MLA’s plan to use $150m from levy payers under fire

28-Nov-2016 - Last updated on 28-Nov-2016 at 13:20 GMT

MLA was keen to stress that a final decision on project finance has not been made

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Meat and Livestock Australia’s (MLA) plan to use AU$150m from its members to install X-ray carcase grading technology is facing pressure from the Australian Beef Association (ABA).

David Byard, executive officer of the ABA, told this site he couldn’t understand why MLA has suggested using levy funds to pay for objective carcase measurement (OCM) technology.

“I feel that producers should not be funding this; it is something processors should be doing. I simply do not see why producers should be paying for this,” he said.

However, MLA has responded by stating no decision has been made on how to finance the ambitious project. One avenue is to use a commercial loan, but Australia’s deputy prime minister and agriculture minister, Barnaby Joyce, is also believed to be supportive of alternative revenue options. MLA told this site a discussion needs to be had with the industry regarding payment of the project.

Questions to be answered

Aside from who pays for the project, Byard said there were a number of “unanswered questions” with regards to the installation of OCM technology nationwide. He has called on MLA to produce a detailed business plan for the investment.

He also wanted MLA to explain how the technology would add value to Australian meat producers and get a “definitive view” from processors before “rushing in” and adopting the technology. Byard has suggested a better strategy might be to get one machine up and running to analyse how it worked before rolling out the scheme nationally. This, he said, would help to ensure producers did indeed get value for money from the investment.

Despite the criticism from the ABA, the carcase scheme has been positively received by the Cattle Council of Australia (CCA). “We have been pushing for objective carcase measurement and see the technology as another positive step in the red meat industry’s ongoing push for objective carcase measures - rather than subjective,” said CCA board director David Hill.

MLA announced its plan to roll-out “revolutionary” carcase grading technology, used for measuring the balance of fat and meat, on 10 November at its annual general meeting. The AU$150m loan, possibly from levy payers, would be used to finance the one-off cost of installing Dual Energy X-ray Absorptiometry (DEXA) machines in 90 slaughterhouses. The plan is to roll out the machines in 2017.

MLA said the long-term plan was that the investment would significantly reduce the meat industry’s derided and expensive carcase grading system.