IN THE 18 years I've served in the Parliament, our farmers and their relationship with retailers Coles and Woolworths has been an enduring topic of debate.
On one side are the interests of the retailers, their employees and the consumer, the latter being the beneficiary when intense retail rivalry leads to lower prices.
On the other side is the producer/grower/dairyman/food manufacturer who bears the brunt of retail rivalry as the chains pass the impact of squeezed margins back up to the farmgate or factory. This last point is incontestable.
Consumers are often the winners no doubt. But will market forces work to correct the situation before we lose too many producer or manufacturing enterprises?
Everywhere I travel it's the same story - costs are rising while farmgate and manufacturing profits are falling. This is unsustainable and there are only three possible future outcomes for agriculture.
The first possibility is that consumers will begin to send the signal that they put a higher value on the future of our farmers ahead of their own family budgets. There is some evidence of this occurring in the form of a growing preference for Australian produced products. But you would be an optimist to believe this will become overwhelming.
“The third possibility is a contraction in our farm sector, leaving us increasingly dependent on food imports ...”
The second possible outcome is that more big corporates with deep pockets in search of vertically integrated supply-chain models increasingly buying out family farm enterprises. While some of these takeovers will be necessary and welcome, I don't believe the wholesale corporation of our farms is a concept which sits comfortably with the broader community, particularly those who understand that much of the innovation in farming has come from those who know their land and farming practices best.
The third possibility is a contraction in our farm sector, leaving us increasingly dependent on food imports. This last outcome and all its implications for our food security is unacceptable and cannot be allowed to occur. It is our wealth of natural resources and farmer custodianship of our land-mass which guarantees our food security and a significant slice of our export income.
So what is to be done? First of all the Abbott government must finish what Labor began by bedding-down the Food and Grocery Code of Conduct. Only when it does so will we know how well it does or doesn't work and in particular, whether the voluntary nature of it proves a barrier to success.
“The mandatory Code has satisfied no one - growers and wholesalers alike”
Second, the government must do something with the Horticulture Code of Conduct. The mandatory Code has satisfied no one - growers and wholesalers alike. One particular point of frustration and concern for growers is the capacity for individuals to act as both agents for sale of goods and as merchants.
Third, the government's review of competition laws and policy must be a serious and bold one. It will be a great shame if after raising producer expectations it fails to deliver any change. I don't claim there are any easy answers, having worked in this space since my participation in the Joint Select Committee on the Retailing Sector in 1999.
Back then and ever since, my experience has been one of disbelief on hearing some of the impact of the market on growers and other suppliers only to find myself equally concerned to hear how what appears to be a remedy at first glance, will potentially raise retail prices and adversely affect retail chain shareholders or indeed, employment levels within companies like Coles and Woolworths.
Maybe it's time we simply asked ourselves what's fair? Is it fair that retail prices remain relatively low (not in every case by the way) while our farmers and food manufacturers go broke? Is it fair that the retailers can opt out of industry codes designed to create fairness whenever they threaten their interests? Is it fair that when the retailers decide to run a product marketing campaign or certify food product lines as eco-friendly that farmers have to pay the costs?
It's these questions and many others like them which should guide the competition review. I believe there is scope for a bipartisan approach; our farmers, food manufacturers, shareholders, consumers and employees deserve nothing less.