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Role models
We need
successful role models to guide us.
As we
often do in the olive industry we can first look to Europe for models of
effective agrarian industry representation. There have been many reasons
given for the subsidies provided by many European governments to their
olive, and most agricultural industries. The truth is that the subsidies
are in place because of the power of the agricultural unions.
Established two centuries ago, and consolidated with the rural
Communist partisan groups during the war, such as the French ‘Comites
defense de l’action paysanne’, the agricultural unions showed the unity
of purpose that resulted in massive cooperatives that virtually
controlled the marketing of each commodity. These coops controlled the
cash generated by their industry and invested in banks, schools,
unrelated businesses and ultimately very powerful political lobbies1.
Successful cooperatives in Australia include Wesfarmers and the Rice
Growers Cooperative, which incidentally own Riviana, one of Australia’s
leading table olive importers and distributors.
Some
close-knit industries, like the dairy, rice, sugar and cotton
industries, have successfully built cooperative enterprises, but across
all agricultural production they are the exception rather than the rule.
The main cause for failure of the thousand of cooperatives that have
been started is the conflict of interest between efficient commercial
management and shareholder control.
Internationally a new trend in cooperative structures, ‘New Generation
Cooperatives’ is emerging2.
Theses structures are designed to overcome the perceived failings of
many agricultural cooperatives.
In
Australia, cooperatives, while exerting some political influence by
direct lobbying and supporting industry associations or federations,
have not evolved into the powerful unifying political forces that are
evident in Europe.
In the
United States, the Farm Bureau has provided the local rallying point for
farmers, and established a strong cash stream from its commercial
activities. In almost every rural town there is a Farm Bureau that
supplies farming inputs and trades in farming commodities.
In
Australia farming communities have not developed effective local
commercial activities. There are a few fuel and other input buying
groups scattered around the country, and some cooperatives have bought
into local supply chains – but these commercial activities do not feed
cash into industry organisations to drive the political agenda.
So, in
the olive industry, starting with virtually a clean slate, which
representative and self-regulatory framework do we want to emulate?
The
industry comprises some very large producers, in one instance claiming
to own or manage 16.5% of Australia’s total plantings with a further
million trees to be planted in two years. There is then the normal
spread of medium and small producers with operations from 50,000 trees
down to a few hundred. The 80:20 Pareto Principle applies, 80 percent of
production coming from 20 percent of producers.
Currently
this whole group is represented by one ‘peak body’,the Australian Olive
Association. Realistically, it is unlikely to be able to represent the
interests of both large and small growers equitably.
To date
it has a dwindling membership and is cash-strapped. Its lack of real
influence in demonstrated by its failure to win in a number of policy
campaigns locally and overseas. It has failed to establish a research
levy to fund industry research, an attempt to piggy-back an industry
levy to fund the Association was also doomed. An expensive legal battle
to introduce counterveiling duties to offset subsidised imports was lost
and attempts to change the international standards for extra virgin
olive oil to accommodate the vagaries of Australian production has not
been successful.
All these
campaigns, although funded to an extent by government and vested
interests, have drained the resources and energy of a small, ‘cottage’
secretariat. It can be argued that, while there is a general benefit to
the industry, these campaigns have been driven by the larger producers
who have the most to gain. The return on investment to those producing
for the boutique market can be questioned.
How does
one overcome this dichotomy of interests between the large enterprises
and those that produce for the boutique market? Once again we can turn
to the wine industry for some direction – although calls to emulate them
are now no more than echoes as crippling oversupply has decimated many
businesses. Another example of the diverging interests of large
corporations and boutique producers.
The wine
industry once had a single representative body for growers and
winemakers, the smaller enterprises then broke away to form the
Winemaker’s Forum to represent their interests. Reconciliation resulted
in the establishment of the current framework with the Winemaker’s
Federation of Australia being the peak entity with two electoral
colleges, the Wine and Brandy Producers Association and the Australia
Regional Winemakers’ Forum. The former represents medium and large
winemakers, the latter small and medium regional winemakers. The
Federation is funded by voluntary levies.
The
status quo in the olive industry has a third representative body, the
Australian Olive Oil Association – hitherto representing the interest of
importers and distributors of olive oil and table olives. With the
increasing purchases of Australian olive oil and table olives for
inclusion in established brands, the boundaries between importers and
local producers will blurr and it will make senses to merge the
Australian Olive Oil Association into our new body, let’s call it the
Australian Olive Federation Incorporated (AOF).
To
facilitate the merger, the AOF could initially have three electoral
colleges, each with equal representation. The colleges would be The
Australian Olive Association representing large and medium growers, The
Australian Olive Oil Association representing distributors and traders,
and the Australian Regional Olive Forum representing medium and small
regional producers. This would truly be an industry body with the
capacity for developing industry policy, financing major generic
marketing campaigns, regulating quality, administering the research levy
and lobbying.
We would
then have a Federation of all interests in the Australian olive industry
rather than the current sectoral representation which is more akin to a
club or society which has grown from the laudable voluntary
contributions of the pioneers of the industry.
The Australian Olive Federation (3) |
