Bills Digest No. 79   1997-98 Australian Meat and Live-stock Industry Bill 1997


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History

Australian Meat and Live-stock Industry Bill 1997

Date Introduced: 1 October 1997
House: House of Representatives
Portfolio: Primary Industries and Energy
Commencement: Part 1 of the Bill (clauses 1-6) commence on Royal Assent, the remainder (clauses 7-74) on Proclamation or nine months and one day after Royal Assent, whichever is first.

Purpose

This Bill forms part of a package of 17 Bills restructuring the regulatory framework of the Australian meat and livestock industry. The major provisions of this Bill provide:

  • for the continuation of existing exporting licensing, quota, and enforcement provisions under the administration of Department of Primary Industries and Energy, rather than the Australian Meat and Live-stock Corporation;
  • the Minister with power to declare a body to be either the industry marketing or research body for the purposes of receipt of levy/charge amounts or eligible to receive Commonwealth matching research and development funds.

Background

This Bill is forms part of a package of 17 Bills restructuring the regulatory framework of the Australian meat and live-stock industry. The other Bills in the package include:

  • Australian Meat and Live-stock Industry (Repeal and Consequential Provisions) Bill 1997;
  • Beef Production Levy Amendment Bill 1997;
  • Buffalo Export Charge Bill 1997;
  • Buffalo Slaughter Levy Bill 1997;
  • Cattle (Exporters) Export Charge Bill 1997;
  • Cattle (Producers) Export Charges Bill 1997;
  • Cattle Transactions Levy Bill 1997;
  • Live-stock (Exporters) Export Charge Bill 1997;
  • Live-stock (Producers) Export Charges Bill 1997;
  • Live-stock Slaughter (Processors) Levy Bill 1997;
  • Live-stock Transactions Levy Bill 1997;
  • National Residue Survey (Buffalo Slaughter) Levy Bill 1997;
  • National Residue Survey (Cattle Export) Levy Bill 1997;
  • National Residue Survey (Cattle Transactions) Levy Bill 1997;
  • National Residue Survey (Sheep, Lambs and Goats Export) Levy Bill 1997; and
  • National Residue Survey (Sheep, Lambs and Goats Transactions) Levy Bill 1997.

Industry Characteristics

Table 1: Summary Livestock Statistics

Livestock numbers at 31 March (million)

                     1995        1996         1997     

     Cattle                                            

Breeding cows        11.2        11.7         11.6     

Other cattle         11.8        11.9         11.7     

Total meat           23.0        23.6         23.3     
cattle                                                 

     Sheep                                             

Breeding ewes        n.c.        57.2         58.6     

Other sheep           -          63.9         64.7     

Total sheep         120.9        121.1       123.3     



n.c. not counted
Source: Australian Bureau of Statistics, Selected Agricultural Commodities 1996-97; Australia, Preliminary, cat. no. 7112.0

Current livestock numbers are well below record levels of 31 million head of meat cattle in 1976 and 174.3 million sheep in 1970. During the 1990s sheep numbers have fallen dramatically from the near record level of 173.6 million in 1990 to 121 million in 1995 and 1996. This was due to the collapse of the Reserve Price Scheme for wool and the severe and extended downturn in wool prices. It has been more than forty years since sheep numbers were so low.

Current beef cattle numbers are a little above the average for the last ten years of 22 million. Herd size has been fairly stable during this period.

There is a definite regional focus to Australia's beef industry with nearly half the herd located in Queensland and the Northern Territory. Another quarter is found in New South Wales and 10 per cent in Victoria. 77 per cent of Australia sheep industry is located in three states: NSW (35 per cent), Western Australia (23 per cent) and Victoria (19 per cent).

