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OPTIONS FOR REFORM

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What are the implications of the possible reform options shared with the taskforce? 1 0

The Taskforce review process indicates that in order to support the industry to grow and prosper and respond to the challenges of the 2020s and beyond, a new way of doing business may be required. In particular, this relates to the way the Red Meat MoU - and by extension how its various signatories and service providers operate and relate to each other - will need to be considered.

An output of this review process will be a decision paper, or White Paper, which sets out the Taskforce’s advice about what governance arrangements are needed that can support an effective, coordinated and consistent approach by industry.

Here are the options that were shared with the Taskforce, during the consultation.

What do you think?

Option 1: Improvements to the existing MOU

Basic architecture

  • A disparate group of supply chain segments for red meat production, processing and retail subject to systematic and ongoing Government and regulatory intervention because of market failure.
  • Options would involve specific and piecemeal changes including a re-write in plain English to the MoU, but leaving existing provisions in place.
  • This option builds on the achievements of the past 20 years.

Functions

  • As now, with changes to specific areas

Funding

  • As now, but with potential revisions to the way the Red Meat Fund is utilised, sunset on levies and private investment.

Whole-of-supply-chain focus?

  • MISP continues to be the focal point of whole of supply chain planning, but continues to undergo process reforms and streamlining.

Self-determination

  • Industry continues to have the same level of self-determination as present.

Timing

  • Piecemeal reforms can be undertaken almost immediately and evolve over time.

Advantages

  • Removes the requirement for complicated negotiations around new industry structures.
  • Focuses industry efforts on communication, advocacy and education rather than structural change, which may drive industry buy-in quickly.
  • Maintains current focus on self-determination.
  • Arrangements balance the diversity of the industry with the need for unified industry responses.
  • Allows some level of industry unity, while protecting specialised expertise in industry subsectors.
  • Redrafting and review of MoU could focus on developing clearer roles and responsibilities, better and more streamlined oversight mechanisms, better information sharing etc.
  • Allows current reforms to MISP and other efforts to align industry to continue.
  • Continued protection of quality standards to current levels.
  • Reduces inertia or flux during national debate about industry standards
  • Would allow the protection of specific parts of the industry by piecemeal revisions to the existing MoU.

Disadvantages

  • Does not allow for a reconceptualization of the industry as a food protein supply chain or similar.
  • Unlikely to improve response times for major issues.
  • No greater capacity to deal with whole of industry responses.
  • May mask complacency in industry to address key structural challenges
  • Without significant redrafting, it is unlikely to remove the duplication of services, although these could be managed by the respective organisations in the sector.
  • May do little to remove delays due to burdensome governance arrangements
  • No greater mechanisms to promote/enforce industry standards
  • No greater ability to promote “whole of supply chain” branding etc
  • Does not address entrenched divisions between segments of the supply chain
  • Unlikely to improve industry’s ability to divert resources to areas of greatest need.
  • No ability to deal with potential reforms to RDC framework, reduction in number of PICs etc
  • No greater ability to promote industry-wide adoption and commercialisation of R&D
  • Unlikely to have a material impact on industry’s ability to pre-empt emergent issues.
  • No greater ability to respond to crises or manage issues than current arrangements.
  • No greater ability to regard successful businesses.

 

Option 2: Law of the jungle

Basic architecture

  • Clean the slate to include the removal of RMAC, leaving the three service providers and the management of the respective supply chain silos via individual trust funds, or similar.

Functions

  • Beef, sheep and goat meat all manage their own supply chain issues individually.

Funding

  • Break up the current Red Meat Fund.
  • Establish silo-based trust funds.
  • Could draw on industry reserves for start-up funds for each organisation.

Whole-of-supply-chain focus?

  • Would rely on a research body with supply chain segments that has a greater focus on adoption of supply chain outcomes (food sales) with a clear accountability framework.

Self-determination

  • Promotes independence but removes any capacity for industry to determine issues on “whole-of-supply-chain” basis.

Timing

  • The removal of the current arrangements would happen as soon as practicable and the industry would evolve over time, establishing new relationships and arrangements

Advantages

  • Removes the requirement for complicated negotiations around new industry structures.
  • Rewards successful sectors and businesses.
  • Arrangements balance the diversity of the industry with the need for unified industry responses.
  • Absolutely removes any duplication of services, although these could be managed by the respective organisations in the sector
  • Reduces inertia or flux during national debate about industry standards.
  • Industry wants to reward successful businesses and attract money to the areas of greatest need.
  • This option relies on the market – the “law-of-the-jungle”– to ensure this.

Disadvantages

  • Does not allow for a reconceptualization of the industry as a food protein supply chain or similar.
  • Without industry coordination mechanisms, the role of government could become stronger.
  • Unlikely to improve response times for major and cross industry issues.
  • No greater capacity to deal with whole-of-industry responses.
  • No greater mechanisms to promote/enforce industry standards
  • Does not address entrenched divisions between segments of the supply chain
  • No greater ability to promote industry-wide adoption and commercialisation of R&D
  • Unlikely to have a material impact on industry’s ability to pre-empt emergent issues.
  • No greater ability to respond to crises or manage issues than current arrangements.
  • No greater ability to reward successful businesses.

