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BEEF WARS
What is going on with the ongoing feud between some Australian beef producers and its own peak body Meat and Livestock Australia.
MLA was established with the assistance of the commonwealth government to act as the peak body for Australia’s meat producers. MLA is funded by a compulsory levy paid by every producer on livestock sales.
MLA is well funded and well staffed with marketing offices across the globe. Last years Financial report shows that total revenues were $161 million with $98m coming from producer levies, $11m from processors and just over $1m from live exporters.
According to last years financial’s the board spent $96m of those funds on marketing Australian meat abroad and domestically and about $20m on reaseach and development.
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The company is run by a stable, competent and well qualified board of directors with North QLD cattleman Don Heatley [ pictured above] having been on the board for a decade and Chairman since 2005 . Indeed of the 10 board members 5 of them own farming enterprises. The other 5 board members have long term involvements in the meat industry as processors, scientists or in corporate agriculture.
As an industry funded representative body on the surface of it you’d have to say they don’t get any better than MLA. A case in point is that the MLA spent $116m last year on marketing Australian meat and research and development. Contrast this to the USA whose livestock levies raised just US$45 million to be spent on the same activities.
Things however are not all back slaps, steaks on the barby, cold bear and happy times in the meat industry. In the run up to this years Annual General meeting in November MLA’s long standing dispute / battle with disgruntled cattle producer group Australian Beef Association (ABA) has flared up again.
ABA with signatures of 160 MLA members and levy paying livestock producers has proposed three controversial resolutions be put to members at the upcoming AGM.
Sensationally those resolutions call for a “Vote of no confidence” in the entire board and the removal of Chairman Don Heatley and Managing Director David Palmer from the board?
Below we quote Directly from the resolutions submitted by the Australian Beef Association. Broadly stated these are the issues at the heart on the ongoing tensions between ABA and MLA.
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1. Lack of Accountability. Despite attempts over ten years and in 2002, eight Senate Select Committee recommendations for change to accountability, the Board has not corrected this lack of accountability.
2. NLIS Disaster. We were told by MLA that NLIS was required for us to have access to foreign markets. The USA and South America, with no NLIS, are accessing these markets and getting higher prices than Australia. MLA has refused to acknowledge our concerns at the seriously flawed implementation of the NLIS program and have refused to release the $80,000 study by Ernst Young into the NLIS poll rort by two MLA staff members (who were not dismissed).
3. Cattle Price - Promotion Failure. MLA had our levy raised by 40% in 2005, in a vote taken outside MLA’s Constitution. The Board claimed that it was needed to promote our beef. Since then, their misplaced domestic beef promotion has seen supermarket margins rise and producer prices fall. The non-appearance or contribution by MLA to the Beef section of the ACCC Grocery Inquiry confirmed the “sell out” of its members.
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The board has refused to accept the resolutions with Chairman Don Heatley saying ” they are defamatory or fail to meet the legal requirements for a members’ resolution.”
As a consequence the resolutions will not be voted on at the AGM or the issues discussed.
The board has also raised the ire of some producers by accepting a resolution to be put to the members to increase the combined remuneration paid to MLA directors by $250,000 per annum.
(*Note: see Clarification Correction below on this resolution and actual directors remuneration From the MLA - thanks Damon)
I must say that I do find it quiet extraordinary that the MLA financials posted on their web site do not quote what individual directors are paid.
However our information is that the last time it was available was in the 2004 report. That report quoted the Managing Directors remunerated for 2004 was $489,000 with the other 10 directors sharing $500,000 between them.
The new resolution if passed will see the chairman and 9 directors share a pool of $750,000 as directors fees per year.
One can only assume that the managing directors salary of $489,000 will remain unchanged. This is not an inconsequential amount as the chairman is paid 48% more than the Prime Minister Kevin Rudds who’s salary is $330,000 per annum.
Its time that this long running dispute between ABA and MLA was sorted out. As it will not be dealt with at the AGM, I’m posing these questions for meat producers here online.
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1. How wide spread is producer dissatisfaction with the MLA boards performance?