Table 2: Value of livestock industries


($ billion)

                          1994-95      1995-96       1996-97     

     Slaughterings                                               

Cattle and calves       4.2          3.6               3.4       

Sheep and lambs         0.8          1.0               1.1       

Total                   5.0          4.6               4.5       

        Exports                                                  

Beef and veal           2.8          2.4              2.1s       

Sheep meat              0.4          0.4              0.4s       

Total                   3.2          2.8              2.5s       



s = estimate
Sources: Australian Bureau of Statistics, Value of Principal Agricultural Commodities Produced, Australia 1996-97, Preliminary, cat. no. 7501.0; Australian Bureau of Agricultural and Resource Economics, Australian Commodities, vol. 4, no.3, September 1997.

Apart from the regional characteristics of the Australian meat industry described above, other key industry features are evident from Table 2. These are that beef and veal account for firstly, around 80 per cent of the meat industry in value terms, and secondly about 85 per cent of exports. In addition Table 2 also shows that exports contribute about 60 per cent of the value of meat produced in Australia.

Given the significance of the geographic, species and market attributes referred to, it can therefore be concluded that the beef export industry in Queensland is the largest single component of the Australian meat industry.

Farm Performance(1)

According to ABARE's 1995-96 farm survey, specialist beef producers, that is farms engaged mainly in running beef cattle, represent nearly 30 per cent of all broadacre farms. Sheep-beef farms comprise a further 14 per cent of farms while about one quarter are mixed livestock-crop enterprises.

Specialist beef farms carried nearly three quarters of the beef cattle on broadacre farms and accounted for 67 per cent of their beef cattle sales. The mixed livestock-crops and sheep-beef sectors contributed a further 14 per cent and 13 per cent of sales respectively.

There are two distinct groups of enterprises in the beef industry. The first are small producers mostly found in the high rainfall and wheat-sheep zones of southern Australia. Almost half of these carry fewer than 300 cattle and account for only 12 per cent of the cattle on specialist beef farms.

The second group are larger producers located mostly in Northern Australia. Almost half are located in Queensland where average farm area is around 32,000 ha and herd size is nearly 1200 head. Feedlots, the majority of which are located in the wheat-sheep zones of NSW and Queensland are included in this group. The capacity of the Australian feedlot sector has doubled over the last six years, causing a major change in the pattern of cattle finishing and turnoff.

Selected physical and financial measures for recent years for beef industry farms are shown in Table 3.

Table 3: Australian beef farms: selected measures

(average per farm)

                                      1994-95     1995-96p     1996-97s    

Area (ha)                             13 179       12 711         na       

Beef herd                               704         741           na       

Beef cattle sold                        282         227           na       

           Cash receipts                                                   

- beef cattle                         136 678     105 100         na       

- other livestock enterprises          3 748       4 510          na       

- cropping                             6 628       7 930          na       

- other cash receipts                 17 736       18 610         na       

Total cash receipts ($)               164 790     136 150       117 800    

Total cash costs                      136 923     120 540       107 100    

Farm cash income                      27 868       15 610       10 800     

Farms with negative farm cash           37           45           45       
income (%)                                                                 

Farm business profit                  -15 044     -17 620       -28 400    

Farm capital ($ million)                1.3         1.2           na       

Farm business debt                    110 936     117 280       115 300    

Farm business equity ratio              92           90           na       



p = preliminary,s= estimate
Source: Australian Bureau of Agricultural and Resource Economics, Australian Farm Surveys Report 1997

There is considerable variation in performance between beef farms as highlighted in Table 4 which provides an analysis of farm performance by receipt class. One fact of particular note is that about two-thirds of beef producers have gross receipts of under $100,000 but only account for 22 per cent of the industry's gross value of production (GVP) whereas 14 per cent of farms have gross receipts of over $200,000 and account for nearly 60 per cent of GVP.

Of all the sectors in Australia's broadacre agriculture the beef industry has the "worst" share of industry population to share of GVP ratio in the under $100,000 gross receiptscategory. This is significant from a policy perspective because if beef industry policy is targeted at the main group of producers it may only have a small effect on the industry. Conversely, if it is targeted at the major production component of the industry, it may not have much effect on the bulk of producers.

