BEEF producers fear claims of a ‘culture of fear and intimidation’ and ‘rife collusion’ in Australia’s red meat supply chain could be doing more harm than good, given the lack of proof that is emerging from the senate inquiry into competition in the industry.
Disappointment with the interim report from the Senate Rural and Regional Affairs and Transport References Committee appears to widespread across the processing, marketing and production sectors.
Recommendations such as the establishment of a national price disclosure and reporting system and greater oversight of livestock agents have missed the mark, according to organisations including the Australian Livestock and Property Agents Association and Cattle Council of Australia.
The inquiry, which has been running for more than a year, came in the wake of producer angst over processing giant JBS Swift’s acquisition of Primo smallgoods, which included a beef processing plant near Scone, and the ‘no-action’ following inquiries into nine processors accused of collusion in boycotting a sale at Barnawartha in northern Victoria.
It is running alongside an Australian Competition and Consumer Commission market study on the red meat sector, prompted by the same events.
ALPA chief executive officer Andy Madigan described the report as ‘rushed’ due to the election.
He said the bulk of the five recommendations were already in place to some degree.
“A transparent pricing mechanism at saleyards exists - it is called an auction system,” he said.
“National price disclosure and reporting systems are there, in the form of the National Livestock Reporting Service, the back four pages of papers like The Land and the ABC country hour.
“Best practice modelling for saleyard design is already happening - saleyards are constantly changing and the people putting big money into infrastructure are consulting with experts in occupational health and safety and animal welfare constantly.
“ALPA, and other bodies, conduct extensive training for livestock agents - in NSW, for example, agents must complete 12 professional development points per year in order to renew their licence.
“What we expected from the inquiry was proof of all the claims of collusion. No proof has been given, just more finger pointing and rumour.
“If there is indeed a problem, we’d certainly like to know about it and I’m sure the processing sector would too, so we can clean it up.”
Cattle Council president Howard Smith said the recommendations had missed some key areas of reforms that would ensure producers received fair returns for their product, including incentivising new entrants to the processing sector and reforming beef industry language.
“It appears there is not a lot of hard data, just a lot of opinions and rumours, coming from the process,” he said.
“That sort of pub talk is driving the industry down.
“We need to be continually looking at how to do things better but we need constructive pathways.”
Experienced Queensland marketer Danny Wilkie, Objective Livestock Marketing at Goondiwindi, said the process ‘appeared to pander to a fringe element of conspiracy theorists.’
“Phrases such as ‘pricing mechanisms lack integrity at the saleyards and over the hooks’ and a ‘culture of collusion permeates saleyards’ are a little over the top,” he said.
“Perhaps more relevance should be placed on supply and demand when looking at price discovery with integrity.”
Mr Wilkie said the grids coming out of the Scone facility following the JBS acquisition were attractive and competitive.
“In an industry where it’s hard to get a number of processors in the same room together, such is the level of competition between them, the idea of collusion is almost laughable,” he said.
Both Mr Wilkie and Mr Smith said the focus on single commission buyers with multiple orders to fill was of particular concern to producers.
“If we start mandating to take those players out, there will be fewer people in the market buying our cattle,” Mr Smith said.
“Without these buyers with multiple orders, some smaller saleyards would simply fold,” Mr Wilkie said.
Livestock agents also told Fairfax Media they had concerns about being misrepresented via senators referring to processor buyers and commission buyers as ‘agents’.
The final report is expected in December.
