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30 June 2009

Dear ABA Member,

I take this opportunity to thank you for the continued financial support of the ABA. This support has enabled us to continue the fight for the rights and profitability of all cattle producers.

Understandingly, if agricultural policies were driven by voluntary membership, rather than forced levy funded Peak Councils, there would be no need for the ABA, however unfortunately, this is not the case. So far we have been unable to wrestle policy control from the Peak Councils, however in the ‘David and Goliath’ struggle, Goliath is getting weaker. Last financial year saw a $ 6.5 million loss from the Levy Reserve Fund, falling from $ 51 million to $ 44.5 million. This fund is managed by RMAC (Red Meat Advisory Council) provides the bulk of the income for the Peak Councils, who in turn, provide funding for the NFF. As the full impact of the financial crisis impacts on their investments, a further fall in the Levy Reserve Fund can be safely predicted.

By comparison our small ABA finances are administered very conservatively. We managed to place $25,000 in a term deposit last year, surplus to our immediate requirements and continue to run a lean operation, thanks mainly to the efforts of our unremunerated Directors.

Our solid financial position has enabled us to improve research capabilities and the collection of data on the true health of the cattle industry and more specifically the beef production sectors.

ABA NLIS Report

It is no secret that the ABA has opposed to the introduction of RFID tags as a means of tracking cattle. While our initial opposition was based on cost (so far producers have spent over $370 million on tags and reading charges with governments injecting a further $40 million in the scheme) as the NLIS was bedded down, we realised that it wasn’t working.

Of the ABA Directors that had audited their own accounts, on average 27% had lost traceability.

From experience, we predicted that legislators would ignore this fact and instead of acting on our advice, they produce reports such as Cowcatcher 1 and 2 that did not accurately reflect what was happening with the NLIS data-base and promoting these reports as evidence that all was fine with the database and traceability.

Frustrated by the perception that NLIS was working based on deception from the Governments, we decided to employ consultants to properly audit the NLIS database and report their findings to the ABA.

Agribusiness Online was employed by the ABA to conduct an audit of a sample of Property Identification Codes (PICs) to establish the efficiency of NLIS. The auditors Paul Evans and Scott Paterson were given access to 17 PICs and their database accounts involving the movements of 56,905 cattle.

This report was released to the media on the 18th June and is the most comprehensive audit yet conducted on the NLIS database.

The findings concluded that of the sample analyised 34.4% of the cattle had lost their whole of life traceability at the time of slaughter. This high loss rate renders NLIS basically impotent, as a disease control measure and increasing the level of food safety going through to the consumer.

When the data is analysed on a year by year basis Scott Paterson and Paul Evans found that the situation is only getting worse. Agribusiness Online is currently auditing the paper trial or NVD efficiency in tracing cattle and preliminary results have indicted this is far more accurate means of tracking cattle.

We hope to reproduce a copy of the main findings of the Audit in our next Journal, or you can go to our website to access a full copy of the initial Report.

MLA Levy Vote

Over the coming months cattle producers will have the opportunity to vote on the cattle transaction levy. A poll for non-MLA members will be held in conjunction with a vote for producers at the MLA AGM in November.

The recommendations by the Levy Review Committee of a retention of the $5 levy is based on unsubstantiated evidence. The original reason for the increased levy in 2005 was a predicted rise in beef production of 335,000 tonnes.

This has not eventuated. Despite additional expenditure as our key markets of Japan, South Korea and the domestic market, our market share has dropped along with local consumption over the 4 years of the increased levy.

In 2004, before the introduction of NLIS LPA and 40% increase in the levy, cattle prices were 11% higher than they are now. The MLA is failing in their charter. We advise our members to vote down the levy in November again. We will be asking you to collect your votes and nominate the ABA as your Proxy.

Again, I thank you for your continued support of the ABA and hope that you can renew your membership for 2009 – 2010. Extra costs such as the Audit, although money well spent, has cost us $10,000 so your patronage is vital to bolster our finances.

At this stage we are considering holding our AGM in Darwin the day before the MLA AGM, which is being held on Thursday 19th November 2009. We realise that distance will make it difficult for many to attend. However, if you have any issues you wish to raise with us please contact me, your regional ABA Director, or Sally at the ABA Office.

We would appreciate feedback to where you would prefer us to hold our AGM, if not in Darwin. Would central NSW sometime in September be more suitable? Please let us know.

Yours sincerely,

Brad Bellinger
Chairman ABA