Table 4: Australian beef farms: selected measures by receipt class 1995-96

                                         Gross receipts                       

                         under $100 000   $100 000 to $200    over $200 000   
                                                000                           

Area (ha)                     1 735            10 810            83 751       

Beef herd (no.)                324              811               3 197       

Beef cattle sold (no.)         95               279               1 148       

Total cash receipts ($)      43 040           138 220            613 690      

Total cash costs ($)         46 050           118 950            501 540      

Farm cash income ($)         -3 010            19 260            112 150      

Farm business profit         -30 240          -18 710            59 380       
($)                                                                           

Rate of return (%)            -2.8              -0.4               3.0        

Farm capital ($                0.8              1.6                3.5        
million)                                                                      

Farm debt ($)                58 780           118 730            456 280      

Farm business equity           93                93                85         
ratio (%)                                                                     

Off-farm income ($)          20 200            15 040            20 910       


(average per farm)
Source: Australian Bureau of Agricultural and Resource Economics, Australian Farm Surveys Report 1997

Policy History

Despite its share of crises the meat industry has been the least regulated, at the Federal level, of Australia's major agricultural industries. This is due to several reasons. Meat production was not important as a specialist activity until the 1970s thus there was not the pressure for orderly marketing arrangements as existed in the wool and wheat industries. Furthermore, meat is not well suited to a home consumption price scheme because of the problem of physically separating product for different markets.(2) Thus the meat industry has always been based on private trading compared to the statutory monopoly arrangements in the wheat industry and the buffer stock scheme which operated in the wool industry for many years.

Following is a selected history of policy developments in the meat industry.

The Australian Meat Board (AMB) was first established under the Meat Export Control Act 1935 and reconstituted under the Meat Industry Act 1964 with membership being reduced from twelve to nine. The new Act also contained provisions for meat market development and diversification. This was in response to proposals from producer organisations.

The AMB had the power to regulate overseas marketing of meat and achieved this through a licensing system under which the AMB was empowered to control the kinds of meat exported and the destinations to which sales could be made. It also had the power to buy and sell meat for the purpose of administering international agreements and as part of activities to promote and develop export markets. Prior to 1967 the Board administered the fifteen year meat agreement with Great Britain and was associated with the development of access to the United States market.

The Australian Meat and Live-stock Corporation (AMLC) replaced the AMB on December 1 1977. It was established under the Australian Meat and Live-stock Corporation Act 1977. It also had limited trading powers, mainly for trading with centrally planned economies. The AMLC was also given responsibilities for livestock similar to those exercised for meat.

Also in 1977 the Government introduced the direct subsidy scheme known as the Beef Industry Incentive Payments. Assistance was paid in proportion to output, however, with the upturn in beef prices in mid-1978, the initial reason for the intervention had ceased to exist by the time the scheme was fully operational.

The next major reforms to meat marketing occurred in 1984 with new legislative arrangements taking effect from 1 July. Along with changes to the AMLC, legislation also established the Australian Meat and Live-stock Industry Policy Council (AMLIPC), the Inspection Policy Council and the Australian Meat and Live-stock Research and Development Corporation. The rationale for the creation of this organisational structure was to allow the AMLC to concentrate on, and confine its efforts to, commercial activities associated with market development and protection, improved marketing methods and the promotion of meat and livestock sales. Consequently, responsibility for general policy advice was removed from the AMLC's functions. This model was later adopted for the statutory organisation of other agricultural industries.

The 1984 amendments also introduced a strong corporate/commercial focus to AMLC operations with requirements for it to prepare Corporate and Operational Plans and hold Annual General Meetings. Further amendments in 1986 sought to enhance the statutory structure by removing unnecessary impediments to the AMLC's commercial effectiveness. The AMLC's requirement for detailed Ministerial approvals was reduced and replaced by provisions allowing the Minister to give it general directions with respect to the performance of its functions or exercise of its powers. The requirement for specific prior Ministerial approval for a number of functions, such as purchase of property, staff terms and conditions and borrowings up to $5 million, was removed.

