A new micro-abattoir in southern NSW is set to benefit local "paddock-to-plate" producers and improve animal welfare, but some fear it could become a failed venture at taxpayers' expense.
Murray River Council is building the $2.2 million cooperative-led processing facility at Barham, which is fully funded by state and federal governments.
The move is in response to a call from farmers, who have struggled to have their animals processed in the region due to abattoir closures in recent years.
But some are concerned the micro-abattoir will be owned and managed by a council who are already being investigated by the Office of Local Government (OLG) over its dealings with another private venture.
In 2018 Murray River Council spent $1.2 million on land and loaned $880,000 to Murray River Energy for an ethanol plant project that never eventuated.
What is a micro-abattoir?
The micro-abattoir project was initiated by a small group of farmers who planned to own and run the facility as a local cooperative, the Murray Plains Meat Cooperative.
"This is the best solution that we could come up with," said cooperative chair and free-range pork producer Lauren Mathers.
"Not just for the ethical reasons, but also for profitability on farm and just to have that service locally."
Right now, produce from her farm has to be driven more than 200 kilometres away to be killed in Benalla.
Murray River Council director of new projects John Harvie said the 13-metre by 25-metre micro-abattoir would be able to process around 25 small stock a day, or five to seven cattle.
It will have the capacity to process pigs, sheep, goats, cattle and poultry, supplied by 29 cooperative producers from the region.
"Initially that will create five jobs, moving up to about 15 once the facility gets its accreditation," Mr Harvie said.
The Murray Plains Meat Cooperative initially applied for government funding for the project, with the council's help.
However, Mr Harvie said council was advised by the Department of Regional NSW that funding would be difficult to secure due to the co-op's lack of trading and financial history.
He said the Department advised council it should become the project manager and owner of the micro-abattoir.
Development process raises questions
The council had previously rejected owning a micro-abattoir, but during a confidential meeting councillors voted to reverse that decision.
In a later council meeting, one councillor said his concerns with ownership of the micro-abattoir were alleviated after a discussion with the owner of Canowindra micro-abattoir, Tablelands Premier Meats.
Tablelands Premier Meats was later awarded the tender to construct the Barham micro-abattoir, but Mr Harvie said the company had not advised the council on the project prior to their appointment.
"I have to say that when council became involved there were very few … micro-abattoirs operating anywhere in Australia," Mr Harvie said.
The land purchased for the micro-abattoir was also sold by a co-op board member who was also a councillor at the time.
Mr Harvie said the councillor was not involved in any discussions on the micro-abattoir.
Riverina Ratepayers Group member Ian Wall said the group was concerned council had not followed proper procedures and its track record gave them little confidence in the project being managed appropriately.
Government Information Public Access applications revealed there was no direct evidence that the Department of Regional NSW had suggested the council own the facility.
However, Mr Harvie said this advice was given verbally in a phone conference.
As part of the GIPA application, council released evidence of a phone conference between state government departments, council and the co-op, as well as a letter, dated after the phone call, where Murray River Council put forward the option of council ownership.
The Department of Regional NSW did not comment when asked about whether it advised council ownership but said "the project underwent a rigorous multi-stage assessment process" before any funding was awarded.
Should councils own abattoirs?
It was once common for councils to own abattoirs, and many still own local saleyards.
However, over the years many council-led abattoirs failed, including one that Mr Harvie was previously involved in, the Mudgee Regional Abattoir.
It was the last local government owned and operated abattoir in the country before it was placed in receivership in 2003, with debts exceeding $10 million.
Mr Harvie said a micro-abattoir was a very different business model, with significantly reduced overheads and a secure supply from co-op members, ensuring the facility was not subject to market fluctuations.
Ms Mathers said they would like to see their business model and council involvement replicated in other regions.
"With that comes food security, jobs, animal welfare and quality of meat," she said.
"It takes away that whole reliance on big corporations and abattoirs that are mostly internationally owned now … you're really putting the power back into the local economies."
Who profits in a council-owned co-op?
Critics of the council argue local government should not take ownership of private industry ventures.
The micro-abattoir co-op members are not publicly listed, and with the council planning to transfer ownership to the Murray Plains Meat Cooperative after five years, Mr Wall said more transparency was needed.
However, Mr Harvie said the co-op had been very open, inviting members of the community to attend their annual general meeting.
He said profits from the micro-abattoir would be returned to the co-op for operational costs, and were not divided up between the members unless they became "extremely successful".
Councillors agreed that no ratepayer funding would be put towards the project and the only income derived by council will be annual lease fees.
