Push on for ACCC ag unit

16 Sep, 2015 01:23 PM
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NSW Farmers president Derek Schoen.
We are very impatient to see the Commissioner appointed and to hit the ground running.
NSW Farmers president Derek Schoen.

FARMERS want the federal government to move faster implementing moves to boost the Australian Competition and Consumer Commission’s capacity to adequately analyse and respond to competition concerns in agricultural supply chains.

In July, the Agricultural Competitiveness White Paper unveiled $11.4 million over four years to establish an Agricultural Enforcement and Engagement Unit with additional staff to conduct investigations and engagement in rural and regional areas.

The ACCC’s improved engagement with the agriculture sector under the Coalition’s plan includes appointing a new dedicated Agriculture Commissioner.

On the White Paper’s release, the government said a more farm-savvy and proactive ACCC would encourage fair-trading and strengthen competition in agricultural supply chains.

However, the government has not yet announced specific details of the new Agricultural Commissioner or who will take on the role, or how the ACCC’s new farm unit will operate.

Australian Farm Institute executive director Mick Keogh has been touted as a potential appointment to become the inaugural Commissioner given his experience advising government on rural and agricultural policy over the past decade and in-depth capacity to conduct specific, related economic analysis.

Concerns have been raised by stakeholders that staff could be appointed to the new ACCC Engagement Unit, despite the Agricultural Commissioner not yet being appointed.

An interview request to discuss the new agricultural landscape with the ACCC – including Chair Rod Sims - was declined.

Instead, Fairfax Media was referred to a media statement released by the ACCC when the White Paper was launched in early July by Acting Chair Delia Rickard.

Ms Rickard said the ACCC would prioritise detecting, deterring and taking action against conduct that breached the Competition and Consumer Act that affects farmers and small businesses in rural and regional areas, particularly cartels, misuse of market power, and misleading or unconscionable conduct.

She said the ACCC would strengthen its engagement with agricultural industries to understand factors effecting competition in rural and regional markets.

The ACCC said the government’s announcement gave it additional resources but not new powers.

At the recent inquiry into the red meat processing sector, NSW Farmers president Derek Schoen was asked whether the Agricultural Commissioner would help to address collusion issues within the beef sector.

Mr Schoen said any added experience of the rural industry at the ACCC “would be greatly welcomed”.

He said NSW Farmers submitted to the ACCC’s inquiry three to four years ago on the Cargill-Teys merger that the competition watch-dog “had no idea how a saleyard system operated”.

“We took some of the commissioners to the Wagga saleyards just so that they could see how the stock auctioning system operated,” he said.

“A commissioner for the agricultural side of things in the ACCC would be greatly welcome, to get that experience into the ACCC.

“In the last dealings that we had with the ACCC, it seemed like the staff were fresh out of university and had absolutely no industry experience at all.

“So it will be great to see someone there with a rural background.”

NSW Farmers policy director John Dunn also raised concerns about the ACCC’s methods of assessing market competition in certain demographics as being “too simplistic and outdated”.

Mr Dunn said the ACCC’s analysis of the recent JBS acquisition of Primo made note of a geographical distance of 500 kilometres which defined the market.

But he said NSW Farmers believed that was “an inappropriate mechanism to assess competitive tension, particularly in the abattoir space”.

“More generally, the ACCC's assessment seemed to conflate all abattoirs as the same business structures,” he said.

“From our members' perspectives, they did not take into account the different types of produce that specific abattoirs specialised in.

“It is as if the ACCC just assumed that all abattoirs were the same and as industry and farmers we know that that is not the case.”

Mr Dunn also welcomed the government’s decision to appoint an agricultural commissioner to the ACCC via Agriculture Minister Barnaby Joyce.

“We eagerly await that appointment because we think that that position will enliven and create more accuracy in the ACCC's assessment of both competition policy issues and consumer protection issues,” he said.

Mr Schoen told Fairfax Media the ACCC’s agricultural commissioner and engagement unit "needed to be implemented ASAP”.

“We’ve been calling for something in this area for a long time,” he said.

“We are very impatient to see the Commissioner appointed and to hit the ground running.

“This new Agricultural Unit has to be properly resourced and the Commissioner has to be allowed to appoint the correct staff with experience.”

Mr Schoen said the impetus for the government to act on supply chain transparency concerns in the red meat sector came after the boycott at the Barnawartha saleyards earlier this year.

“Some describe it as collusion,” he said.

“That occurred only two weeks after the ACCC gave the go-ahead for the JBS Primo takeover.

“On two occasions we had warned the ACCC that there was consolidation happening in the red meat processing industry and that we were getting consolidation by creep.”

The Senate Rural and Regional Affairs and Transport References Committee’s inquiry into market consolidation in the red meat sector is due to report in March next year.

Victorian Nationals Senator Bridget McKenzie said of collusion, anybody that had been hanging around rural communities for long enough “has always heard of the wink wink, nudge nudge: 'I will take that pen; you take that pen. Away we go and it is all sorted’."

But asked whether he had any evidence for the committee that collusion occurs in saleyards throughout NSW and regional Australia, Mr Schoen said, “It is very hard to get this as concrete evidence”, which the ACCC found a very difficult task.

“They said they had gone to the Barnawartha saleyards to interview the agents and producers,” he said of the boycott which sparked the Senate inquiry along with the JBS-Primo take-over.

“This highlighted the lack of experience that the ACCC have in the rural sphere.

“They said, 'No-one would talk to us.' I said, 'How did you turn up?' They said, 'In a suit and tie.' I said, 'That's a dead giveaway. No-one is going to talk to someone in a suit and tie,' especially after what had happened the week before at the Barnawartha saleyards.

“There was a lack of experience there, but there has been anecdotal evidence for over 25 years that this has been occurring.

“It is right through the whole system.

“Unless we are going to put CCTV cameras at the saleyards it is going to be very hard to get this evidence.

“We are really looking for a code of conduct so that the saleyards can operate with the producers' confidence in the system.”

FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

Agribusiness Council
17/09/2015 4:02:37 PM

It is likely that the Brookfield-Asciano decision will be the next flashpoint. More broadly, relying on a public-service measure to 'help' agriculture is not a sure fire recipe for success. The Australian agribusiness sector should be generating the takeovers, not responding to them. Policies of all Aussie Governments should be considering how to promote that - It'd get a better bang for taxpayers buck than tweaking existing policies and public systems (which have got us to where we are today), and help drive an new agripeneurial spirit thru our economy. Always better to lead and not follow.
Percy
17/09/2015 5:47:44 PM

What we really need is better and much faster outcomes when product is dumped onto our markets. A slap on the wrist to overseas suppliers is not adequate after they have sent our own farmers broke. Quality control of imports also need to be upgraded to at least our own standards.

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