In December 1994 the Government announced major changes to statutory arrangements for the meat and livestock industries. The most significant of these was the establishment of a new statutory body, the Meat Industry Council (MIC) to take over from the AMLIPC as the peak policy body. Under the Meat and Livestock Industry Act 1995, which came into effect on 1 July 1995, the MIC's key functions are to:

  • develop a vision and strategic direction for the industry;
  • formulate broad industry policy to be followed by the AMLC and Meat Research Corporation (MRC);
  • approve the strategic plans of these organisations;
  • set funding levels to be approved at industry AGMs;
  • develop directions for industry self regulation;
  • evaluate the AMLC's and MRC's programs;
  • nominate people for appointment to selection committees; and
  • develop a united approach to issues affecting the industry.

The Government stated in the Second Reading Speech to the legislation that:

the principle behind the reforms is to phase the government out of the statutory arrangements, through a staged approach of transferring greater responsibility for industry decision making to itself, and eventually moving to a non-statutory environment.

Accordingly the legislation included a sunset clause to the statutory structures of June 30 1998. In addition the legislation removed some significant functions and powers from the AMLC. These were:

  • funding of bodies for consultation purposes;
  • the power to trade in meat and livestock; and
  • the power to set conditions on the shipping of meat and livestock from Australia.

The government also stated its intention for a further review commencing not later than 1 July 1997.

Reform for the Future

This review was brought forward by the incoming Coalition government which established the Meat and Livestock Industry Reform Steering Committee and Task Force in May 1996. This body was asked to:

  • review the meat and livestock industry's current operational arrangements, including the costs and delivery efficiency of services provided by the AMLC, MRC and MIC;
  • develop options for future structures; and
  • and propose key meat and livestock industry policy and program actions to facilitate a more internationally competitive red meat industry in Australia.

This body presented its report, Australian Meat and Livestock Reform for the Future to the Minister in October 1996. The main principles behind its recommendations were that the Australian meat industry:

is moving inextricably towards more self-regulation and free market operations. The role of government is moving to more clearly defined core functions, but with improved strategic alliances with industry in delivering these functions. Competition policy has changed the means by which government functions are performed and will continue to do so.(3)

The major changes proposed were the separation of regulatory and industry service functions and the move to a non-statutory structure, with corporations limited by guarantee under Commonwealth Corporations Law. The report short-listed three options for the industry's corporate structure.

  1. Two corporations based on a split between beef and sheepmeat but with close voluntary operational linkages (the species split approach).
  2. A single meat corporation with four separate beef marketing, sheepmeat marketing, research and development and quality systems operational units.
  3. A single meat corporation with two separate beef and sheepmeat units (with research and development quality systems as components of the species units).

A majority of members of the Steering Committee and Task Force supported option (a) but a minority preferred option (b).

Another significant feature of the report was the proposal that under the corporate model, answerability for the levies and taxes would shift from specific statutory provisions to a combination of provisions in the Appropriation Act, Corporations Law, a Deed of Agreement between the Commonwealth and the relevant corporation, and the provisions of the Memorandum of Association and Articles of Association.

On the meat industry regulation front the report proposed the establishment of a new national agreement between the Commonwealth and States to co-ordinate regulatory policy, harmonise standards, and determine the level and structure of fees and charges for all non-contestable regulatory activities.

Note: Since the release of the report most debate appears to have centred on the institutional structures, control issues and size and use of levies. This is somewhat ironic and disconcerting given the report's observation that institutional structures are of much less economic and commercial significance than the returns to the industry from establishing the best possible policies and programs for the future.

Proposed Arrangements - Key Features

Note: The information contained in the following outline was extracted from Media Releases of the Minister for Primary Industries and Energy of 18 March 1997 and the Second Reading Speech to the Australian Meat and Live-stock Industry Bill 1997.

The reader should recognise that there is much about Australia's future meat marketing arrangements which is not provided for in the current legislative package and arrangements outlined by the Government. Many of the specific details will be contained in the MOU, the Deed of Grant and the Memorandum and Articles of Association of the Producer Corporation, Processor Corporation and Livestock Exporter Corporation. These will not be subject to Parliamentary attention but will be critical in determining the success of the policy. Of particular concern is the MOU, which is central to sectoral co-operation and hence the success of the Government's policy, but unenforceable.

