AS I START my offering for this week, I am sitting at my kitchen table mellowing to the sound of rain on the roof. Tropical Cyclone Marcia is delivering on its promise of much needed rain.
I am very aware of the conflict in my personal feelings of relief for my farm, while I know full well the damage that this same weather system is unleashing elsewhere. There is an element of guilt involved in my relief, but in the short term there is nothing we can do about the weather. All we can do is take what we get and make the most of it. Indeed, there is a sense of obligation to those who are less fortunate, weather-wise, to not squander a good season when we get one.
I see many parallels to this phenomenon in politics and public policy. Holding public office often insulates people from the harsh reality of life on the land. At the same time though, politicians and bureaucrats seem to have mastered the art of self-absolution whereby they appear to squander their political opportunity and obligations without contrition.
I make no secret or apology for my condemnation of the Nationals as a failed political force. They have enjoyed considerable political fortune and have squandered their opportunity to deliver significant benefit to the very people who provide their fortune. Rural and regional Australia has endured a constant and continuous decline over the last few decades under their stewardship.
“Is there a brave new front man ready to take the bit between his teeth and do what needs to be done?”
Last week I was confronted with an article quoting Nationals Senator John “Wacka” Williams condemning the Australian Competition and Consumer Commission’s (ACCC) decision to permit JBS Swift to take over Primo. At first glance it seemed that we, rural Australia, might have a political champion after all.
Could it be I have got it wrong? Is there a brave new front man ready to take the bit between his teeth and do what needs to be done? Or is this just an extension of the political stunt, “Let’s put on a good show, but only when it doesn’t really undermine the Coalition”, protesting that Barnaby Joyce mastered so well in his time in the Senate? I suspect the latter.
Of course you will say I have a political conflict, which is kind of true, but not in the sense that pertains to my assessment of both Wacka and Barnaby. Let me explain why.
Firstly, I agree emphatically that the ongoing consolidation of meat processing assets is a serious problem. In truth I see that any concentration of market force that constrains competition is unacceptable and in Australia we see it repeatedly.
We see the Coles and Woolworths duopoly dominate market access in fresh foods, we see JBS Swift (now increasingly) dominate meat processing and we see bulk handling companies enjoy regional monopolies in grain export pathways to name a few.
“It is sheer sophistry to sit in power and criticise a government authority and then do nothing to fix it”
Repeatedly politicians like Wacka and Barnaby refer our concerns of market failure due to a lack of genuine competition to bodies like the ACCC. This is the perfect political out for them. If the ACCC manages to get something right they claim the kudos, but when the ACCC gets it wrong they get to grandstand the populist sentiment and wring their hands in a gross and disingenuous attempt win public sympathy.
Here is the problem: the ACCC is a government structure with clear guidelines on how it must operate. Any failure of the ACCC is in fact a failure of the government. Both Wacka and Barnaby are part of the government and by inference their inaction is part of the problem and they are both contributing to the ACCC’s failure.
The ACCC is not and has never been competent in agricultural supply chains as has been demonstrated repeatedly. This is not news and yet it remains unresolved. It is sheer sophistry to sit in power and criticise a government authority and then do nothing to fix it.
“(This) sees repeated and ongoing failure by the ACCC to protect the interests of farmers”
The ACCC is primarily focused on protecting consumers from anti-competitive forces. In this context assumes that consumers are completely commercially naïve. On this basis consumers do not have to prove a case for ACCC to act, it merely needs to become aware of the problem.
The ACCC has no particular mandate to protect small businesses or farmers the way it does a consumer. The ACCC charter does not concern itself overly with issues of asymmetry between big business and small business. It is incumbent upon a complainant to work through a complex legal process and framework to seek any injunction by the ACCC. As a result, small business is severely handicapped in its ability to access and influence the ACCC or to win any meaningful result.
Wacka and Barnaby's failure to act to introduce reform to the ACCC and its charter sees repeated and ongoing failure by the ACCC to protect the interests of farmers and small business operators generally.
“What hope has the ACCC got of getting it right in the interest of growers?”
As we speak, Barnaby is cocking up the introduction of mandatory code of conduct around grain port access which will be administered by the ACCC. So far he has failed to act on the advice of producer groups and has demonstrated a complete lack of understanding about the concentration of market power by bulk handling companies in up country grain logistics.
What hope has the ACCC got of getting it right in the interest of growers? Almost nil, particularly when you consider Barnaby’s grasp or lack thereof, on the problem.
The ACCC needs to be overhauled, but Australian competition policy must be overhauled too. If we consider the American competition laws, or antitrust laws, there are three key focuses around: collusion; mergers and acquisitions and; creation of monopolies and abuse of monopoly power.
The US is the home of capitalism and they actively break up monopolies through legislation. In Australia we seem to have legislation that enables or even encourages monopolies.
We need to give small business operators the same rights and protections under competition law as we currently afford to consumers. We also need to look at imposing absolute limits on the percentage of a market any company can control, directly or through subsidiaries, as is done in most other developed economies in the world.
“How can we expect people who actively engage in political anti-competiveness to actually do something about anti-competitive practise in the commercial world?”
In the end, I suppose it is a bit laughable to expect any real action on competition from the likes of Wacka and Barnaby. After all, they have survived in politics because of their political collusion with the Liberal Party whereby they sell our votes to the Coalition. They sell the right to contest some rural seats in order to avoid conservative competition and to secure positions on the Senate ticket. How can we expect people who actively engage in political anti-competiveness to actually do something about anti-competitive practise in the commercial world?
I wonder if the Nationals realise or even care that their political fortune is not as unpredictable as the weather? We are no longer fooled by the Nationals crying foul over bureaucratic failures that only reflect their own failures to act.
The rain is getting heavier now and the glimmer of hope about the coming season is becoming a glow, with rain on not yet dead pastures and wetter crop fallows than twelve months ago. I know friends of mine are not so lucky. I know there is nothing I can do for them in regards the weather, but there are things we can do outside the weather to help them - and my current good fortune obliges me to try.