2. Do you support the motions put forward of a vote of No Confidence in the MLA board and the removal of the Chairman and the Managing Director on the grounds stated?
3. Do you believe the MLA lacks accountability?
4. Do you believe the NLIS is a disaster?
5. Do you believe MLA has ’sold out’ to supermarkets, big corporates as suggested in the resolution?
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(Thanks to readers Sam, Rod, Monica, John and others)
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Update @ 5pm today. -
MLA has emailed the following “Clarrification” / correction re resolution of Directors remunerations.
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Dear Steve,
I have just read the posting titled “Beef Wars’ on Agmates and there are few points that are incorrect that’d we’d ask to be corrected.
The first point is in relation to the statement that the MLA Board are “…accepting a resolution to be put to the members to increase the combined remuneration paid to MLA directors by $250,000 per annum.”
The company has fixed an aggregate limit on the amount of remuneration payable to the directors (excluding the Managing Director). The current maximum aggregate amount for directors’ fees is $500,000 per annum. This amount was approved by members at the AGM in 2000 and this is the first year that an increase to the aggregate amount has been proposed.
Member approval is being sought to increase the maximum aggregate payable to non-executive directors to $750,000. If the resolution is passed the Board will not use the maximum amount at this time, but would like the ability to increase directors’ fees on an annual basis if required and to have the head room to continue to do so to maintain competitiveness in the market.
The Board intends to increase the Directors’ fees, effective 1 January 2009 by 4.53%. This would result in an increase in remuneration of $1,850 (excluding superannuation) per annum for Directors and $3,701 (excluding superannuation) for the Chairman.
The second point that we’d ask to be corrected relates to the comment: “That report quoted the Chairmans remunerated for 2004 was $489,000 with the other 10 directors sharing $500,000 between them.”
The figure for the Chairman’s salary is incorrect. The current annual fees (set by directors in July 2004) are $40,850 (excluding superannuation) for Directors and $81,700 (excluding superannuation) for the Chairman.
We think it’s important to note that analysis undertaken by respected consultant Egan Associates, found that MLA’s Directors’ fees have not been adjusted over time to reflect market changes. The analysis noted that fee adjustments for Directors in companies of comparable scale would have increased in the order of 60 - 70% since the year 2000.
As a membership organisation, Directors devote a significant amount of time attending company and industry events. For example it is estimated that the time commitment required by the Chairman is a total of 225 days a year.
Damon Whittock,
Media Affairs Manager, Meat & Livestock Australia
Thanks for clarifying that Damon.
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Over to you too have your say! You can enter an alias if you wish - though we’d prefer people to identify themselves (first name) for the sake of authenticity.
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Got a tip off, article or have you seen a video or item you’d like to be seen by the Agmates Community? If so please email it to us at news@agmates.com
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- Why NLIS is a fraudulent rip off of Australian Livestock Producers.
- Australian Beef & Lamb Producers Guzzumpt by China & South Korea FTA’s
MLA Limited was formed in 1995 at the instigation of the so called Peak councils by the Howard Government.
Its formation was a requirement of the Memorandum of Understanding (MOU) which is a contract between two entities namely the Commonwealth and the Peak Councils; there is no suggestion in the MOU that the MOU expresses rights that flow from or to Livestock Producers.
The levy referred to is in fact a Tax; in the words of former Minister McGauran in a letter to me in 2007 … “Levies are a form of tax and once collected, like all tax, become the property of the Commonwealth.”
It goes direct to the Commonwealth Treasury; it does not go to MLA Limited; funds are allocated by the Commonwealth through the Ministry of Agriculture, Fisheries and Forestry, through the annual Commonwealth Budget, like any other Government Department.
The Peak Councils were appointed in Commonwealth legislation in 1995 as public servants as is MLA Limited; the Peak councils hold Primary Shareholder status, full voting and managerial status by virtue of the Commonwealth of Australia Constitution, as only Civil Servants can appropriate Tax funds at the direction of a Minister of the Crown.
It follows that all resolutions at the AGM are subject to prior approval and agreement with the relevant Minister and Federal Cabinet, there is no real place for livestock producers at an AGM accept agree with the agenda which is cut and dried months before.