Memorandum Of Understanding (MOU)

  • The MOU will consist of a statement of principles and supporting schedules outlining the new arrangement to which industry sectors have agreed to.
  • The MOU will commit all industry sectors to:
    • the principles laid down in the meat industry strategic plan; and
    • co-operative and co-ordinated activities in respect of food safety and quality, product integrity, and the AUSMEAT language.
  • The MOU will also cover those aspects of promotion and market services which are of mutual benefit to all sectors of the industry.
  • The MOU will outline intended joint function areas, core function areas, and set out the guiding principles for the operation of the Red Meat Advisory Council.
  • The MOU will primarily be an agreement between industry peak bodies and the federal Government.

Deed Of Grant

  • The Deed of Grant is an agreement between the federal Government and the Producer Corporation which will set out the conditions upon which levy monies and matching funds are passed to the Producer Corporation and how they may be applied.
  • The Deed of Grant will specify accountability requirements.

Producer Corporation

  • Establishment of a Producer Corporation.
  • The Producer Corporation will provide a range of services to the Australian meat and live-stock industry including professional guidance, service delivery and advice. The Producer Corporation will also develop initiatives and proposals and advise industry and government on key industry issues.
  • All sectors of the industry will independently enter into contracts with the Producer Corporation for specific services.
  • The Producer Corporation will have discrete operating units with responsibilities for research and development, food safety, integrity of description and eating quality, maintenance of AUSMEAT language, and marketing and promotion. There will be separate operating units for beef and sheepmeat marketing and promotion.
  • The Producer Corporation will be funded through cattle, sheep and goat producer levies.
  • The Producer Corporation will be administered by a single board. Initially the board will be nominated by a selection committee drawn from nominees of producer organisations. Future selections will be determined by levy payers and the Minister. The Board will have responsibility for all jointly funded research and development, food safety and quality activities, including grading and maintenance of the AUSMEAT language and a range of related market access issues. The Board will be accountable to an Annual General Meeting (a 66% majority of votes will be sufficient to dismiss the Board) and through external audits.

Red Meat Advisory Council

  • Establishment of a Red Meat Advisory Council.
  • The proposed functions of the Red Meat Advisory Council are:
  • to provide advice to the Minister;
  • to be the custodian of the MOU and Meat Industry Strategic Plan;
  • co-ordinate, develop and assess the performance of the Meat Industry Strategic Plan;
  • to be the trustee (within a deed of trust) for industry reserves currently held by the statutory corporations and ensure the investment of those monies; administer arrangements to fund peak industry councils, including the distribution of funds (from investment reserves) to peak councils; and
  • to provide an interface for resolving sectoral differences or problems.
  • The framework in which the Red Meat Advisory Council will operate will be agreed to in the MOU.
  • The Red Meat Advisory Council will be funded by peak industry organisations.
  • The membership of the Red Meat Advisory Council will comprise peak industry organisations. The Directors of the six peak industry councils will be voting members of the Red Meat Advisory Council and representatives of processor and livestock exporter corporations will be participants.

Peak Industry Councils

  • Peak industry councils will carry responsibility for decisions on levels of levies and non-statutory funding for the Producer Corporation.
  • Peak industry councils will carry responsibility for the development of their sector of the Australian meat and live-stock industry's input into the Meat Industry Strategic Plan and implementation.
  • Peak industry councils will receive certain funds from investment of industry reserves.

Processor Corporation

  • Establishment of a Processor Corporation.
  • The role of the Processor Corporation will be to negotiate and co-ordinate participation in collective core functions to be carried out in partnership with the Producer Corporation.
  • Processor involvement in industry activities will be through a system of willing partnerships.
  • In respect to funding, processors will contribute agreed amounts to core collective function funding, but will not be obliged to fund all promotional or other projects which they perceive to be of no benefit to them.
  • The Government will re-impose levies to fund agreed activities if processor contributions fail to materialise.

