The facts are on the table for change

20 Aug, 2012 02:00 AM
Margaret Sullivan and GrainGrowers' WA senior field officer Ray Morgan.
Margaret Sullivan and GrainGrowers' WA senior field officer Ray Morgan.

FOR Varley Country Woman's Association president Margaret Sullivan, today is the beginning of change.

In a passionate presentation to the Varley meeting, Ms Sullivan outlined a broad range of issues that needed to be heard by city people. The following are her thoughts on agriculture's future and where opportunities may lie.

Margaret Sullivan's Varley address:

"As with any business, farmers cannot remain in business for the long term unless they are profitable.

"So, farmers are looking at options other than agriculture.

This includes selling or leasing their land for plantations, subdivision for housing, and sale to the highest bidder.

"Increasingly, these sales are to foreign interests who are then producing food for export to their own country - food that we should be selling to them.

"Although the loss of productive farming land is of concern to thinking Australians, in fact it would not happen on a large scale if farmers could be confident of covering their costs, making a wage in the order of the average wage that our workers take for granted, and making a clear profit on their investment.

"Each business in the food supply chain from paddock to plate needs to be able to be profitable.

"Without profitable farmers there is no food to supply, and without profitable processors, the produce that is grown loses a large domestic and export market.

"The government is currently developing a National Food Plan but one of the government's main priorities seems to be that the price to consumers should be as low as possible.

"There are no practical ideas to assist farmers to operate more efficiently or to ensure the sustainability of agricultural enterprises.

"The Australian Government considers that competition is by far the most effective means of exerting downward pressure on grocery prices.

"In 2008, in response to community concerns about rising food prices, the ACCC held an inquiry into the competitiveness of retail prices for standard groceries.

"Part of the recommendation of this inquiry was to introduce more competition into the retail sector by encouraging foreign direct investment.

"So, our major supermarkets and specialty retailers will have future competition from international supermarket chains.

"This will almost certainly lead to further downward pressure on the prices paid to suppliers.

"The two major supermarkets are now using fresh food as a loss leader to try and destroy their competition.

They say the prices paid to farmers will not suffer. Given the supply to these supermarkets is by contract, the fact is that only the large agribusinesses with large economies of scale have the resources and bargaining power to do business effectively with these retailers, and have the opportunity to set a selling price to cover their costs and make a small profit.

"Further, we have the food and beverage major company Lion warning that the continuation of the discounting of milk by the supermarket giants has slashed their profitability so that it no longer makes economic sense to supply fresh milk to parts of the country.

"This will leave these consumers only able to buy UHT milk.

"Presently, our family farmers are price takers and while the prices actually received for their produce may be gradually rising, the input production costs are increasing at a greater rate.

"Farming in Australia is a high risk business.

As wage earners have the protection of a set minimum wage, could primary producers have the protection of a floor price for their produce?

"Could regional floor prices for primary produce, being the primary producers' cost of production plus a profit margin, be implemented?

"Could farmers' organisations collectively bargain to set selling prices for produce?

"This may seem a simple solution, but it would be quite complex and difficult to implement.

"There has to be a time when the power of the large supermarkets, the protection of the consumer at any cost and the future of a viable source of good quality fresh food in our country, will all have to be examined and balanced so the supermarkets cannot use primary produce as loss leaders, to the detriment of farmers.

"Consumers must pay what fresh food is actually worth and farmers should have the opportunity to operate a viable business for their future, and the future of their children and grandchildren.

"Can we wait? I think not.

"Today is the beginning of change."



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