That’s why your motions failed.
The truth is no one can be allocated voting rights in any Australian Company based on a Tax paid to the Commonwealth Government; this also implies compulsory membership of an Australian Company which is also illegal; so it then follows that Producer membership of MLA Limited is designed to make you feel good and included, but that’s it.
The structure has fooled a lot of people for a long time.
There is one thing that those 150 members of MLA Limited should be aware of; because you are on the Membership roll of MLA Limited you are required by law to comply with the Company’s programs (e.g. NLIS & LPA) under the Corporations Act.
on the other hand if you are not a Member and are forced to comply against your will with Programs and Policy of MLA Limited by Executive Decree and this is found not to be legal in the future you can sue for damages and loss, an option that Members will not enjoy.
All current Members of MLA Limited who disagree with the Policies, Programs and Political structure and the concept of a Commonwealth Constructive Trust over your Private Property in Land and cattle etc… should resign immediately.
The resignation must be worded in a certain way to include orders to MLA Limited regarding NLIS and LPA over your property and a Declaration on issues under the Privacy Act and common law Duress.
Just remember, CCA and the other Peak Councils are funded from the Public Purse also, from a different funding stream to MLA Limited, a funding source totally independent of their meager grassroots membership
Rod,
That’s interesting. When I get my livestock sales accounts I note that in addition to the normal sale charges there are also deductions for “Sheep Transaction Levy”, and “SA Sheep Industry Transaction Levy”.
So, they are actually government taxes that you pay regardless of income status. One should be able to claim them as tax offsets on their income tax assessments, because if they are taxes and not plain deductions they should have offset value.??
Also, we are forced to comply with filling out NVD and other forms, and to purchase specially printed tags with PIC numbers, or we can’t trade… or can we ??
Then, there is the mulesing debacle. I’ve been told that the deadline is a big MLA bluff, and that there is nothing illegal about the procedure. Now I’m wondering what to believe.
Thank you Rod for including the facts here.
Firstly MLA is not an Industry Funded Representative body. MLA is government funded from Commonwealth Consolidated Revenue from Taxes (Transaction Levies).
As a result it cannot be a representative body, if it were the financial reports would be put before the AGM for acceptance. Private individuals cannot have a say in how Commonwealth Consolidated Revenue is spent. The lack of real input into the ACCC grocery inquiry by MLA highlights that MLA is on a “tight” government and big business leash.
While it would appear that MLA spends much more on marketing than the USA, I don’t believe this is effective for livestock producers and realistically the producer is a bottom feeder as the increased meat prices only benefit the retailer and processor.
It is high time that producers had their own organisation separate to processing and retailing who also make up the red meat industry. Realistically a $5 transaction levy for marketing plus NLIS makes no difference in the export market and gives the Australian cattle producer zero advantage in the overseas market.
It may benefit the processor and retailer, but as always the producer ends up funding the farce and gets no benefit.
Basically it is high time that MLA payments were based on performance rather than dreams. MLA and the red meat industry structure is way past its use by date.
In the background there are thousands of disgruntled producers with MLA, because they are not accountable and can’t be. All these MLA people are Commonwealth employees. They cannot and do not represent the producer.
Producers need to speak out and write to the agricultural minister with their concerns to get this changed.
I congratulate the ABA on at least trying to get the structure changed. Without their independent attempts to highlight the mess I’m sure we as producers would be even worse off.
I find the arrogance of the MLA board appalling.
There is no accountability. I pointed out to the minister for agricultures office that if it required 75% of Australia’s population to vote out an incumbent government, we would end up with a one party state.
We have been beef and wool producers for generations. Bodies that have been foisted on us for years (AWC. AWI, MLA) have always cost us more than they have benefited.
They can never be anything but political, and impede the development of innovation, and commercial marketing. A culture of paternalism and I am afraid corruption is inevitable because of the compulsory funding by taxation.
I challenge the MLA to make the levy voluntary, that would tell us how many people want them!!!