Livestock Exporter Corporation

  • Establishment of a Livestock Exporter Corporation.
  • The role of the Livestock Exporter Corporation will be to negotiate and co-ordinate participation in collective core functions to be carried out in partnership with the Producer Corporation.
  • Livestock exporter involvement in industry activities will be through a system of willing partnerships.
  • In respect to funding, processors will contribute agreed amounts to core collective function funding, but will not be obliged to fund all promotional or other projects which they perceive to be of no benefit to them.

The federal Government will re-impose levies to fund agreed activities if processor contributions fail to materialise.

Main Provisions

Control of meat and live-stock exports

Definitions

Clause 7 provides definitions of certain of the terms used in proposed Part 2. Major definitions include:

  • cattle producer - a person engaged in raising or fattening cattle;
  • exporter - a person engaged in exporting meat or live-stock;
  • live-stock producer - a person engaged in raising or fattening live-stock; and
  • premises - any place, vehicle, vessel or aircraft.

Note: The above definitions are identical to those in section 52 of the Meat and Live-stock Industry Act 1995 which will be repealed by the Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Bill 1997.

Clause 8 provides a definition of meat or live-stock export business. Basically, a person will be taken to be a participant, or who would be a participant, in the management or control of a meat or live-stock export business, or proposed meat or live-stock export business, of another person if:

  • they have or would have the power to direct the operations, or an important or substantial part of the operations, of the business or proposed business; or
  • they have or would have the power to direct someone who has the power to direct the operations, or an important or substantial part of the operations, of the business or proposed business.

The meat export business of a person includes operations connected with the slaughtering of animals, dressing of carcases, or the treatment, packing, carriage, handling or storage of meat (including meat unfit for human consumption) that either are, or are proposed to be, carried out wholly or partly in connection with the business.

Note:The above definition of meat or live-stock business is identical to that contained in section 60 of the Meat and Live-stock Industry Act 1995 which is being repealed by the Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Bill 1997.

Export licences

Division 2 of Part 2 of the Bill (clauses 10-25) deals with meat and live-stock export licences. The major provisions:

  • Provide the Secretary (ie. the Secretary of the Department of Primary Industries and Energy) with power to grant an export licence (clause 10).
  • Require that the Secretary not grant an export licence unless satisfied that certain requirements are satisfied, including that the person or corporation seeking the licence is of integrity, competent to hold a licence and of sound financial standing (clause 12).
  • Provide, where a grant is refused, that notice of the decision be given to the applicant and such decision be reviewable by the Administrative Appeals Tribunal (clauses 13-14).
  • Provide the Secretary with power to make and give certain orders and directions that must be complied with by export licence holders. Orders and directions may be made with respect to matters including the quality, standard and grading of meat and live-stock, the terms and conditions of the sale of meat and live-stock, and the sale and distribution of meat and live-stock after export. Orders and directions may prohibit or require certain actions of export licence holders, including not exporting, or offering for sale for export, meat or live-stock, or requiring export licence holders to obtain prior approval from the Secretary for each export, or each export of a particular kind (clause 17). This provision is subject to disallowance by the Parliament (clause 19).
  • Where the Secretary considers it necessary or desirable to ensure that Australian producers receive a fair return for their produce, he/she may prohibit, either absolutely or unless particular conditions are complied with, the export, or sale for export, of meat or live-stock to a monopoly importer (clause 18). These powers may also be exercised where the Secretary is satisfied that use of the powers would be good for the development, or further development, in a foreign country, of a market for meat and live-stock and would be in the best interest of the meat and live-stock industry. This provision is subject to disallowance by the Parliament (clause 19).
  • Provide the Secretary with power to cancel or suspend export licences in certain circumstances, including where the export licence holder has ceased to be a person or corporation of integrity, or have breached a condition of an export licence. A notice of suspension of cancellation, must include reasons for the decision and be given to the export licence holder. Decisions to suspend or cancel an export licence are subject to review by the Administrative Appeals Tribunal (clauses 23-24).

