New ideas for meat industry reform seem thin at the moment, so this article is worth a read. Rob MacKay, retired Agriculture and Forestry economist gives us his view of a new system, that could solve many of the problems of the industry.

He suggests a simple system to set up with no ownership transferred, the formation of a Co-Op to ensure all profits would be captured, and  bettter co-ordination between the marketers and the producers.

Tinkering will not help this sector. Lamb, mutton, and some beef grades are selling at record rates overseas but many sheep and beef farmers are not making a sustainable profit. 

Mr MacKay has thought carefully about this. First, he says, no transfer of industry assets would occur - farmer ownership of meat would just extend further down the value chain than it does now. Second, the ability to create such a co-operative already exists in legislation - it would only need a farmer vote. He says the main advantage of this would be a reversal of the profit- flow, with the change from a system where much of the wealth is captured by traders rather than producers. With a co-operative, most of the benefits go to the producers reports The Dom Post.

It would also bring closer co- ordination between marketers and farmers, remove the risk of foreign takeover, provide funding for science and market research and hasten processing efficiencies. A highly sophisticated computer program would be needed. It would have to manage the reconciliation between forecasts of livestock production and anticipated market demand.

It would function as a broker, storing market specifications for all types of meat products and calculating potential product volumes from livestock numbers. And it would organise payments to farmers - perhaps following the Fonterra example of an indicative payout, followed by regular payments.

Let Mr MacKay have the last word: "The two-way auction system - producers to marketers, marketers to producers - would bring about enhanced co-ordination and flexibility within the meat industry and enable, through stable contracts, greater market opportunities. The rest is details."