Susan,
One can only hope that when it comes time to review the cattle transaction levy (currently at $5 per head), that our current Federal Agricultural Minister doesn’t just accept that the increase for beef marketing has actually achieved anything for the producer.
All we here from MLA and the general media is that beef meat income is up and record prices at sale yards.
These figures and statements are misleading. I know for a fact that beef cattle producers are not receiving enough income to offset the massive increases in production costs, NLIS , fuel etc etc.
I doubt that actual sale yard cattle prices reflect any upward trend that could be attributed to the increased cattle transaction levy.
If ever there was a con job (like the wool corporation of the 80s) this is it.
Fortunately our industry is strong enough to carry it, but I can see a lot of advantages in not having a MLA.
Their marketing is a sick joke and NILS is a case of the Kings New Clothes. 100% bull.
A massive financial collapse might get city people to ask a few questions about our corporate/government fascist system -
Things have gone completely mad if little people have to prop up the evil merchant banks that financed 911 and other terrorist events and the illegal wars of Iraq and Afganistan.
When are people going to stand up against the criminals in power in Australia the US and the UK?
Rosalie,
The answer to your query is …Yes … the levee is a tax offset on your income tax annually.
With regard to the NVD’s, they are part of MLA’s LPA, the NVD forms themselves are of no legal effect as they are not legislated and in any case are not executed correctly in accordance with federal legislation governing statutory declarations. LPA itself the way MLA is enforcing it is in breach of the Trade Practises Act in that the Trade practises Act provides that it is illegal for any person, contract or agreement to enforce or facilitate a restrictive covenant (s45B; s45C) through a third party, which is what the processors and saleyards operators are doing.
NLIS is Quarantine as it restricts movement of livestock that are not diseased and without a declaration of disease that is a breach of the Quarantine Act and Section 51(ix) of the Commonwealth of Australia Constitution and the Act. There are also significant Privacy Act issues with NLIS principally with the unauthorised use of Private Information collected by MLA and passed on to the Processors in their marketing of their Beef products without the express permission of the producers.
John Michelmore,
Do you know what the ABA proposed to do if their Motions did get up? Do they support MLA in principal or not or do they want it abolished?
If John does not know does anybody else know?
Rod,
While it is unlikely any motion relating to the management of MLA will get accepted in view of the fact that cattle producers cannot have a say in the management of, or expenditure of what is basically a government organisation masquerading as a producer controlled organisation.
While the ABA can and does control a significant level of voting rights, for producers who continue to believe that they are having an input into MLA, they will find it difficult to achieve the required 75%.
I can’t really comment on whether the ABA want MLA abolished. My personal feeling is that the whole Red Meat industry structure needs to be abolished and separate producer, processor and retail organisations be formed that are actually controlled by members and not public servants (Commonwealth Officials)
The existing marketing and R&D MLA gravy trains need to be abolished with performance based organisations replacing the lot.
Thank you Rod. By complying with LPAs and NLIS requirements are producers becoming accomplices in the breaches of the said Acts? - ie accomplices in crime? If producers refuse to comply can they be denied access to the livestock markets? You mention processors and saleyard operators. What is the status of the stock agents in all this?
Are you, or anyone else able to comment on the mulesing saga? Thank you.
Rosalie
No not accomplices, victims. The livestock at the centre of this discussion are the Property of the Producers; as part of the MOU MLA is charged with Marketing, MLA interprets this to include the saleyards and marketing of all livestock throughout Australia, primarily to Taylor make the animals fit the processor desires.
The processors are gaining increased dollars for their product at absolutely no cost and the Australian taxpayer is paying for everything out of the Treasury.
The saleyards and agents are carrying out “third party enforcement” by enforcing MLA’s requirements as are the Processors e.g. turning cattle away without LPA; refusing to kill animals without LPA; coercion to enforce membership of LPA; suggesting that without LPA you will be bankrupted. “Third Party Enforcement” is an offence under the Trade Practises Act.
Things that form the land are our private property including our cattle on the said land and also include the management of the land and cattle and our business plans and they are therefore our hereditaments either corporeal or incorporeal; they are indefeasible from the Land, the Title and Deed, of the Estate of Inheritance Trust and Equity.