Note: Power in relation to export licences is currently vested in the Australian Meat and Live-stock Corporation. Under the proposed amendments this power will vest in the Secretary. Apart from this major difference, the effect of the provisions is identical to those contained in subdivision B of Part 3 of the Meat and Live-stock Industry Act 1995, which is being repealed by the Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Bill 1997.

Export Quotas

Division 3 of Part 2 of the Bill (clauses 25-33) deals with meat and live-stock export quotas. The major provisions:

  • Provide the Secretary with power to establish and administer export quotas, including in relation to the body that is to administer the quotas, the time for which quotas are to operate, the way quotas are to be allocated, the transfer of quotas, or parts of quotas, and the surrender or cancellation of quotas, or parts of quotas (clause 27).
  • Provide the Secretary with power to cancel a quota, or part of a quota, and vary the period of validity of a quota, the quantity or description of goods covered by a quota, and the condition or conditions attaching to a quota (clause 28).
  • Provide that where a quota was bought and subsequently cancelled, or varied, so as to reduce the rights granted by the quota, the Commonwealth, at the Ministers discretion, can reimburse the holder a proportionate amount of the sale price (clause 29).
  • Provide that decisions of the Secretary cancelling a quota or part of a quota, varying a quota, or refusing to vary a quota on application of a quota holder, are subject to review by the Administrative Appeals Tribunal (clause 30).
  • Require holders of export licences to comply with subsection 5(2) of the Australian Meat and Live-stock (Quotas) Act 1990. That subsection requires export licence holders to comply with a notice limiting the amount of goods, or a specified class of goods, that may be exported to a specified country (clause 31).

Note: Power in relation to export quotas is currently vested in the Australian Meat and Live-stock Corporation. Under the proposed provisions this power will vest in the Secretary. Apart from this major difference, the effect of the provisions is largely identical in effect to those contained in subdivision C of Part 3 of the Meat and Live-stock Industry Act 1995, which is being repealed by the Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Bill 1997.

Enforcement

Division 4 of Part 2 of the Bill (clauses 34-57) contains standard compliance monitoring provisions relating to the powers of inspectors to search premises, seize things and require the giving of information or production of documents. Proposed Division 4 of Part 2 contains a number of significant offence provisions including:

  • It is an offence, punishable by a maximum term of five years imprisonment, for a person who is not the holder of a meat or live-stock export licence to intentionally, and without reasonable excuse, to export meat or live-stock from Australia (clause 54).
  • It is an offence, punishable by a maximum term of twelve months imprisonment, for a person who is not the holder of a meat or live-stock export licence, without reasonable excuse, to intentionally or recklessly hold themselves out as a licence holder or as someone who can export meat or live-stock from Australia. The same penalty will apply to non-licence holders who without reasonable excuse, intentionally or recklessly contract to export meat or live-stock (clause 56).

Note: The effect of the proposed provisions is largely identical to those contained in Division 7 of Part 3 of the Meat and Live-stock Industry Act 1995, which is being repealed by the Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Bill 1997.

Industry Marketing and Research Bodies, and Approved Donors

The Minister is accorded power under clauses 60-61 to declare a body to be either the industry marketing body, industry research body, both a marketing and research body, or an approved donor. Declarations are subject to certain pre-conditions, including:

  • that the body or donor is a corporation limited by guarantee under the Corporations Law;
  • after regard to the body or donor's membership, company documents and any undertakings it has given, agreements or arrangements it has entered into, whether it can appropriately represent the industry's marketing, promotion, and research and development interests; and
  • that the body or donor has consented to the declaration.

Ministerial declarations are subject to disallowance by the Parliament.

Note: The declaration of a body to be either the marketing or research body is important because only declared bodies will be recipients of levy/charge amounts or be eligible to receive Commonwealth matching research and development funds.

Division 3 of Part 3 of the Bill (clauses 63-68) deals with the financing of the marketing and research body and the purposes funds can be put to.

Marketing body funds comprise amounts of levy and charge receipts received by the Commonwealth. Research body funds comprise:

  • levy and charge receipts received by the Commonwealth; and
  • amounts, from the Commonwealth up to 50% of research body expenditure on industry research and development and amounts received from approved donors for industry research and development, or up to 0.5% of the gross value of production of the meat and live-stock industry, which ever is less (clauses 63-64 & 66).

