Rural Australia

MLA AGM: Fiduciary Responsibility or Farcical Tragedy?

Eksperienced one — Sun, 13 Nov 2011 23:27:12 +0000

fiduciary. 1) n. from the Latin fiducia, meaning “trust,” a person (or a business like a bank or stock brokerage) who has the power and obligation to act for another ….

The question is whether the power ceded MLA by Parliament and overseen by ASIC, is being used as intended? I am sure MLA wouldn’t be intentionally acting against the best interests of its funder tax-paying members. However, the way it seems to measure its effectiveness is through advertising indicators, I would suggest its producer members would prefer different measures e.g. real on-property returns and price/kg paid by processors since the advent of MLA.

Producer members on the whole don’t vote at the MLA AGM, (last year 2.5% of levy payers obtained their voting entitlements) leaving huge voting power in the hands of their natural enemies, the processors who can and do also vote and some large producers, many according to Australian Beef Association receive MLA funding. (Processors have their own organisational and political Association but are allowed to vote at MLA because their pre-slaughter holding areas have a PIC).

This obviously means that MLA has a serious philosophical conflict as it is not going to be able to focus just on the needs of producers if it has also to listen to its processor members.
Why was MLA implemented? I think it was to look after producers who in turn would pay a tax to support such. I don’t think producers were to be taxed to have MLA look after the processors as a primary goal alongside producers. (Of course processors need to be considered as an important part of the supply chain but from a producer’s perspective).

I think it would help MLA to side-step the political brawling it is involved in with producer groups and start again with a focus on the producer. However, it would seem the only way this is now possible is to dump MLA and replace it with a new group with a producer focus. It happened in the Wool Industry and perhaps the time has come for meat livestock.

(The MLA AGM is at Longreach on November 17. Australian Beef Association is urging all producers with voting entitlements to forward them their proxies to be used to gain a focus on producer needs Ref:ABA Website).

What Do You Think?
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Elders Loss Doubles $395m

Eksperienced one — Sun, 13 Nov 2011 22:55:47 +0000

The heading in Theage.com.au, “Elders loss doubles $395m on forestry charges”.
Not good news when the share price after last year’s carnage, has basically halved from May to November this 2011 year.
The CEO says it is actually good news though as the loss-making forestry group is being sold-off. (I guess that means it still isn’t gone(?))
Despite the CEO saying the “underlying profit” is much better, a dividend isn’t being paid, so I guess that means there is still a lot of “underlying” stuff with the “visible” stuff yet to show itself in real terms to investors.
It would be interesting to compare the ‘underlying’ rural business with competitor Roberts Ltd’s successful model. i.e. Even if Elders was to (eventually) get rid of the forestry and auto businesses, would its model with so many fixed costs be any good anyway?
Some questions that I would ask of each:
- What is the ratio of livestock to real estate expenses?
- What is the ratio of livestock to real estate revenues ?
- What is the ratio of merchandise to livestock
etc…

What do you think?
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Major Rural Political Issues

Eksperienced one — Thu, 18 Aug 2011 03:12:08 +0000

How would you prioritise the following issues?
- Coal mining access Farm Land Appropriation by Govt
- Coal seam ‘fracking’ John Anderson making money
- Cost Of MLA’s Meat Marketing Actual stats
- Humane transport and slaughter of stock
- Mulesing ABA Supports Mulesing
- Carbon poisoning Read more
- Forestry plantations on prime farming land
- NLIS [Obama drops NLIS] [Read more]
- QA Programs Read more
- MLA democracy Read more
- Major processors owned by our largest livestock competitor nations Read more

My guess is that just like non-rural Australians, not all of Australia’s farmers will agree on all of these issues. And not all farmers vote for the same political parties. That raises an issue of whether we should be organising ourselves differently in a political sense.

What do you think?

Please leave your comments below.

Is The MLA Quango Like Al Capone re. Live Export Ban ?

Eksperienced one — Sat, 11 Jun 2011 05:10:52 +0000

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

Eksperienced one — Mon, 07 Mar 2011 04:41:31 +0000

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?
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Unique Animation On Australian Farmers Voting Pain

Eksperienced one — Thu, 11 Nov 2010 07:13:57 +0000

This new animation attempts to explain the inequity between Australian farmers and processors who both get to vote at MLA.