LPA once fully implemented will mean the acquisition of part of your land because the way you manage that land and the livestock will be dictated by MLA at the behest of the forces that which wish to control you.
E.g. this is what LPA want to control;
1. Food Safety
2. Management
3. Animal Welfare
4. Environmental Management
5. Eating Quality (presumably of beef)
6. Transport
7. Animal Husbandry
8. Market Access Requirements
9. Disease Control
10. Livestock Export Production
11. OH & S (presumably Government Style)
Rather than legislate the Commonwealth has chosen this method of regulation believing that it will be easier to have so called industry leadership proclaimed as Public Officials and them pay them an indecent salary and have them travel around in style and enforce Government Policy; it’s worked well to date.
Refusal to be included in this Constructive Trust should be all Livestock Producers responsibility; if you are a member of MLA resign immediately, in the correct way.
I’m sorry I do not know anything about Mulesing so cannot comment.
Rod,
So taking this to the next step.
In view that the ABA and MLA memeber’s cannot influence MLA policy and expenditure etc etc ( because basically MLA is Government controlled), in addition to having to get 75% majority for motions that have nothing to do with actual MLA management; doesn’t the following apply?:-
1) The ABA should completely change tack and move for change outside of the existing structure.
2) This would involve the ABA recommending to all its members and MLA members that they immediately resign from MLA. This removes the participation that basically gives MLA its power.
3) ABA to approach the Federal Government with a view to set up an alternate producer structure, to the existing Red Meat Industry structure.
If the current regime continues livestock producers can only expect more regulation, restriction and whatever the existing structure wants to protect its status and income; while treading all over individual property rights, trade and privacy.
While I can see this will be a painful move for the ABA, because it will lose larger members who may be benefiting from the existing structure, it must also be seen to be of value to the smaller producer who needs a voice against the never ending barrage of regulation, restriction of trade, and the loss of privacy.
The costs of a megalith, as MLA has become, has reached a point where producers are looking for a viable alternative to all this government regulation that only in the end increases production costs for no producer benefit at all.
John
Yes I think the facts are clear that the livestock sector of the Australian economy is being shafted by the current groups empowered by the MOU of unelected politically appointed public officials; seemingly distinctly lacking the necessary professional skills needed in international marketing and trade in this industry.
These officials are appointed by and for political patronage and ideology; being paid handsomely from Public Monies. Surely the Government can provide, either from within the existing public service or from the private sector, or internationally, the professional capabilities required for international marketing and trade that the industry needs, without the huge bureaucracy that MLA Limited is; and provide it cheaper, with funding based on performance standards, and goals to be achieved.
The current arrangement does not allow for performance base remuneration and as a result is ineffective in achieving the goals of marketing and research required by livestock producers. The current Consolidated Revenue being sent to MLA is predominantly wasted as a result of duplication and the lack of proper accountability to either the Federal Government or anyone else.
The other critical consideration is that the Livestock Sector (Primary Industry) and the Processor Sector (Secondary Industry) must be separated in any future structure. If there is one thing we have learnt under the current structure it that the tyranny of the Processor Sector dominating the Livestock Sector to our financial detriment simply by enforcing regulatory control over livestock producers; with the processors achieving significant financial gain from the now regulated “terms of trade”.
What I do question is weather the ABA actually has the “ticker” to do it!!!!!!
They will want to act soon or some other organisation will rise from the growing discontent and attack MLA or more importantly the Peak Councils.
MLA Performance.
Just returning to this subject, one should ask the beef producers in WA about the performance of MLA in relation to their market in WA.
I believe MLA has shown little interest in the record breaking low prices in WA and had to be dragged kicking and screaming into this subject.
This is why if we must have a Government controlled body like MLA (supposedly representing producers) that MLA income be related exactly to the beef producers cattle price.
This then makes MLA committed to performance in an open and free market. It is all very well for government to want free markets but any tax or levy for marketing should only be related to performance.
