Wednesday, January 01, 2014

Beef industry needs greater control of money from levies

The Federal Government's proposed Senate inquiry into the collection and disbursement of levies in the beef cattle industry should be seized by producers.

They should take control of the money government takes from them and reform the way it is spent.

Both the Australian Beef Association and the United Stockowners of Australia have long complained about the government-appointed bodies that dictate how farmers' hard-earned cash is spent.

The peak industry body, Cattle Council of Australia, is dominated by councillors appointed by state farm organisations.

They represent fewer than 20 per cent of cattle producers yet set the mandatory levy all cattle growers must pay.

Beyond that, the Meat and Livestock Australia spends the $56 million of levies with inadequate guidance from the cattle growers.  If that was not bad enough, it is not clear that anyone actually knows who is paying the levy.

There is no definitive record of who has paid the tax (or even how much).

The levy is simply collected from the overall cattle yard sales at the end of the day.

By contrast, Australian Wool Innovation offers a fully democratic model for wool growers.

Not only do they directly vote for representatives on the AWI, every three years producers also vote on the rate of the levy, which can be between 0 and 5 per cent.  Recently growers voted for 2 per cent.

The inquiry should also look at the successes other agricultural industries have had in involving the private sector.

The National Grower Register has been used to great effect in the grain market.  Each producer is given their own unique registration number that keeps track of all transactions, deliveries and payments.  The database is universal across Australia.

Any levies are taken directly and there is a record of how much has been paid.

The cattle industry can take both the AWI and NGR's leads to create an industry body that will properly provide for growers' needs.  Cattle growers could create their own company limited by shares, where each share equals a head of cattle.  The more cattle you have, the greater the amount of votes.

This prevents part-time hobby farmers from having greater sway than the producers who have the greatest skin in the game.

To facilitate this, the industry would need a registration database such as the NGR (or even employ them directly to mimic the success they have had in the grain sector) to create a definitive list of the producers, and thus shareholders, of the cattle industry of Australia.

Such a board would be best served by subcontracting out the marketing, research and development to specialised businesses, who will have to tender for the work.

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