Click to view This Unique Animation On Australian Farmers Voting Pain

What do you think?
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Is Democracy Dead In Rural Australia?

Eksperienced one — Tue, 09 Nov 2010 01:11:54 +0000

Andrew Rea from Bowen is an Australian Beef Association (‘ABA’) Director. He wrote a letter calling for a return to democracy in the Australian livestock meat industry. (It was recently posted on the ABA’s website http://www.austbeef.com.au).

The long and the short of Andrew’s comments is;
1. while all livestock producers pay tax levies to MLA this does not provide them with a vote. i.e. They then have to register as an MLA member.
“”At 2009, MLA AGM approximately 47,000 MLA members …less than 1/5th of Australia’s 200,000 producers”, are MLA members and so were able to vote. Of these, only 5,085 (about 11%) actually did vote. But then, the top 50 members can out-vote the other 5,035 by weight of their numbers of votes. (And many of these are from processors, the natural enemy of the producer – ed).
2. Cattle Council’s membership represents about 10% of the industry, through their association with State Farm Organisations. However, for some reason ‘it’ is stating things that most producers just don’t agree with. e.g. Cattle Council has said it is outrageous for ABA to call for MLA’s demise by 2011 for working against democracy in the Industry.

Solution
Mr. Rea proposes that the Minister for Primary Industries organise a one person one vote plebiscite, asking in the name of democracy,
a) Should the status quo remain or -
b) Should there be a new industry structure based on a ‘One Vote One Value system’, with votes automatically given to all producers who sell cattle in that year?

What do you think?
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Well, Elders Sells Bank Interest But Still Lags

Eksperienced one — Mon, 08 Nov 2010 23:21:22 +0000

It’s a pity Elders had to sell Rural bank to get some $dough to decrease its debt. Their shares increased a bit on the news but are still not yet 50% of what they were back in mid-April (just over 6mths ago). Does the market think that traditional agency models based on taking 5.5% of stock sales to cover salaries, offices, cars and phones, is numbered? Good agents in any marketplace can offer good value but with producers expenses being squeezed from all sides we all know that direct and paddock sales with no agents or agents on decreased fees have increased. With online marketing (and even bidding) options opening-up, who knows what will happen to agencies like Elders in the future.

What do you think?
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Is The Time Ripe For True Bush Independence?

Eksperienced one — Wed, 01 Sep 2010 07:41:37 +0000

Apparently the Greens can see a way for Australia’s farmers to be rewarded for good farming management. That stands to reason, most of Australia’s carbon-soaking trees live on farms. However, as far as I can find, the Libs and Nats haven’t addressed this issue other than to say they won’t tax farm carbon production.
Like protectionism which has no practical hope of re-implementation in a globally connected World, simply saying farmers are not going to be carbon-taxed at some stage just won’t hold water in the long term if other groups are being taxed -the other groups won’t stand for it. So, we have to address the issue in commercial terms or end-up with a Howard and Costello, “Read my lips, there will be no GST!”, -type situation where it is done without rural involvement and lands on us like a bag of bricks. Which makes reward from the Greens not sound too silly, doesn’t it.
In addition, farmers have been campaigning to keep miners off their good farm land. Have the Libs and Nats addressed where this sits with the Mining tax?
As for Mr Abbott claiming that Australia’s rural producers would support processing of their product overseas rather than here, hasn’t he ever heard of “Buy Australian Made”!? My guess is that unless we address the adding of value pre-export, our production is going to continue to be compared to the labour forces of Brazil and China, whether quality is involved or not!
I think in 2010 we need to be a bit smarter and look at just how Australia’s producers really will be affected by each of the parties.
Tony Abbott says Labor and the Greens, “..will introduce a carbon tax, and mining tax and there will never be offshore processing.’’ After many, many years of not looking after the bush, it seems Mr. Abbott is relying upon the good ole support of the good ole boys yet again!
Perhaps this latest political hiccup is the wake-up call we needed to think along truly independent lines for the good of the bush and Australia in general. Perhaps if we can act a bit smarter than the old knee-jerk vote along party lines that has become expected over the years without the Bush ever achieving anything significant like true broadband access, we might actually achieve something.

What do you think?
Please comment below.

AACo To Employ Producers To Grow Their Calves

Eksperienced one — Tue, 10 Aug 2010 03:28:49 +0000

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?
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