Beef Central Op-Ed – “The Square-table”

7 May 2014

The Australian beef industry sits at a critical juncture.

We are experiencing the decline of the so-called mining boom, and, at the same time, an ever-increasing focus on the so-called Asian ‘dining boom.’

More and more we are hearing economists say that a vibrant, innovative and competitive agricultural sector will be one of the pillars essential to underpinning a diverse, world class Australian economy.

There is no doubt there are major opportunities ahead for our beef sector.

To fully realise these opportunities will require more investment, better infrastructure, some labour market reform and increased emphasis on research and development.

But, perhaps most importantly, it will require a significant reduction in the red and green tape that impedes the growth of the agriculture and primary production sector.

Just as the Federal Government is attempting to reduce its dependence on unsustainable borrowings, so too must every beef property across this nation.

As a consequence, we should be wary of those who seek to tie this industry up in more red and green tape.

Adding another, superfluous level of regulation to our already strongly-regulated beef sector can only further challenge farm gate profitability.

I stood on the Federal Senate chamber floor recently and spoke out against the inaction of the banking sector in providing relevant and accurate data detailing the true extent of farm debt across Australia, particularly our northern regions.

I believe this information shortfall hampers the ability of governments to formulate relevant public policy for the rural sector.

It also limits the ability of not for profit organisations, such as social and financial counsellors, to accurately allocate resources across rural regions.

I would argue that making farm debt more manageable and increasing farm gate profitability are among the biggest structural challenges confronting the rural sector as its prominence increases on the national agenda.

In order to maintain Australia’s proud tradition of the family farm, it is imperative that these debt and profit issues be addressed. And quickly.

However, it must equally be an imperative that government continually works towards reducing the burden of cost imposts on rural industry.

The greatest gift the public sector can give to the private sector is to get itself completely out of your way.

Small government that allows the private sector to find its own balancing point is most definitely an ideal held by the Federal Government.

In line with this ideal, there are thousands of pieces of legislation and other regulations that are in the process of being repealed with large volumes more under active consideration.

Accordingly, before any further interaction with this Global Roundtable for Sustainable Beef is undertaken, the Australian beef sector should consider how this roundtable process jeopardises the long term ability of industry to decide its own fate when working towards environmental and sustainable outcomes, as well as its interaction with its customers.

The concerns over the roundtable are focused on the future ability of businesses to make independent decisions and formulate their own, grassroots, industry-driven solutions to tackle a perception that the beef sector has not fully made its case regarding environmentally sustainable production practices.

At best, there may be an argument that industry needs to better share its efforts towards sustainability.

The National Party has recently become involved in this debate because of our collective concern that there could be more work undertaken to ensure the relevant beef sector representative groups seek a collective industry stance.

However, the beef sector should, and must, be the drivers of this process.

There is no doubt that consumer purchasing decisions have increasingly focused on animal welfare and environmental concerns in recent years.

This is in no small measure due to the sensationalist claims of animal rights extremists and sympathetic sections of the media.

However, the beef sector must never forget the environmental movement is not driven by concern over profitability of family farms or the long term viability of the industry.

The argument by those advocating for, and organising, the national ‘Squaretable’ alternative is that there is already a strong case to be made for the Australian beef sector’s ongoing drive for sustainability.

The Australian beef industry spends hundreds of millions of dollars every year in the effort to provide a world class product.

Australian producers meet – and in many cases exceed – any measure of global best management practices. No one doubts this.

If McDonalds – or any of our other major beef customers – want evidence of industry’s drive for world class practice, then let our industry provide the evidence.

If a national, industry-driven alternative can be found to the global roundtable, why not investigate it?

If we can avoid creating additional costs burdens on our producers, why not explore these options?

The drive for branding a product does not require the intervention of third party groups when a sophisticated industry already exists, which is more than ably represented by a prolific number of peak industry bodies and government agencies, all of whom are trying to maintain world’s best practice so the sector remains competitive on the global and domestic marketplace.

Any debate over sustainability should equally consider profitability as well as important environmental issues.

Bluntly put – agenda-driven, third party groups seeking to add further regulation need not apply to this space.

Many with a seat at the global roundtable are also not there as a result of grassroot elections.

The WWF is not there because it has been democratically elected to the roundtable. The WWF is not representative of any particular demographic in society.

It is an activist group that uses its well-known panda logo as a bargaining tool when pushing its policy agenda on multi-national corporations.

Yet, sitting with organisations such as the WWF at the global roundtable, firstly gives a legitimacy to this group’s opinions on the rural sector and secondly, provides the WWF with, at the very least, an equal voice and an equal opportunity to impinge its policies on the future direction of the Australian beef sector.

I have recently met with representatives from the WWF at my Toowoomba office and their responses to my simple questions did not leave me with any confidence in this group’s long term intentions.

The WWF could not answer how an international definition of sustainability could avoid becoming a certification scheme.

The WWF could not answer how any measures could be undertaken to ensure the full cost of a certification scheme would not be passed down the supply chain to producers.

My research into previous WWF-inspired global roundtables, such as the Sustainable Roundtable for Palm Oil, only further supports the belief that the roundtable process will end up being an annual certification scheme that forces individual producers to employ third party groups to carry out regular inspections.

However, there are already alternative options to the global roundtable that should be considered by the Australian beef industry.

When the Australian dairy industry was confronted with one of its major customers, the multi-national corporation Unilever, partnering with the WWF for sustainability, it was able to develop an industry-driven solution that both reassured its supply chain customers that our milk producers were ‘sustainable’ whilst still managing to keep the WWF away from the policy formulating table.

The beef ‘Squaretable’ aims to provide a forum for the representative bodies that govern our national beef sector to collectively collate and promote the outstanding work the industry is already undertaking in the drive to meet consumer and supply chain expectations.

We already have numerous pieces of legislation – across the states as well as federally – and a large body of ever-expanding programs, reports and collected data.

This ‘Squaretable’ process will save time and money whilst providing definitive evidence to Australia’s beef purchasers that there are strong efforts already in place that balance environmental outcomes with the drive to improve farm gate profitability.

The Australian beef industry has much to be proud about.

It is simply a matter of providing a more definitive summation and explanation of these endeavours to our major customers.