Joyce test for Harper shake-up

29 Sep, 2014 07:43 AM
Minister for Agriculture Barnaby Joyce.
Farmers are paid an hourly rate less than half that paid to coffee shop waiters
Minister for Agriculture Barnaby Joyce.

AGRICULTURE Minister Barnaby Joyce is planning to use his review of competition in the farm sector to challenge the Harper review's proposed changes to market power laws.

Cabinet ministers are considering Mr Joyce's agriculture competitiveness green paper which considers tougher competition law changes to protect farmers from alleged misuse of market power by supermarkets and food processors than the Harper inquiry recommended last week.

The Harper review did not specifically address 'farmgate' prices but found competition in supermarket sectors had intensified in recent years, and the introduction of an industry code could ensure suppliers could be dealt with fairly and efficiently.

But the agricultural competitiveness paper, which Mr Joyce described as the "biggest white paper in Parliament's history", has received 700 submissions and will look at mechanism to ensure producers get a fair price.

"I see the problem which is exploitation at the farmgate by a centralised purchaser of products, what is their (the Harper inquiry's) suggested remedy that will work?" Mr Joyce said.

"Are you strengthening section 46 or are you weakening section 46, are you making it so the Australian farm business has remedy against exploitation in a expedited form or not?"

Section 46 of The Competition Act sets out the rules against misuse of market power. ACCC chief Rod Sims and small business groups wanted the introduction of an "effects test" which could make dominant market players liable for the financial problems of smaller competitors.

The Harper inquiry recommended bringing section 46 into line with the rest of the competition rules, by focusing on a "lessening of competition" rather than the effect on individual competitors.

The white paper, to be released at the end of 2014, could pre-empt the final Harper report. It will also consider new infrastructure, such as inland rail to link remote producers to ports, and the development of new international markets.

"In 1900, over the weighted average of a range of agricultural products, the farmer received about 85 per cent of the final sale price," Mr Joyce said.

"By 1950 they were getting about 50 per cent. And now they get between 10 and 15 per cent.

"When people say let's look for more efficiencies in the farm sector, you are looking at the most efficient farm sector in the world and there is not much else to do."

'Take it or leave it' contracts

The National Farmers Federation (NFF) says farmers are largely price-takers in the market and have been forced to accept 'take it or leave it' contracts and questionable business practices.

Supermarket giant Coles faces a legal battle with the ACCC over claims it forced small suppliers to pay "rebates" or face commercial consequences.

Mr Joyce told Fairfax Media farmers are paid an hourly rate less than half that paid to coffee shop waiters because of exploitation by dominant market players, including processors, abattoirs, infrastructure operators and retailers.

"When we work out the wage equivalent of what the dairy farmers are paid, they are getting paid between a half and a third of what a waiter in a shop gets paid per hour," Mr Joyce said.

"So that's running your own business and that's not fair. Even in China, they said that's absurd because these are the people who should be paid the most."

Mr Joyce's push for more action to improve returns to farms comes ahead of a new Paddock to Plate food report to be released this week which calls for a relaxation of workplace laws, deregulation of trading hours, more visas for overseas workers and fewer restrictions on land use.

The NFF, the Australian Food and Grocery Council, the Australian Logistics Council and the Australian National Retail Association want the Coalition government to slash regulation associated with the $311 billion industry which represents 21pc of Australia's GDP.

The report calls for easier access to overseas workers through the seasonal workers' program and the working holiday visa schemes because the current arrangements were too expensive for farmers to administer.

The food industry also wants more flexible labour awards and agreements.

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29/09/2014 9:18:41 AM

On the right track with this Barnaby,implementing it will be the challenge,by getting it right agriculture has a strong future in Australia
Andrew T
29/09/2014 9:59:20 AM

If you really want to compare primary producers with coffee shop workers, please compare the appreciation in value of producer's assets in say 2000 and today, with those of the coffee shop workers. Think I know where I would prefer to be (and it wouldn't be in a coffee shop).
29/09/2014 10:00:18 AM

Yes but is he going to act on his/the 7 Senate Review recommendations of the Cattle Transaction Levy mess the Nationals created??? Or is he going to come out with the tired old response that the minority, "industry" did not support them, and of course "industry" under the AMLI Act 1997 are prescribed government bodies/officials!!
29/09/2014 2:38:41 PM

Why do so many in the ag space believe legislation is the answer? It may be part of the answer. How you organise yourself is the other critical issue. The Minister should focus on this because many in the industry don't. The history of regulation has not really helped ag. It may have sustained prices however ag has not fared as well in the deregulated world. Dairy farmers wages is a classic example, not even a $1.92 billion dairy industry adjustment program paid for by taxpayers solved their problems. The Minister would do well to lead on this issue and not seek solutions from the past.
29/09/2014 4:44:48 PM

How many million does the coffee shop worker have invested in the buisness Andrew T. You sound like a full blown communist.
qld mum
29/09/2014 4:59:42 PM

A T. I would hope the value of land appreciates. Given the costs, time & labour associated with preservation of land. Control of weeds, feral animals. Flood and drought mitigation and massive infrastructure costs when Floods and droughts are 'once in a hundred years' events. A valuation on a piece of paper does little to aleviate running costs for land. Let alone make it more productive To ensure land continues to be productive & healthy into the future it costs money. I will note. I Love coffee shop workers, one of my kids was one during uni. She had no costs though, for not bad money.
Jock Munro
30/09/2014 5:30:31 AM

Minister Joyce well understands the extent of the problem where growers have little equity in the market place- wheat deregulation robbed growers of all equity. However, he will struggle with the Liberals who represent big business and have no regard for farmers. The Labor Party will act as a spoiler and exploit the differences between the Liberals and Nationals as they did in the wheat single desk debate. (See youtube-'Liberal Wheat Treachery").


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