Why is this important to members of the TFGA?

At the risk of having some of you glaze over, I’m going to talk today about an upcoming constitutional review we’re undertaking in the coming months. I know, I know – hang in there, I promise this won’t hurt a bit.

The TFGA introduced a new constitution in 2005 and, though only seven years old, it is now in need of review. Over the next few months, we will be discussing proposed changes with members at meetings throughout the state, the first of which was held in the Huon last night. A formal proposal will be considered by members at our AGM in July.

At several thousand pages, Australia’s Corporations Act is one of the biggest pieces of legislation in the world. Because the Australian legislation is so comprehensive, so complex and the subject of regular updating by amendment, companies such as the Tasmanian Farmers and Graziers Association (TFGA) have to be constantly alert to its latest provisions and to modify their own governing documents accordingly.

Why is this important to members of the TFGA?

Most of the changes we’ll be proposing are essentially housekeeping ones to keep our constitution to in line with changes in the Corporations Act.

However, one significant area we’ll be looking to change is around our ‘levy’ based fee system. Our constitution requires membership fees to be paid through levies on the all the commodities a farmer produces; and it assumes that the company that processes the commodity collects each levy and forwards this payment to us. So, for instance, it is the abattoir that deducts sheep and cattle levies from a farmer’s returns.

This is not unique to TFGA – it has been a pretty standard system for state farming organisations for decades. However, across the country, those organisations are finding that this system is no longer robust. There are more and more paths to market, many of which don’t go through a traditional processor; there are many more products than were ever dreamt of when levies were established; and farmers are seeking greater transparency in the levies and charges they pay. As well, I have yet to find a company that relishes the role of collecting funds on behalf of someone else, so calculating and collecting levies on behalf of the TFGA is not a favourite pastime for the processors either.

While the TFGA’s income base is sound, many of our peer groups in other states are struggling to fund their activities using a levy-based system and are considering other forms of fee-based membership.

State farming organisations (SFOs) like the TFGA provide core funding for national peak commodity groups (like the Cattle Council of Australia, the Australian Dairy Farmers Federation, the Sheepmeat Council of Australia, AusVeg, etc) and also for the National Farmers Federation.

The TFGA pays more than $150,000 each year in membership fees to national bodies, and we’re one of the smallest states. So uncertainty in income at SFO level places constraints on funding at the national level too; and we’re already seeing signs of this system breaking down. We have to come up with a more flexible system for all levels of farmer representation or we risk losing our industry voice.

Currently, the provisions in our constitution don’t allow any flexibility in this system; and we’re already operating outside our own rules. Several years back, we introduced an annual cap of $4500 and a minimum of $337. That does not comply with the rule that says farmers must pay all levies on everything they sell. So we have to update these provisions as a matter of some priority.

If the levies collected by the processors and paid to the TFGA amount to more than $4500 for an individual farmer then we remit the difference; if the levies collected are less than the cap, we have to invoice farmers for the difference. This is a very inefficient system. Already many farmers who regularly pay the maximum fee to the TFGA have said that it is time to simplify the process – and we agree.

A number of members are already using the provision in the constitution that allows for self-assessment under some limited circumstances. Putting some rigour around this process and expanding the application would be a good first step. There are many other options used in membership associations and it is probably time we considered some of these.

I should stress that we are not seeking to increase the fees paid by individual members although we are, of course, seeking to increase the number of members. Rather, we want a more efficient membership fees system. We are open to suggestions about better ways of doing this, which is one of the reasons that we will be talking with members to hear some ideas from those who ultimately sign the cheque.