The Cattle Council of Australia (CCA) has agreed on a new set of principles to guide the future management of the US beef quota.
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CCA president Keith Adams presented the principles in a submission yesterday [Monday] to a public hearing of the Senate Rural and Regional Affairs Committee in Canberra.
“Every model being considered by industry and government for the management of export quota entitlement for the US should be measured against an agreed set of principles”, Adams said: “It’s this approach, and recognition that all markets are for the benefit of the entire industry, that prompted the CCA to agree on the following seven principles.
“A quota management scheme must:
*ensure that Australia optimises its access to all markets, including the US market, in terms of product and returns;
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By GlobalData*be transparent, simple and provide equity to producers, processors and exporters across all regions;
*retain some degree of flexibility to manage new entrants and unforeseen events, but minimise the requirement for administrative decisions;
*allow, as far as possible, market forces to work and avoid the development of monopolies and other distortions;
*ensure that the quota is optimally utilised. The availability of quota should be spread throughout the year in line with normal trading patterns;
*ensure that competition is maximised for the purchase of cattle; and
*provide certainty for sound planning well ahead and avoid changes at short notice that corrupt commercial decisions made in good faith to comply with the scheme.”
Referring to a proposal for auctioning of quota entitlement, CCA executive Director, Justin Toohey, told the Committee that the Council felt some responsibility for ‘thinking outside the square’, to provide alternative options to existing proposed schemes.
“The auction system is one of a number of potential scenarios for quota management. There is a range of auction systems operating throughout the world, so it is a well worn path”, Toohey said.
“Under an auction system, collection and distribution of ‘rent’ and market dominance are the two major issues requiring a solution. These are currently being examined”, he said.
“The best model from the producers’ perspective would be one that ‘squeezed’ rent out of half a dozen processor bank accounts into thousands of producer bank accounts throughout the country. After all, every producer is currently paying the price for the market restriction into the US”.
