meeting levy payer needs is the key objective in sweeping changes to the industry service delivery company announced this morning.

A reinvigoration of research, development and extension is at the core of the restructure, announced just minutes ago.

In making the announcement, MLA managing director Richard Norton said the restructure:

  • Addresses the recommendations made in the 2013 Systems Review into levy investment in on-farm R&D (a story first broken last year on Sheep Central’s sister publication, Beef Central, click here view)
  • Responds to the criticism expressed by levy payers through the Senate Inquiry process, and
  • Results in an organisation that will deliver the support and services required by industry into the future.
Richard Norton

Richard Norton

“We have listened to levy payers and industry, and today is an important step in addressing the criticisms of the past and establishing a future-looking organisation that will deliver value to the farm gate,” Mr Norton said.

He said the Systems Review gave MLA clear focus and the recommendations are now being addressed systematically.

In the first instance, it has informed MLA’s decision to reinvent the R&D investment consultation model. Existing structures will be enhanced to provide all levy payers the opportunity to have their say, through a more accessible, simplified system.

“We recognise that the NABRC structure is currently operating in a more robust fashion than its southern counterpart and that it provides a sound model from which to develop similar industry consultation in rest of the country,” Mr Norton said.

Under the new model, producers nationwide will be invited to provide input at a local level on RD&E priorities that feed into the regional RD&E investment plans.

These plans will sit with Northern Australian Beef Research Council (NABRC), a reinvigorated Southern Australia Meat Research Council (SAMRC) and a new regional group encompassing southern West Australia.

The chairs of these groups, along with representatives from peak industry councils and MLA will then develop the national RD&E investment plan which will be informed by the National RD&E Framework and the Meat Industry Strategic Plan.

“Having this level of direct consultation, on an annual cycle, will be resource-intensive, but this structure will allow true two-way engagement on the levy investment,” Mr Norton said.

He said ‘operationalising’ the new approach to industry consultation would be a high priority.

“The consultation process will be a responsibility of MLA’s On-farm Innovation and Adoption unit, which under the restructure will also include extension. This team will drive our new approach to RD&E, working with industry to identify and develop big, bold projects that address the needs of industry now and into the future, and ensuring our R&D spend is leveraged through strategic partnerships with world leading providers of R&D.”

Higher R&D priority for productivity, eating quality

Livestock productivity and eating quality will also be given increased prioritisation and an independent focus under the restructure, with the establishment of a specific Livestock Productivity unit that aims to redress the lack of productivity gains across the industry over the past decade. This business unit will include MSA, Breedplan, Sheep CRC and genetics.

“The restructure also recognises that MLA must become more transparent in communicating how Government funds and processor levies work, and demonstrate sheep and beef levies are not spent on processor initiatives,” Mr Norton said.

With the majority of growth likely out of emerging markets, the distribution of marketing resources between Australia’s mature and emerging markets will also be under discussion.

“But core to this will be the development of a more sophisticated, evidence-based approach to provide the basis for marketing strategies,” Mr Norton said.

“The strengthening of insight capability or thought leadership will mean MLA provides industry with data and analysis around consumer and retail trends, domestically and globally,” he said.

“Through improved communication of these insights across industry, MLA will assist the value chain in understanding profit drivers.”

MLA’s full efficiency and effectiveness review will be complete in coming weeks and the new structure is expected to be in operation by October.

“This review will inform decisions that will need to be taken to achieve a 10pc reduction in fixed costs – that’s $6m – over the coming 12 months,” Mr Norton said.

As part of its complete review, he said MLA wanted to acknowledge and address the perceived lack of transparency highlighted through the Senate Inquiry.

“In the first instance, we are reviewing specific requests and issues raised by levy payers through the Senate Inquiry process. We will address each of these individually.

In order to address concerns around the voting entitlement of levy paying members and transparency in how this is calculated, MLA has commenced a full assessment of the automation of levy payments to voting entitlements.

“With that information, the industry can make an informed decision around costing and implementation challenges of automated voting,” Mr Norton said.

At board level, MLA has also faced questions about the influence of different industry players and sectors within MLA on the board selection process. This morning’s statement points out that the MLA Board is skills-based and embraces corporate governance best practice.

“It is through changes to the Board selection committee that we hope to address industry concerns around influence and equity across industry,” Mr Norton said.

“It is our intent to work with industry to put forward a resolution to this year’s AGM that meets industry expectation regarding the composition of the Board selection committee.”





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