Foreign investment in farming is a tricky issue. Many believe that if you own something you should be able to sell it to whomever you wish. That’s part of the capitalist system. However, being part of a society means we have all sorts of responsibilities to others who live in the society and there are rules that govern our behaviour. As a result, no land title holder is actually allowed to do whatever they like with their land. e.g. They can’t farm drugs on it and they can’t denude it of native bush. The assets in fact, are not to be used against the national interest. So, presumably, if foreigners buy Australian land, they need to follow the same rules as if Australians owned it. I guess this why David Olsson: Lawyer & Chairman of the China-Australian Chamber of Commerce, Beijing stating that,
“Just because a company is owned or controlled by foreigners does not mean that the assets cannot be utilised in the national interest”, is a bit of a furphy.
It sounds feasible on the surface and I would like to think it possible. However, I wonder how it works in practical terms. Is it similar to Alcoa that has received multi-millions in Australian government assistance to employ Australians but is able to ship its profits off-shore? Wouldn’t it be better if we could keep the profits in Australia to spread across even more jobs? I think there are other related issues to consider as well. e.g. For years Australian dairy & beef seedstock has been sent to China & Indonesia? With the exception of the immediate sales value, how does that help our Australian society?
If the created wealth of a country isn’t kept in that country my first thoughts are that apart from that country e.g. Australia, not benefiting as fully as possible from the success of the venture (as profits are put to work off-shore), the country is open to other abuses. Australia has a problem at the moment in that because of its high standard of living, its labour costs are relatively high. If they weren’t then the economy would be in the same shape as Europe and the USA as there would be even less flowing funds than there are. My concern with carte blanche foreign farm/asset investment, is that Australia again gets screwed on price which in turn relates back to labour rates which puts us at a severe disadvantage to 3rd World countries who will always beat us on labour rates. Ha! Even China is now apparently losing labour to Mexico and Africa now.
Read David Olsson’s article here
And just so we don’t all go beating-up on China as a leading global culprit here, Prof Mike Peng, Uni of Dallas Texas, discusses the difference between various national investors. here
What do you think?
Please leave your comments below
Archive for Livestock issues
Are We Scared Of Foreign Farm Investments?
Video First: Beef Costs, Farm Gate to Retail Shelves
The Australian Beef Association believes the ACCC and politicians are wrong about complexity in the meat supply chain. It says this is why politicians continue to neglect the supermarket meat issues.
In what it believes to be a first, the ABA have posted on their web site a power point presentation to give an insight into the cost of a live beast at the farm gate to meat on retail shelves.
See what you think? And leave a comment below.
Is The MLA Quango Like Al Capone re. Live Export Ban ?
The live exports ban fiasco has prompted a deeper view of MLA’s activities a la Fairfax Business Editor, Michael West’s Cook’s tour of MLA’s problems. Read more: http://www.theage.com.au/business/export-ban-has-halfmillion-herd-on-the-hoof-20110610-1fx3d.html#ixzz1Ow67V5dg
Perhaps as MLA is a corporation, ASIC will finally get involved now, even if the Federal Government keeps hiding its head in the sand over the MLA quango. Who knows, just as Al Capone was jailed for tax evasion rather than murder, MLA may be restructured or closed-down due to ineptitude rather than misappropriation of funds!
Better Returns From Price Transparency and Marketing Control
The livestock market isn’t all that difficult to understand, is it.
I’m sure we’d all be very happy if there were several buyers for our stock every time they went to market. Store animals do OK when grass is good enough to attract more competition by our colleague producers and we can’t do much about that. Unfortunately, anecdotally, when it comes to fat animals, buyer competition seems to be becoming more of a rarity with the duopsony of the two big supermarkets putting the screws on prices. However, even in this situation some times there is going to be some open buyer competition at ‘yards. Such competition doesn’t happen when stock is taken direct. So, why are producers increasingly dealing direct and allowing processors to cut their beasts up before deciding what price they will receive? Sounds more like gambling than risk management to me. Sure, ‘works’ prices can seem very good. But how much better is one works than another? And how do they really compare to the ‘yards?
Even when some producers have the luxury of comparing between 3 ‘yards and 2 processors, how can they do it without a system for comparison?
