Codifying fair play for farmers

Is it fair that retail prices remain relatively low while our farmers and food producers go broke?

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.

Joel Fitzgibbon

Joel Fitzgibbon

is Shadow Minister for Agriculture, Fisheries & Forestry & Rural Affairs and the MP for Hunter
Date: Newest first | Oldest first


2/07/2014 7:39:57 AM

Is it fair when industry and government agree on some scheme, eg NLIS for cattle, that farmers carry the cost for zero benefit. Doesn't the responsibility for governing rest with government; or have they abdicated their responsibilities as elected officials to unelected big business and unelected prescribed bureaucrats. Should Joel be able to see this! It would seem that elected politicians ask all these questions and appear not to understand their role in this mess. They are the ones that sign off on the excessive legislation and regulation. Whose running Australia?
2/07/2014 7:45:41 AM

Food is not cheap in Australia. We are one of the most expensive places in the world to shop - not just for food. Do your research.
Just another farmer
2/07/2014 10:21:25 AM

This is bit rich coming from a political party that allowed Ludwig to destroy the cattle industry and Carr and Bligh to limit food production by tying up all landholders capacity to develop their land. Don't even mention electricity prices and water buybacks. The Labor party is very happy with Coles and Woolworths because they are supportive of union workforces. Labor hates small business which is what farmers are and despite whatever Joel says Labor can never be the farmers' friend.
Chick Olsson
2/07/2014 11:13:12 AM

Joel, vote to remove the carbon tax to regain any shred of credibility.
2/07/2014 5:49:15 PM

Amazing Joel, barely 9 months out of government and you come out with these gems of wisdom as though these problems have been around for less than 9 months. You were well and truly part of the problem when you had control and were no help then and now all this. As far as vertical integration by the supermarkets, you must be dreaming, why would they want to include the loss making production part of the chain which often takes 12 months or more when they can cream their profits in often less than a week.
2/07/2014 8:09:02 PM

Maybe the farmers of Australia could do what the majority of your voters would do and go on strike, withholding all food from market until we get a fair share of the profits, that's the union/labor way isn't it? Wonder how the shoe would fit on the other foot?
Cattle Advocate
4/07/2014 6:58:03 AM

If $1/lt milk can sell at a loss but survive could it show Joe Hockey and our farmers how to balance their budgets? SM are pushing down prices to get a bigger piece of the pie and subsidise shareholders and customers,why not bake a bigger pie creating more jobs? In dairy you reap what you sowed 3yrs ago,while Aus was sowing seeds of dispair NZ sowed seeds of hope and is reaping a bumper harvest even with the highest domestic milk price in the world. Team NZ also has a 10yr plan that's not to sell milk at a lose but to fence 22,000km of waterways off to double NZ dairy to benifit all NZ.
Out of the shadowShadow Agriculture Minister Joel Fitzgibbon aims to put ag policy under the microscope. Based in the NSW Hunter Valley, Joel also has a unique perspective on the tensions between primary production and mining development.


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