In regards to the MLA restructure, my main concern is fairness of allocation for voting rights.
After reading the submissions to the Industry structures and systems governing levies on grass-fed cattle that has been held in 2014, I was under the impression that most, if not all of the private submissions were of the same opinion as me, the voting system is not equitable for the majority of producers.
Submissions can be viewed here, there are only 188 submissions published. According to the Australian Beef Association 530 submissions were received but many not published as they were deemed as repeats or bulk entries.
Quiet simply a levy is paid for a beast at point of sale from one entity to another. If a processor purchases cattle and holds them for a period of 60 days or more they are required to pay a levy on that animal and thus allowed voting entitlements at MLA General meetings. Producers on the other hand often have animals for life or at least much longer than 60 days, and handle much smaller numbers. It is the law that we pay levies.
In 2014 there were 41,334 Grass fed Cattle members of MLA. In 2008 the top 50 entitled vote holders held nearly 6 million of the votes eligible for that years voting. The top 20 of that group of 50 held 67.2% of those 6M votes. As far as I can make out 9 of them were processors. Nearly 22% of the top 50 were foreign-owned. I obtained these figures from the submission sub184_AMPG&CCP_attch1. Keep in mind that this article quotes figures from 2008, some processors have amalgamated since then
MLA put their resolutions forward over the last few days for consideration at the coming AGM. There was no mention of changing the allocation of voting rights and I think there should be.
Under the current system of MLA voting entitlements, entities who sells up to about the 5,750 head mark receive a full 1 vote entitlement to every $1 in levy they have paid
- 100 adult cattle per year $500 levy would have 500 voting rights
- 300 adult cattle per year $1,500 – 1,500 votes
- 5,000 adult cattle sold – $25,00 – 25,000 votes
After $29,088 of levies paid the entitlement is reduced from $1 per levy paid to $0.75 above the $29,088.
- 6,000 cattle sold, $30,000 levies paid – the entity would receive 28,750 votes
- 8,000 cattle sold – $40,000 – 37,272 votes
- 10,000 cattle sold $50,000 – 44,772 votes.
According to the #184 submission only 50 MLA voters in 2008 were above this threshold of 10,000 head.
To place this in some degree of visual perspective I made the following chart which shows the entitlement ratios of different production systems, they levies paid and their relevant voting entitlements according to those levies.
For instance if an organisation that sold 100 cattle wanted to vote in a resolution their vote would squarely match another producer who also sold 100 head and had 500 voting rights as a 1:1 ratio.
If the same 100 head producer (500 voting rights) wanted to vote against an entity who sold 1,000 head, then it would take the equivalent of 10 of the smaller producers to outvote the larger entity. Fair enough, producer against producer vote is OK.
I don’t have a problem with the current scale of voting being used, it is there for a reason. That being it simply wouldn’t be fair if a producer who sold 5 head as a hobby sideline had the same voting rights as a person who sold 10,000 as their only income and asset base.
My problem is when the entities are above the 10,000 head voting entitlement they can literally outvote anyone and everyone with little or no hinderance. Especially as so few people actually register to vote, not because they are lazy in my opinion but they feel their vote is so overpowered and useless then why bother to register if they are not being listened too.
For instance if a resolution is supported by a seller who has the equivalent of 100,000 cattle, If a processor, after ownership of 60 days in one year their voting entitlement would be 279,088 votes ($500,000 in levies paid). If a producer of 500 sale cattle wanted to vote against them, they would need the equivalent of 112 other like-minded, similar sized or larger entities to also agree. Not only to be in agreement to vote the resolution but to actually register to be allowed to vote.
My idea is to keep the current scaling system but to implement a ceiling, in which once a maximum number of vote entitlements are reached then irrespective of how many animals are sold the entitlements to more votes do not increase for that holder.
I have used the ceiling in the chart as purely an example, the shaded purple area, that being 10,000 head. It is simply a figure I felt that would enable larger producers to have strong voting rights which they should have, and also where I think the majority of the cattle producers would be production wise within Australia.
If you are a producer and you do want more say in MLA then first things first you have to register to vote, it is not automatic. This must be done by the 2nd of October to receive your voting entitlements.
You can submit you registration on-line at MLA voting registrations