SA sheep and cattle producers should be alarmed at some of the proposed changes to the independence of the Sheep Industry Fund and Cattle Industry Fund Boards.
The SIF and CIF Boards are independent Boards that administer the grower transaction levy.
They do not make policy; however, they do make recommendations for the expenditure of the levy to Livestock SA which in turn passes those recommendations on to the state Government.
In the 24 years since growers have paid levies neither the SIF or its predecessor the SA Sheep Advisory Group (SASAG) have ever had any recommendations rejected by the government.
The current model is unique to SA and is the envy of every other state.
LSA was deliberately set up differently to other advocacy groups (grain and pigs) due to the number of potential contentious issues it can encounter with animal welfare, stock diseases and a raft of other issues which can lead to levy payer unrest and a run of refund requests.
LSA propose to "consolidate "(abolish) the current separate SIF and CIF Boards, Biosecurity & Animal Health & Welfare Committee (BAHWAC), and Blue Print committees into a single 'Livestock Advisory Committee'.
The new model provides for Livestock SA to have direct access to grower levies via its proposed constitution changes.
Some of the proposed constitutional changes; including the change to a Company Limited by Guarantee, and for the LSA Board to sign off on recommendations to fulfill any legal implications are necessary.
Further, the amalgamation of the BAHWAC and Blueprint committees to become an Advisory Committee is also an appropriate recommendation.
However the SIF and CIF Boards must remain independent.
The LSA consultation process is only presenting one side of the story. Specific concerns with LSA's proposed changes include:
- The proposed new model provides for LSA to have direct access to grower levies via its proposed Constitution changes. LSA will have control of 25% (with potential for a greater share) of the annual levies compared to the current 14pc.
- LSA's vast majority of funds come from the Sheep and Cattle Industry Fund levies following an application process. It is appropriate that all recipients of grower levies, including Livestock SA, should be accountable for funds received via a short summary of their projects and expenditure each year. The proposed new model does not provide for this.
- LSA also claims the duplication of resources in administering the SIF and CIF. The two Boards have the services of an Executive Officer at 0.4 Full Time Equivalent with the SIF accounting for 80pc of that to administer over $5m of grower levies. It is hard to imagine a more cost effective model.
- The SIF Board of eight members is currently appointed on a skills basis by an independent panel. The new model proposes an internally appointed committee. The proposed constitution inexplicably does not allow for a chairperson to have either a deliberate or casting vote.
The following are excerpts from the Governance of the Sheep (and Cattle) Industry Fund Board Charter, which was drawn up by Livestock SA in 2020:
* 3 "The Livestock SA Board delegates full decision making and financial authority to the Sheep (and CIF) Industry Fund Board in respect to the management and disbursement of the funds as required by the Primary industry Funding Schemes Regulations"
* 4 "Recommendations made by the SIF (and CIF) Board will be upheld by Livestock SA. The Livestock SA Board are committed to assisting industry in establishing an Independent Board and not to control or dictate the process."
If LSA do not respect their commitment to a truly Independent Board then how could anyone have confidence when they advocate for 'agreements and contracts to be honored'?
In June 2022, Livestock SA released a discussion paper on their own performance claiming "poor allocation of scarce resources and unfocussed effort" That is an LSA problem, nothing to do with the fund Boards.
The Boards do not make policy, which is why they have a low profile.
The diligent management of funds by the SIF independent Board has ensured that there is always the equivalent of one year's contributions (about $4m) in reserve.
There is no guarantee that under LSA management that this will continue.
The current model is far from broken and the current proposals should be voted down by LSA members.
- Ian Rowett, Marrabel, was one of five industry leaders entrusted with the responsibility to approve the model which was formulated by then Agriculture Minister Rob Kerin and his department in 1999. Mr Rowett spent nine years on the SIF Board, with six years as chairman. He retired from the Board in March 2023.
SIF HISTORY
The South Australian Sheep Advisory Group (SASAG) was set up in 1999 to administer the new transaction levy (20 cents per transaction of sheep and lambs) initially to fund maintenance of the Dog Fence and repay an industry debt incurred from a failed compensation scheme for Ovine Johnes Disease and to address concerns and funding of the Ngarkat wild dog problem.
Over the years many more programs and research projects have been added. Included are footrot management, lice compliance, biosecurity, sheep diseases, feral dog, pig and deer eradication, melatonin trials, drought resilience, NLIS compliance, toxoplasma and sterile blowfly research, pain mitigation, assistance for learner shearers, improving oestrus synchrony, meat eating quality analysis, sheep expo sponsorship and many more.
In 2013, the government widened the scope for funds distribution to allow payments from the fund to a producer organisation (Livestock SA). The independent Boards assess applications for funding.
After significant consultation the SASAG funds Board transitioned to a subcommittee of LSA for legislative reasons in 2020 with a guarantee from LSA in writing that they would remain independent. It was renamed the Sheep Industry Fund (and Cattle Industry Fund).