In this way we have a chance of getting actual performance and actual interest. The current situation encourages nothing as far as performance from MLA. I’ve heard that some members of MLA actually criticised beef producers in WA for the low prices.
I would have thought MLA action and help was their job description in this situation. Doesn’t this just sound like a government department. They take the pay because their income bears no relationship to their performance.
I have heard that it was beef producers like Gary Buller and others who formed a group to address the WA situation. If MLA had been doing their job they should have stepped up to the plate initially.
John Michelmore is absolutely correct in wishing to abolish the current structures.
However, whatever takes their place MUST NOT be funded by levies imposed by Government, as we will always end up with similar “beasts”.
“In view that the ABA and MLA memeber’s cannot influence MLA policy and expenditure etc etc ( because basically MLA is Government controlled)”
- IT IS UNBELIEVABLE HOW ARROGANT THE MLA IS.
The next thing they will put on us is the methane emissions tax so our cows will save the world from global warming and climate change .
It would be hilarious if it wasn’t so absurd and stressful to people. MLA has always been hell bent on wiping out small beef producers and businesses.
I must say the MLA bloke who did our audit was very nice and not at all a bully. He did not want to bash us with bureaucratic red tape.
We had been warned to put up signs saying NO TRESSPASSERS and to tape record the proceedings but it wasn’t necessary.
I’m sure there are people in MLA who don’t like what is going on there.
Von
I see by this last comment that you must be compliant with LPA, seeing that you speak of an audit. Maybe you should reconsider your commenting on forums such as this.
I draw your attention to section 14.2.1(j) of the LPA Rules which in fact is a contract that you agree to be bound by in order to Buy and Sell livestock;
14.2 Withdrawal of Accreditation
14.2.1 The Committee may withdraw Full Accreditation from an Accredited Producer for 1 or more PICs if:
i) the Committee considers that matters have occurred, or are likely to occur, on a PIC which may prejudice the reputation of the Committee, MLA or LPA Administration, the interests of the Australian meat and livestock industry or the LPA.
Your comments could be construed to… “prejudice the reputation of the Committee, MLA or LPA Administration, the interests of the Australian meat and livestock industry or the LPA.”; that’s how easy it would be to stop you trading … and you’ve agreed to allow MLA to do it!!!!
I am wondering if you have actually read the Contract that you have with MLA Limited and understand it.
In this day and age you should have it interpreted by a lawyer, and what’s more MLA Limited is legally negligent for not advising you to do so prior to your agreement to comply.
“In this day and age you should have it interpreted by a lawyer, and what’s more MLA Limited is legally negligent for not advising you to do so prior to your agreement to comply.”
Well no I haven’t had it interpreted by a lawyer I get your drift though.
We certainly need a lot of people ‘with the ticker’ to change the set-up - HUGE JOB BATTLING THE CORPORATE BIG END OF TOWN
Von
Have a look at sections 10.0, 16.0, 17.0, 18.0, and 21.0.
I would point out that the Contract is arbitrary and penal at best. I would argue that specifically s16.0 deprives us of due process at Law.
Section 21.0 is another matter altogether as any Common Law Contract that contains a right declaring one party exclusive right over the other party governing their Trust and Equity is Void ab initio; even if aggrieved party complied voluntarily.
Currently, all the matters that MLA wishes to control by the enforcement of LPA are administrated by various State Territory and Commonwealth Government Departments in accordance with the Law however MLA Limited seeks to control these matters by Contract relying on s16.0 or the LPA Rules for administration with apparent disrespect of Commonwealth law including, however not limited, to the:
Trade Practices Act 1974 (C’th) - s45 - “Contracts, arrangements or understandings that restrict dealings or affect competition”;
s45B - “Covenants affecting competition”;
45DA - “Secondary boycotts for the purpose of causing substantial lessening of competition” and
Part IVA - “Unconscionable Conduct”, the
Quarantine Act 1908 (C’th) - s66B (ss1) and (ss2) – “Compliance agreements” - and;
86F – “Compensation for acquisition of property” and the
Privacy Act 1988 (C’th) – Schedule 3 – “National Privacy Principles”.