The Sunday News
GOING through an update report for the livestock industry from the Livestock and Meat Advisory Council (LMAC) for the period ending on 4 September 2015, I couldn’t help but ask myself two questions which form the gist of this instalment. The report covers a number of pertinent livestock issues and events for the industry in general. One major area which is covered by the report is the protracted negotiations that are going on in an effort to address challenges that are brought about by the cattle levy especially on the viability and competiveness of the beef value chain.
LMAC argues against the 10,5 percent levy that is being charged by the local authorities and is splitting in the following manner; 3,5 percent cattle levy to the council, 2,5 percent to owners of cattle sale pens (in most cases these are owned by the local authority), three percent to the Department of Livestock Production and Development for live cattle grading and 1,5 percent to the auctioneer.
This levy is charged on the farmer although in some cases local authorities erroneously charge it on farmers especially for cattle that are transported for sale to abattoirs and butcheries outside the district.
This is because local authorities do not have means and mechanisms to follow up on payments on the final destination or buyer and hence they choose the easy way out by levying farmers instead of buyers.
I will reiterate this as I have expressed before. The 10,5 percent is on the high side especially for business players who are buyers and this is against a difficult economy like ours.
It means a buyer who buys an animal for $850 at a district council auction will have to fork out an extra $89,25 for the levy giving a total cost of $939,25 for that animal. If that buyer buys 15 animals at the same price the levy will be $1 338,75! This is outrageously colossal. I am not about to sympathise or empathise with buyers on this forum because I know they push this down to the consumer who becomes the ultimate victim of the levy. The farmer is also affected by this high levy because buyers then suppress their offers in terms of prices so as to minimise the levy paid out.
This levy just has to be revised downwards especially considering that our contemporaries, other countries within the region are paying around $2 per animal for their levies.
Looking at the levy apportionment one cannot help but ask the question about the relevance of three percent given to the department of livestock production and development (LPD) for live grading of animals. How does the live grading help the farmer because there is never any indication that buyers are using the grades for payment.
In abattoirs the system is clear and the relevance and benefit of grading is there for all to see as prices are offered according to carcass grades.
Therefore does the LPD live weight grading really add value to the process or its just one of those cases of commercialising a useless process?
I am totally not sold to the idea that the three percent is right both in value and necessity. It makes the transaction expensive.
In fact the more I look at the privatisation or whatever it is called that enables Government departments and State enterprises to collect levies and taxes the more I think we need to revisit the model.
There is so much craving and undue appetite for levying and taxing for even the flimsiest excuse to the extent that there is now double and even triple taxing just to get that dollar. One classic example is when one pays $10 road access at the border and still has to pay $2 at the toll gate 10 kilometres down the road, what madness! For the livestock industry and especifically the beef industry to be viable, competitive and reasonable regional comparable levies have to be charged.
Admittedly this is a source of revenue for local authorities but honestly a reasonable figure can still be arrived at without driving the industry to the cliffs.
Lastly the fact that LMAC comprises private players only reaffirms my previous assertion that there is need for a livestock controlling body which is gazetted by instruments of Government such as the Grain Marketing Board and Tobacco Industry Board.
Such a body should be the one pushing for such pertinent issues in the industry so that they are not only left to the devices of private players whose singular motive is profit.
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