Marketing and research body funds can only be used for particular purposes, including payments to the Commonwealth for costs relating to the collection of levies and charges, industry marketing and promotion, research and development, and such other purposes as are prescribed. Prescribed allowable purposes are subject to disallowance by Parliament (clause 67).

Ministerial directions

Clause 69 provides the Minister with power to direct a prescribed body (ie. a marketing or research body, or an industry body prescribed by regulations made under the proposed Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Act 1997 while it holds money paid it in accordance with that proposed Act) to do certain specified things. Directions can only be given where the Minister is satisfied it is in the national interest to do so, and prior to giving the direction, the Minister has given the directors of the body an adequate chance to discuss the matter with him/herself. Directions must relate to one or more of the following:

  • trade and commerce with other countries, and among the States;
  • quarantine;
  • foreign corporations, or trading or financial corporations formed within the Commonwealth;
  • external affairs; or
  • any matters with respect to which the Parliament has constitutional power.

A direction must not require the body to incur expenses greater than amounts paid to it under this proposed Act and the proposed Australian Meat and Live-stock Industry (Repeals and Consequential Provisions) Act 1997.

Directions must be tabled in each House of the Parliament within 15 sitting days of the directions being given, except where the Minister determines that tabling would, or would be likely to, prejudice the body's commercial activities, or would, or would be likely to, prejudice the national interest.

Note: While clause 69 has substantially the same effect as the current section 221 of the Meat and Live-stock Industry Act 1995, it may be noted that it is proposed to increase the period within which directions must be tabled in the Parliament from 6 sitting days to 15 sitting days. No rationale is provided in either the Explanatory Memorandum or the Second Reading Speech to the Bill for this increase.

Concluding Comments

Above all is the need for industry to develop a shared vision for the future which enables all segments to pull together and take advantage of the opportunities that have been identified.(4)

On aspect where there is no dispute is that there is not unity within the meat and live-stock industry on these changes. Not only was their division between members of the Steering Committee and Task Force but the Minister has readily expressed regret that industry has not been able to reach full consensus on the new structures. Further, these proposals have attracted strong criticism from the former Chairman of the AMLC and a number of other industry leaders. These have been widely reported in the rural media.

It needs to be remembered that the meat marketing scheme now being proposed had its genesis in the 1995 arrangements described above. It is doubtful, however, that anyone in the industry envisaged then the system now being proposed.

One somewhat curious element is the contribution ascribed to the 1994 Industry Commission (IC) report into Meat Processing. Both in 1995 and currently this report is cited as a factor in the announced changes. However, the report primarily dealt with the processing sector and the only change recommended by the IC in relation to the industry's statutory bodies was the establishment of a Meat Industry Review Authority under the AMLIPC to evaluate AMLC and MRC programs. While a merger of the AMLC and MRC was suggested as a way of producing savings and closer coordination, it was also acknowledged that there were valid reasons for them not to be merged.

There is much about Australia's future meat marketing arrangements which is not provided for in the current legislative package. Many of the specific details will be contained in the MOU, the Deed of Grant and Memoranda and Articles of Association. These will not be subject to Parliamentary attention but will be critical in determining the success of the policy. Of particular concern is the MOU, which is central to sectoral cooperation and hence the success of the Government's policy, but unenforceable.

Endnotes

  1. This section is based closely on ABARE's Australian Farm Surveys, Report 1997.
  2. Watson A.S. and R.M. Parish, Marketing Agricultural Products in Agriculture in the Australian Economy, D.B. Williams (Ed), 2nd edition, 1982
  3. Australian Meat and Livestock Reform for the Future: xix
  4. Dr Geoff Miller (then) Secretary of the Department of Primary Industries and Energy, writing in the foreword to Australian Beef.

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Ian Ireland and Peter Hicks
4 November 1997
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 1997

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Last updated: 11 November 1997

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