Business is the way to a better deal

Crying poor about farming returns does little to engender support

THIS week I read with great interest that the federal Minister for Agriculture is talking tough on competition law reform to protect farmers from misuse of market power by food processors and supermarkets.

While I am an ardent supporter of a better deal for farmers and strongly support the notion that agriculture is uniquely important to long-term political and economic stability, there is a major problem in the way Mr Joyce is attacking this problem.

Arguing for a better deal for agriculture invariably results in a broader backlash from people who are struggling outside of farming. Joe Hockey and his mates will predictably respond to calls for help for agriculture by asking why we, farmers, are more deserving of support than the bloke or couple struggling to run a corner store.

In the discussion about competition policy and the impact of predatory practices of big business, the Treasurer is absolutely right.

The opportunity for reform of competition policy must include small business in all sectors and not try to single-out farmers for special treatment. If we are to see meaningful reform we need to align our arguments with the broader small business community.

According to the Council of Small Business Organisations of Australia, small business accounts for approximately two million businesses and employs over seven million people accounting for approximately two-thirds of the Australian workforce.

The health of the small business sector is a major single determinant of the health of the broader economy. In agriculture, over ninety per cent of farming businesses are small businesses, and the sector probably has the highest percentage of small businesses.

Successive Australian governments have professed to be concerned about the small business sector, and still the regulatory demands on the sector see it pushed nearly to the brink.

Furthermore, the definition of a small business varies between the Australian Tax Office, Fair Work Australia, the Australian Bureau of Statistics and the Australian Chamber of Commerce and Industry.

It is unlikely that any Australian government has made any serious commitment to the small business sector whilever they have not even taken the time to define it.

Small business operators often operate the business they own or at very least have an intimate knowledge of its operation. Similarly, most small business operators are not often 'sophisticated', in the corporate sense.

For example, a plumbing contractor is usually a plumber with a trade background, not a university-trained business management graduate.

A farmer is usually skilled in production of crops or livestock, not a tax accountant or industrial relations lawyer.

As a result, we see small businesses severely disadvantaged by government regulation and compliance.

Similarly, small business is increasingly besieged by the regulatory systems of government, which is really targeting big business and indifferently catching small business in the crossfire.

All this does nothing to improve productivity or profitability and simply adds cost to the business and demotivates the sector.

But there's more. The federal government has continued to push compliance requirements onto business in regards to the roll-out of the administration of increasingly complex employee services, such as tax collection and management and superannuation administration.

The Competition and Consumers Act, which provides the compliance framework for competition in Australia, similarly pushes the onus of proof of anti-competitive behaviour back onto small business and relies on a sophisticated, legally complex process for complainants.

This Act assumes all consumers are commercially incompetent and aggressively protects them. Conversely, this Act does not differentiate between large or small businesses, which amplifies the imbalance in resources available to argue anti-competitive behaviour for small business sectors.

If Barnaby Joyce wants to address issues of agricultural competitiveness and use this platform to improve farm returns, he would increase his opportunity for success by not singling farmers out in the conversation.

It would be far more effective to reform competition policy by simply giving small business the same rights as consumers under the Competition and Consumers Act.

This change is relatively simple and would make it more difficult for big business to exploit small business and address the significant imbalance that makes prosecution and proof of anti-competitive behaviour so difficult.

The Minister for Agriculture is calling for reform of competition policy by emotively declaring farmers earn less per hour than does a waiter in a coffee shop.

I agree with his assertion, but it is also likely that if that waiter works in a small business, he or she is paid more per hour than the person who owns that business. It is a common problem across many sectors.

Crying poor about farming returns does little to engender support from the broader small business community. We need to find common ground where we can and use our collective influence to win fair reform on key issues like competition policy in Australia.

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FarmOnline
Pete Mailler

Pete Mailler

is a farmer on the Qld/NSW border and a co-founder of the Country Party of Australia
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READER COMMENTS

Deregul8
6/10/2014 6:27:11 AM

Just like there are Liberal and Labor voters, there are healthily profitable, free market embracing farmers and there are at best, barely profitable, agrarian socialist farmers (who are the minority and being rationalised to the coast). It is that minority of farmers that have the loudest voice and in their cries for financial help, leave the rest of the industry vulnerable to socialist politics. i caqn just see it when food prices one day do hit the roof, who will consumers want a pound of flesh back from? Hard working, risk taking, free market embracing, protifable farmers.
wtf
6/10/2014 7:04:57 AM

back to name calling D8?
PayAttention
6/10/2014 7:18:40 AM

40s-50s maybe WTF? They're not really the same machine now. My father used to talk about my grandfather buying their first header in the late 30s. Used Sunshine W with a 10 foot head. I'd need 10 (more?) of those to even try keeping up with my S680
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Burrs under my saddlePete Mailler is a farmer on the Queensland/NSW border. His perspective and opinions are borne from seeing more than one side of many problems in his various farm leadership roles and in wanting to ensure a future for his children in agriculture.

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