Without any livestock market transparency (past prices from a recording service based on averages can be a waste of time if you have animals at the top or lower ends!), the best I can think of is to request grids that will hold for 2-3 weeks from the various works and list stock for online auction e.g. Saleyards.com.auwith a Reserve price that would be acceptable to you. If they don’t sell, then you can always take them to the ‘yards or works and take your chances.
If works can’t guarantee prices this far out why would you take the chance of trusting them as they are price-makers and producers are price-takers? Surely growing stock for up to 3 years all at your cost and risk, you deserve better. You can take more control now.
What do you think?
Please leave your comment below.
AACo To Employ Producers To Grow Their Calves
Apparently AACo is set to farm-out beef production for 90,000 calves.
Are you one of the ‘selected partners‘ to produce these calves for AACo using AACo genetics by 2013?
How does this work? We do know that amongst all of the PR spin on this topic, AACo’s focus is on attempting to turn-around their large net loss which means they want to save money while creating revenue. Makes sense then that they would like to outsource stock production if they can do it less expensively than growing it themselves.
I guess that some of Australia’s farmers are now really starting to realise that it is their skilled labour they are selling. It’s just that as distinct from ‘labour’ they are also accounting for their capital costs in machinery and land etc.
How do you think we will compete in this labour market that includes South American and Chinese labour costs producing the same product (albeit not an Australian grown one)?
Read more here
What do you think?
Please leave your comments below.
A Bit Of A Round-Up
Huge Beef Consumption Decrease With No Light In Sight!
July 2010 MLA forecasts over the next 5 years beef consumption is expected to fall 15% from 34 kilograms to 28.9 kg while lamb and pork consumption will remain steady. Annual chicken consumption is expected to increase 9.7% from 38 kilograms a person to 41.7 kilograms.
This is despite MLA spending $700 million of producers taxes on R&D since its inception in 1989.
Hard to believe the MLA’s new $5million ad campaign will solve this challenge.
Producers Present Alternative Beef Industry Plan
A major producer meeting says a meat quality grading system like that in the USA should be introduced that grades carcasses rather than cuts of beef. It said this would help capture more of the domestic market beef for grading (and thus add value and revenue to producers), while a restructure of MLA and research and development bodies was planned to reduce costs and duplication. It claims MLA’s existing MSA QA system has been around for years without any significant uptake or consumer affect, and that most R&D funds allocated by MLA benefit individual applicants rather than the Industry in general.
Read more here
Labour, Liberal Coalition Or Gasp! Shock Horror…Green?
Apparently Minister Burke has snubbed the Australian Beef Association and the various producer forums regarding concerns about issues vital to the industry such as a lack of democracy and general producer input.
The Liberal Coalition Opposition would also have to change significantly to provide any benefit here too! It was Deputy PM Anderson who over-saw the implementation of MLA and its associated lack of transparent democracy and subsequent Minister Truss, MP Heffernan and former stock agent Joyce similarly didn’t provide much joy either while in power.
So what are we to do? Perhaps a left-field option could be to get on the Green bandwagon and participate in the balance-of-power through a deal with Bob Brown where Land rights and care for the land by producers are recognised, coal mining on valuable farm land is cast away in favour of sustainable food production and producers are given a democratic vote on the direction of their industry that is not watered-down by processor votes (just like dock workers and construction workers)? Wonder whether we could throw-in the massive NLIS waste as well?
What do you think?
Please leave your comments below.
NVD’s Are NOT Mandated By law – So Why Are We Being Told They Are?!
Who is spreading the upsetting and costly myth that NVD’s are law?
Does anyone have a vested interest in such misleading and deceitful promotion?
We all know that NVD’s are a tool owned by the Industry (and that is the groups who got together and invented and implemented it in the first instance – The Agents Association, Cattle Council, Sheep Council, Safemeat, AQIS, etc etc – Notably, MLA was not a party to this!)
The NVD has since been hijacked by MLA’s LPA program as a Trojan Horse for their replacement for CattleCare and FlockCare, but in reality an NVD is only required if requested by the buyer. It only becomes subject to The Law and DPI once signed as it then acts in effect as a Statutory Declaration.