 

Option 3: A hybrid option

Basic architecture

  • Merging of the functions of service providers and peak industry councils with access to levy funds and representation, shared between organisations.

Functions

  • Three organisations arranged around industry (but not animal) silos – meat and livestock, live export and processing.
  • A combination of marketing, public policy, industry representation and community relations.
  • Funding Funding arrangements and partnerships continue to be brokered between the new supply chain-oriented organisations for “whole-of-supply” chain responses.

Whole-of-supply-chain focus?

  • Intensified ability to manage issues for individual areas – Meat and Livestock, Live Export and Processing.
  • Similar ability to manage whole-of-supply chain responses to current arrangements.

Self determination

  • Equivalent ability to determine industry issues as current arrangements.

Timing

  • It would demand agreement that changes would need to be made to institutional arrangements but may have to be done over a five-year timeframe or more to ensure that consensus emerges.

Advantages

  • Arrangements balance the diversity of the industry with the need for unified industry responses.
  • Increase ability to promote industry-wide adoption and commercialisation of R&D
  • Likely greater mechanisms to promote/enforce industry standards
  • Improved ability to promote “whole of supply chain” branding etc
  • Positive impact on industry’s ability to pre-empt emergent issues.
  • Positive impact on industry’s respond to crises or manage issues than current arrangements. 

Disadvantages

  • May pre-empt broader reform agenda across RDCs, and similar organisations.
  • Does not allow for a reconceptualization of the industry as a food protein supply chain or similar.
  • Without industry coordination mechanisms, the role of government is likely to be stronger.
  • Unlikely to improve response times for major issues.
  • No greater capacity to deal with whole of industry responses.
  • Does not address entrenched divisions between segments of the supply chain.
  • No greater ability to reward successful businesses.

 

Option 4: A revitalised red meat industry led by a new organisation

Basic architecture

  • A new and unified red meat industry able to promote the safe and ethical production, processing and consumption of red meat in Australia and the world.

Functions

  • A combination of marketing, public policy, industry representation and community relations.

Funding

  • Industry transitions to a self-determination model outside of service provider levies and current RMAC funding.
  • Could be funded from the Red Meat Industry Fund and fund, marketing levies and a to-be-developed commercial arm.
  • Could draw on industry reserves for start-up funds.

Whole-of-supply-chain focus?

  • Cross supply chain thought leadership + strategy
  • Coordinated policy + advocacy
  • An RMAC-like organisation empowered to deliver this service on behalf of the red meat supply chain, with consideration of broader food and protein roles.
  • Would rely on a research body with supply chain segments that has a greater focus on adoption of supply chain outcomes (food sales) with a clear accountability framework.
  • Incentives and rewards for cross supply chain collaboration i.e. the collaboration premium.
  • Strong ability to enforce industry-wide standards and codes of conduct.

Self-determination

  • Allows greater self-determination by industry taking greater responsibility for issues – the buck stops with industry!
  • A structure to step away from government and be wholly industry-led (i.e. a non-statutory Pty Ltd).

Timing

  • The removal of the current arrangements would happen as soon as practicable and the industry would immediately commence building a new architecture to guide the red meat industry.

Advantages

  • A bold initiative which allows government, industry and the community to reset the industry and move away from the practice of the past.
  • Broad in principle support from a cross section of industry.
  • Could involve streamlined governance arrangements which reflect current and future industry needs
  • Governance arrangements which are agile, easily understood and have broad industry buy-in
  • Continued focus on self-determination
  • Mechanisms for enforcing industry standards
  • A mechanism which recognises that the red meat industry is a food protein supply chain
  • Arrangements which balance the diversity of the industry with the need for unified industry responses
  • Clearer roles and responsibilities

Disadvantages

  • Wholesale reform which may lead to flux, industry fragmentation etc.
  • May take five or more years to establish.
  • May be perceived as a takeover by one industry group or organisation
  • No industry consensus on what form it would take.
  • Unclear where brand leadership, commercialisation, research and adoption would fall.
  • Funding bases yet to be determined, but would likely involve a combination of sources
  • Increases self-determination but also intensified industry’s need to manage issues.
  • Industry would need to whitelist issues that would fall within the remit of this organisation.

Option 5: Is there another option for reform?

These options for reform are based on stakeholder feedback during our consultations. The Taskforce recognises that the ultimate model for change, if warranted, may involve elements of the above spectrum of options. It may also comprise components the Taskforce and its stakeholders have not shared in recent months.

If respondents to this Green Paper believe there are other components that need to be considered by the Taskforce, we encourage them to make a formal submission, which outlines industry needs and posits workable options for change.

 

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