THE independent committee charged with delivering a recommendation over future expenditure on red meat marketing and promotion has adopted a ‘steady as she goes’ policy, finding no grounds for change from the current $5 cattle transaction levy.
The Beef Marketing Funding Committee chaired by Nebo cattleman, Peter Hughes, presented its findings during a Meat and Livestock Australia seminar at Beef 2009 yesterday afternoon.
It suggested that the current $5 levy be retained, as a ‘modest but appropriate’ investment in the future of the industry. It also urged that a minimum return on investment to producers be set at three times the overall marketing levy as a performance yardstick in future reviews; and that all future levy reviews be undertaken as a result of industry need, triggered by peak councils, and not according to a pre-determined timeframe.
Under the current arrangement, struck by the Primary Industries minister when the levy was last changed back in 2006, a sunset clause was inserted where the levy would revert to its previous level of $3.50 unless the industry sought otherwise.
Among the steering committee’s general findings were that:
* the additional $1.50 marketing levy raised since 2006 had delivered five times the investment back to producers
* the major impacts on livestock prices since 2006 had been high exchange rates and high grain prices until late 2008, and more recently, credit restrictions on global trade and the collapse in demand for co-products like hides and offal. Without these impacts, livestock prices would be at or near record levels – in fact the decline in offal/hide value alone almost entirely accounted for the decline in livestock prices between 2005 and today. The marketing component of the $5 levy was helping cushion Australian livestock prices from the worst of these negative forces
* the industry faced mounting attacks on its environmental integrity and increased competition in major markets; as well as valuable opportunities such as its world leading systems in product quality, safety and industry integrity, which stood the industry in good stead to grow existing and new markets
* the industry must continue to invest in a broad range of programs to consolidate its position in beef markets and address the challenges and opportunities that lie before it.
Countering increasing misinformation in the community, both overseas and within Australia, about the industry’s animal welfare integrity and environmental impact was one of a number of challenges the industry faced over the next five years, the committee suggested. Another was competing with significant volumes of cheaper product entering overseas markets from South America and India.
The committee argued that the additional $1.50 investment in beef marketing and promotion since 2006 had been spent effectively on a range of issues:
* Helping Australia capitalise on the absence of US beef in Japan and Korea, and better positioning itself as the US returns to those markets
* Helping maintain high levels of consumer expenditure on beef within the domestic market in the face of calls to reduce red meat consumption on environmental and health grounds
* Establishing offices in Russia and China to support and position Australian beef in those emerging markets
* Strengthening Australia’s livestock export market position, particularly within Indonesia, and enhancing the evolution of the Australian industry from the status of a commodity supplier to that of a trusted source of quality beef products.
*Extract from full report available in May 14 edition of Stock & Land.
Sign up for our newsletter to stay up to date.