Clock running for red meat sector to get reform happening

Nationals Senator for Victoria Bridget McKenzie says the beef industry has 24 months to restructure its producer representation bodies – or the government will do it for them.

Senator McKenzie outlined the timeline when she visited the Northern Victoria Livestock Exchange, Barnawartha, on Friday to share with North East beef producers the final report into the effect of market consolidation on the red meat processing sector.

The Senate Rural and Regional Affairs and Transport References Committee inquiry lasted two years and made seven recommendations to help bring transparency to the sector.

“There’s a lot of big players in the beef industry who are not happy about this report, not happy about the ACCC inquiry into the beef industry, but we don’t back away from wanting a competitive industry for our farmers, one that is transparent and accountable,” Senator McKenzie said.

“I would call on all the peak industry councils to get on board to ensure our farmers get a fair go for their cattle.

“What we could do is have a mandatory code, that’s not my preferred option, I think this needs to be an industry-led solution … the ball is industry’s corner and I would back them to the hilt to implement these recommendations but if they don’t the option is a mandatory code.”

The committee recommended:

Recommendation 1

  • The committee recommends that the Minister for Agriculture and Water Resources consider requesting Meat and Livestock Australia to conduct a study into pre- and post-sale weighing to provide the southern industry with an evidence-base on which to consider selling methods at saleyards.

Recommendation 2

  • The committee recommends that the Australian Livestock and Property Agents Association (ALPA) lead the development of industry Standards of Practice that cover all commercial transactions in relation to livestock – including online, paddock and saleyard transactions. The Standards of Practice should include guidelines which encourage all parties to conduct transactions in good faith, do not mislead other parties, and ensure that all such transactions are negotiated under the law.

Recommendation 3

  • The committee recommends that the Department of Agriculture and Water Resources conduct a review into the operations and capability of AUS-MEAT to determine whether it is the most appropriate body to oversight the installation, inspection, calibration, replacement and quality assurance auditing processes of the new DEXA technology. The review should also identify what reforms and resources AUS-MEAT would require to fulfil this role.

Recommendation 4

  • The committee recommends that the Australian Government provide immediate support, including appropriate financial assistance, to the grass-fed cattle sector in its efforts to replace Cattle Council of Australia with a transparent and accountable producer-owned body as the sector's Peak Industry Council.

Recommendation 5

  • The committee recommends that the Australian Government officially recognise Cattle Australia as the grass-fed cattle sector's Peak Industry Council under the Australian Meat and Live-Stock Industry Act 1997 and Red Meat Memorandum of Understanding once it is operational and has a membership structure in place.

Recommendation 6

  • The committee recommends that a joint industry and government meat and livestock task force be established to conduct a comprehensive review of all aspects of the Red Meat Memorandum of Understanding (MOU).

Recommendation 7

  • As part of the Red Meat MOU review, the joint industry and government meat and livestock task force should consult widely across the industry and consider options for reform. The task force should present a report to the Minister for Agriculture and Water Resources within two years of its establishment. The report and its recommendations should be made public.To ensure full transparency and encourage industry ownership over the reform process, the task force should endeavour to publish its preliminary findings during the review period as well as bi-annually.

The report was welcomed by North East producers, who were highlighted in the report for their stand at Barnawartha.

“It’s very positive, they really do recognize a lot of problems and that we need a new, independent, Cattle Australia, which is happening,” said Loretta Carroll, from the VFF Ovens Valley branch.

Wangaratta and District branch secretary Greg Mirabella said the beef industry was made up of thousands of small producers, but until now had been dominated by a handful of big players and welcomed recommendations to address that imbalance. Benalla producer Maureen Cottam was happy with the recommendations. 

“At the moment, I and thousands of other Victorians producing good cattle are not really represented at the top,” she said.

We don’t back away from wanting a competitive industry for our farmers, one that is transparent and accountable

Nationals Senator for Victoria Bridget McKenzie

The Cattle Council, not surprisingly, dismissed the Senate Inquiry report.

"It defies logic. It's a nonsense," Cattle Council president Howard Smith told ABC radio.

"If they have evidence to support there was collusion, then throw the book at them, but until they have that evidence I think it's a little mischievous for them to be insinuating about [the role of] the Cattle Council.”

Senator McKenzie said such comments suggested the peak bodies were not hearing the message that small-scale producers are a vital part of the beef sector.

“We had a hearing up here in Wodonga and all our fabulous farmers came and we very loud and proud, which was great,” Senator McKenzie said.

“But when we had Rod Sims, the commissioner of the ACCC, in front of us and we explained the Barnawartha issue, he said, ‘Senator that doesn’t sound too good’ so he actually launched an investigation.

“When he came back to us to report to the Senate Inquiry, and there’s the Hansard transcripts you can go through about what he found, he said he couldn’t lay charges but his words were: ‘he was very concerned about the behaviour that he saw from those processors’.

“For the commissioner of the ACCC to say that, I thought, was really instructive.

“He did say at the time if we had concerted practice measures in our competition law, he would have been able to pursue it.

“Since the election we’ve implemented as a government those concerted practices measures within our competition law.

“If that were to happen now, we do have the competition law that he could probably prosecute.”

The Red Meat Advisory Council said it was working hard to improve efficiency.

“We are perplexed by (the Senate committee) view that ‘the committee is not satisfied that RMAC has demonstrated sufficient improvement in terms of efficacy or accountability over the past two years’,” RMAC chair Don Mackay said.

“Together with our partners, RMAC has – among other things – worked tirelessly on trade reforms for Japan, Korea and China which will return up to 20 billion dollars in value by 2020, launched the Australian Beef Sustainability Framework which aims to defend and promote our industry against a 6 billion dollar risk and provided advice to key Turnbull-Joyce government initiatives including the Foreign Policy White Paper and the National Freight and Supply Chain Strategy.”

The full report can be found here.