'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.

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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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READER COMMENTS

Chick Olsson
12/11/2014 7:09:08 AM

Like it or not David, mainstream media and buying decisions are made in the cities by the younger generation, who are able to make up their minds as to what is "ethical" or not. Not to understand this will be at an industry's demise.
Cam
12/11/2014 11:06:33 AM

@Chick, they don't make up their own minds. They blindly follow whatever PETA and AA tell them is unethical. Like David said above, it is these groups that are deciding what is ethical or not and then pushing that agenda. Since when does PETA know what is ethical or not. It is driven purely on emotion and nothing else.
Jack
12/11/2014 11:46:19 AM

How dare people object to animal cruelty or that they're ingesting HGH or antibiotics via the animal products they consume (sarcasm). Keeping hens crammed in small, wire cages for their entire lives, never to see the sun or feel the earth under their feet is cruel & immoral. It may be OK in the eyes of farmers, but it is definitely NOT OK as far as the majority of consumers are concerned. If you think it's only "animal rights and environmental radicals" who are becoming informed and objecting to caged hens and other standard farming practices, you're sadly mistaken.
Frank
12/11/2014 11:53:31 AM

Good thing about "ethics" is they can be ignored.. We do not see the urban people too concerned about the anti-suicide nets put in place in those chinese manufacturing meccas that create the mobile phones and tablets and such... The nets being designed to catch the suicidal employees.. Or there was no outcry when thousands in Bangladesh died when that building collapsed that housed a textile manufacturing facility that produced cheap clothing for the western world.. No pressure on the government to ban imports from said countries.. Says something about the ethics of people..
Very Woolly Thinking
12/11/2014 12:13:25 PM

David, please do your own research on non mulesed wool rather than swallowing the AWI party line. There are orders in the market for non-mulesed wool and yes they pay a significant premium but most of these sales are private, direct to mills and never go thru auction, so you don't see the premium in auction figures. The other way Australia has lost out is that many overseas companies don't even try to source non mulesed wool from Australia any more - the orders and premiums go to NZ or South Africa or Argentina.
Leo
12/11/2014 4:22:02 PM

Please sign to ban cage eggs in Victoria: https://www.change.org/p/now-is-y our-chance-stop-the-cruelty-of-fa ctory-farming-in-victoria
jen from the bush
12/11/2014 4:55:58 PM

Temple Grandin of USA advocates a website where anyone can visit and learn and observe exactly how different meat foods are produced. Production methods are clearly shown. Viewers are shown why different methods are carried out, the costs involved and the different outcomes of these actions. ie no. of piglets produced, fly strike in sheep etc. I believe this would lead to a lot less hysteria, farm animal welfare violations etc and would educate and help people think for themselves. They then can vote with their wallets and buy exactly what they want.
Very Woolly Thinking
12/11/2014 5:58:25 PM

David Leyonhjelm, you are very keen to talk about free choice, how about you put your money where your mouth is. Wool growers have no choice but to pay 2% compulsory tax on all wool sales. How about using your power in parliament to help to free wool growers from unfair taxes like this? How about promoting the idea that wool gowers should be free to contribute or not to whatever R&D organisation they like, rather than being forced to pay the fat and lazy AWI which is stuffed to the rafters with bureaucrats and has wasted hundred of millions of dollars?
leon tanner
13/11/2014 6:49:22 AM

I prefer you when you are taking on the types of points you have in this article David. I would like you to go after this point harder. We are all heartily sick of our national policy being driven by the minority fringe dweller radicals in Australia. Giving us the choice to decide what products we want by transparent and honest labeling is the way to go. While you are at it, give your views on native vegetation, biosecurity and environmental regulations reform another airing please. Nothing seems to be happening.
leon tanner
13/11/2014 2:15:00 PM

Very Wooly Thinking, you obviously don't read David's comments. It was David who raised opposition to the current agricultural levy systems. Please get up to speed.
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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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