On August 26 this year, Treasurer Josh Frydenburg instructed the Australian Competition and Consumer Commission to conduct an inquiry into perishable agricultural goods.
By December 10, and 80 submissions later, we had a comprehensive report that spelled out what was already obvious - that current trading laws meant farmers had little bargining power.
The market bottlenecks at the processor and then again at the supermarket level, all of whom keep their cards close.
With limited transparency and opaque trading terms, producers - especially those with perishable products like beef or lamb that have to be processed at a set time - are left dancing to the tune of the big meat buyers or supermarkets.
Likewise, how does a $9 roast chicken at the supermarket pay when you consider all the infrastructure, feed, energy, transport, processing, packaging and cooking that goes into that product?
There's barely any chicken feed left for the chicken farmer.
A lot of what the ACCC has called out in this latest inquiry were also reasons behind the creation of the voluntary Food and Grocery Code of Conduct - but in being voluntary, that code failed to bring transparency and equity.
Read more:
Under Tony Abbott's government in 2013, the federal Coalition was split over the matter. Aldi, Metcash and Costco were absent from the process altogether, leaving only Coles and Woolworths at the planning table with the Australian Food and Grocery Council.
In 2015 the ACCC was given a new division specifically for the purpose of investigating market power abuse, but the changes didn't give the government more backbone, so we're still trying to address the same concerns the Liberals in particular failed to address from the outset.
Even before this latest inquiry, it was clear that existing measures had been no more than window dressing, hence the need to form other frameworks like the Dairy Industry Code, which has provided better transparency and negiotiating power to suppliers.
Dairy is only one piece of the puzzle, but based on the response from dairy farmers when the opening farmgate milk prices were released in June, there is now a structure in place that returns some equity to producers.
This shows that a code can work, but it works because it is mandatory.
Andrew Norris
Editor at The Land
Editor at The Land