This should be cleaned-up with a letter posted to all participants stating the facts i.e. An NVD is only required if a vendor wishes to present their stock for sale with an NVD. And this may be dependent upon the wishes of their prospective buyer.
Whether or not a vendor wishes to participate in MLA’s LPA QA program and use their LPA stamped NVD’s is a matter for outside the selling ring. It has no bearing on the fact that NVD’s can theoretically be written on a piece of old tin (without an MLA LPA stamp) and still be OK (The buyer might take issue with this but legally there is no problem).
This should then solve the growing friction between ‘yards operators, DPI reps and agents who are all being fed the wrong information by their respective associations and managers.
Get it? Whether producers and buyers use NVD’s is up to them and no-one else.
Here’s another angle too
Article on flawed NVD’s
What do you think?
Please leave your comments below.
How Does Japan’s Foot & Mouth Outbreak Affect Australia?
The current Foot and Mouth outbreak in Japan concerns me. Just why, I don’t know …but it does. Check-out an ABC news snippet here
Perhaps we don’t import much (any?) Wagyu beef or other livestock products from Japan. However, if it wasn’t for the Senate RATT committee, we would be receiving imports of beef from countries that are prone to, if not currently diseased by, BSE and other dangerous livestock diseases. It is difficult to believe that this dire situation would have been achieved with the active support of our own MLA and its various ‘feeder’ groups eg. Cattle Council.
Let’s hope AQIS and our location as an island nation will protect us from Japan’s F&M. What we need to do now is use this as a wake-up call to ensure legislation continues to protect us from any other future threats.
Have I got this right?
What do you think?
Please leave your comment(s) below.
Where Do Livestock Producers Source Their Livestock?
The stock agency business is alive and well, but for how long? Elders is on the ropes, Landmark seems to be chugging along and Roberts is making money out of the rural and regional real estate businesses it has purchased. But what value is there in the livestock job?
Historically, agents will be paid for providing value to one party or the other. So, what value is provided by agents to livestock producers?
The accepted rationale has been that the agency business is based upon agents knowing who has stock to sell and who wants to buy it – and at what price. We all have stories of buying stock from a neighbour through an agent because we didn’t know it was available!
However, isn’t the reality that so many agents work their butts off to fill their ‘yards committments? If this is the case, then there wouldn’t seem to be a lot of work going-in to actually matching requirements to availability. Or perhaps there is.
In this age of emails and websites (to say nothing of the old fax-outs) providing information on available stock and buyer requirements, you’d think that agents would be able to source stock for their producer clients before it hit the ‘yards. Now there is also the availability of not only sourcing but also trading online e.g. There is the old CALM (AuctionsPlus) that attempts to emulate the ‘yards with its fall of the hammer system at a given time and now there is even a new online bidding system available at www.Saleyards.com.au where bids can be taken 24×7 on a success-only basis.
I guess this sort of thing must be happening as more and more ‘yards close their gates for a variety of reasons. Otherwise, how are buyers and sellers going to know the true market value of their hard-spent product that needs to generate an optimum return to pay-off the expenses incurred in production. Should they continue to accept agents advice on sourcing and pricing or let the market decide?
What do you think?
Please leave your comments below.
STOP THE PRESS! OBAMA DROPS NLIS!
The US has dropped its version of the NLIS called National Animal Identification Scheme (NAIS).
US Dept Agriculture Notification
New York Times article
There was tremendous opposition from US farmers and ranchers, particularly cattle producers.
Where does this now place NLIS’ with one of its base tenets being to provide Australian beef with increased export leverage? Japan and Korea have already illustrated over several years that they don’t require nor pay a premium for Australian NLIS beef. And US beef is not being hindered in its competition with Australian beef within these markets.
Does this really beg the question as to whether Australian farmers can look forward to the near future when their paid employees at MLA and in Government, finally realise that NLIS is now just a cost impost on Australian farmers – in terms of time and money. Not only are there data holes big enough to drive hundreds of B-Doubles laden with stock through, but en masse it just doesn’t provide any value. The NVD has been shown to work well while NLIS in theory sounded OK but just isn’t practical – apart from the huge expense. If processors and branded-beef labels want it, then as with QA systems e.g. LPA, commercial and fair sense says they, as the user, should pay.
What do you think?
Please leave your comment below.
