'Luddites' stifling free choice

I am very confident that more consumers will vote with their wallets than their misguided emotions

THERE is a tendency in the retail sector - both here and overseas - to assume those with the loudest voices are representative of consumers generally.

A decade ago, a number of high-profile fashion brands declared they would not accept wool from mulesed sheep in response to pressure from PETA, which is about as representative of fashion consumers as pound dogs are of racing greyhounds.

Similarly, the EU refuses to import beef from cattle treated with growth hormones, and a few US dairy manufacturers refuse to process milk from cows treated with BST, based on pressure from noisy unrepresentative minorities.

Here in Australia, Coles refuses to sell beef from cattle treated with hormone growth promotants (HGPs) and has removed cage eggs from its home brand range. It also has a more restrictive policy on free range stocking density than the chicken industry, as well as various policies on pork production.

And now South Melbourne Market has decided that no cage eggs or products containing them may be sold there.

“The agenda is being determined by animal rights and environmental radicals”

It is not hard to see where this is headed. Anything the animal rights movement chooses to define as ‘factory‘ or ‘industrial’ farming can expect to be targeted. The agenda is being determined by animal rights and environmental radicals, and retailers are being coerced or fooled into co-operating.

What these issues all have in common - and there are more like them - is that they affect the productivity of agriculture. Like the Luddism movement to reject new processing equipment in woollen mills in nineteenth century England, these campaigns essentially involve a rejection of tools that lower the cost and increase the efficiency of agricultural production.

For those of us with an interest in all this, the question is how to respond. Should the scare campaigns mounted by the radicals be countered with a contrary campaign? Should they be ignored on the assumption that, like the Luddite campaign, they will eventually go away?

As someone with a strong belief in the power of markets, I am relatively relaxed about it all - provided choice remains available. Yes, it would be nice to stop the lies and correct the misconceptions, but when markets operate freely, they represent the decisions of hundreds of thousands of individual consumers who each decide whether the issue matters to them. As a group, they never get it wrong.

When the wool industry decided to distinguish between wool from mulesed and unmulesed sheep, for example, I knew it would turn out fine. If consumers cared enough about mulesing, they would purchase garments made with non-mulesed wool, thus rewarding sheep producers who abandoned mulesing. If not, they wouldn’t.

And so it has proved – consumers have shown little interest in the issue with the result that non-mulesed wool has not attracted a price premium to compensate for the increased cost of fly control. Mulesing, being more cost effective, is back in widespread use.

Equally, choice is available in the case of dairy manufacturers in the US who decline to accept milk from BST treated cows. While some consumers have shown they prefer such milk, most are unmoved and choose whatever is attractively priced and conveniently available.

“But when it comes to beef at Coles, or egg products at South Melbourne Markets, choice is absent ...”

Coles is also offering choice in relation to cage and non-cage eggs. Although its home brands are given a lot more prominence than supplier brands, consumers can continue to buy cage eggs if they wish. Given that cage eggs are significantly cheaper to produce than barn and free range eggs, they will inevitably be sold at a lower price. For consumers who believe there is nothing wrong with cage eggs (and I am one of them), buying the cheapest eggs on offer will continue to be all that matters.

But when it comes to beef from HGP-treated cattle and pork from sow-stall free piggeries at Coles, or cage eggs and egg products at South Melbourne Markets, choice is absent. The retailers are arrogantly denying their customers any choice. That is a problem and needs to be countered.

It seems to me the appropriate response is to let the market work by making choice available. Thus, if Coles cannot be convinced to stock both HGP and non-HGP-treated beef, the objective should be to encourage consumers to seek out alternatives retailers. Since HGPs lower the cost of beef production, allowing it to be sold at lower cost, it should not be too difficult to persuade consumers that there are better value options elsewhere.

Similarly, if South Melbourne Market refuses to allow its customers a choice, the appropriate response is to ensure they have a convenient choice nearby. Among various options, this might involve encouraging a nearby retailer to not only stock but also advertise cage eggs at attractive prices, undercutting those available in the market. It might not be long before there is a change of policy.

Given choice, I am very confident that more consumers will vote with their wallets than their misguided emotions. That is exactly the case with organic food, which is only genuinely popular when retailers sell it at a loss to avoid write-offs.

While there are always some people with more money than sense, most people become very pragmatic when it comes to spending their own money. In free markets, quality, price and convenience will always prevail over lies and emotions.

David Leyonhjelm

David Leyonhjelm

has worked in agribusiness for 30 years and is a Senator for NSW representing the Liberal Democrats.
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Steve Capeness
22/11/2014 2:57:44 PM

David, the problem with the way you approach this subject is that you ( wrongly) assume there is nothing wrong with feeding antibiotics to chickens every day of their life, forcing hormones into cattle in feedlots, processing the crap out of food so it can be value added and last on shelves for 2 years, spray pesticides all over food and introduce GMO's so that our food now comes from the labs of Syngenta and Monsanto. Keep this up and we will lose the sovereign right to be self sufficient in nutrient dense health giving food. Governments should protect our National interests first.
23/11/2014 4:21:06 PM

time to show this bloke the door. He is a donkey vote calculator and deserves nothing but a good kick in the pants for pretending to be anything other than an opportunist from our flawed electoral system.
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Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com


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