By Grain Producers Australia Chair and WA Grain Producer Barry Large
There's an awful lot of noise being made right now about the prices every day Australians are being charged at the checkout, whilst the big supermarkets rake-in record profits.
Added to this political rhetoric driven by the cost-of-living crisis is an apparent concern about the need to ensure Australian farmers receive their fair share of the retail dollar.
That's seen the Federal Government trigger several recent actions in response, including an ACCC inquiry which comes on the back of the media pressure applied by Shadow Agriculture Minister David Littleproud, since early January.
Prime Minister Anthony Albanese's media release said last week that over the next 12-months the ACCC will investigate allegations of price gouging and competition in the supermarket sector to "ensure Australians are paying a fair price for their groceries".
One of the key matters to be considered by the competition watch-dog includes "factors influencing prices along the supply chain, including the difference between farmgate and supermarket prices".
The Prime Minister said in the release that "when farmers are selling their product for less, supermarkets should charge Australians less. That's why the ACCC will use its significant powers to probe the difference between the price paid at the farm gate, and the prices people pay at the check-out."
Added to this ACCC inquiry is the recent announcement of a review of the Food and Grocery Code of Conduct to be conducted by former Labor Minister Dr Craig Emerson.
In addition, more than $1 million will go to consumer group CHOICE to provide price transparency and comparison reports on a quarterly basis for three years.
All this talk about a fair go for farmers and pricing fairness might sound fantastically good to the innocent observer.
Pic: Grain Producers Australia Chair and WA Grain Producer Barry Large.
But if you're a grain farmer or a member of GPA that's been advocating for an independent, proactive inquiry into the Australian grains market in recent years, to improve pricing transparency and optimise competition, you may well be left scratching your head.
Meanwhile, in announcing the second review of the Wheat Port Code recently, the government said the findings of the first review handed down six years ago won't be implemented now because so much time has lapsed since 2018, the review's 12 recommendations are now out of date.
It seems not all farmers are worth worrying about when it comes to the prices they receive.
In addition, there's no mention by the Prime Minister and Treasurer – amid all this noise about fair farmgate returns – of the fact they're planning to introduce a new 10 per cent biosecurity tax on all Australian farmers, which will come directly off our bottom lines.
This funding, via a tax disguised as a levy, will go straight into consolidated government revenue.
And there's no guarantee funds will actually be re-directed anywhere to deliver stronger biosecurity protections for farmers – such as those delivered through existing levies.
The level of anger and frustration at this proposal is why 50 farmer groups across the full range of commodities have unified to send a joint letter to the Prime Minister, Treasurer and Agriculture Minister, Murray Watt, calling for this fundamentally flawed policy to be urgently reversed.
This letter includes urging the Treasurer to conduct economic analysis and modelling to provide some basic transparency for producers and industry – at least to justify their policy claim that producers are the only 'beneficiaries' of biosecurity and should therefore be paying this new tax.
We are yet to see a response, but remain hopeful this tax will be scrapped before it's due to be implemented by July 1 this year, given this recent talk about fairness of returns for farmers and politicians being able to break their promises and commitments, to do the right thing.
This rhetoric about cost-of-living and the prices farmers receive is also especially hard to stomach when you consider Australian barley producers only receive about 0.20 cents (1.33 per cent), at best, from a beer that's costing upwards of $15 these days in many metropolitan bars.
So where does the other $14.80 (98.67pc) go to?
From the farm where the barley is produced, through to the beer drinker in the city, there are multiple beneficiaries of that commodity's generation of economic activity.
This includes the level of tax generated for the Australian Government from the excise duty rates that are applied to alcohol sales.
Also, the law indexes the excise duty rates for alcohol twice a year, based on the upward movement of CPI.
Unfortunately, there's no such mechanism between the farm-gate and consumers to ensure the barley producer gets a fairer, increased share of that rapidly escalating beer price twice a year. And beer is one of many, many consumer products made from Australian grains.
Instead, there's a new 10pc tax that's scheduled to start on July 1 – long before the ACCC hands down its findings from this new inquiry in early 2025, which still rely on any government actually deciding to take action, to deliver competition reforms.
Whilst the ACCC inquiry, Code of Conduct review and CHOICE reporting are commendable, Australian grain producers are bemused at why some farmers are judged more worthy than others of such actions that aim to improve fairness, market competition and pricing transparency.
Matters to be considered by the ACCC supermarket pricing inquiry will include, but will not be limited to:
• The current structure of the supermarket industry at the supply, wholesale and retail levels;
• Competition in the industry and how it has changed since 2008, including the growth of online shopping;
• The competitiveness of small and independent retailers, including regional and remote areas;
• The pricing practices of supermarkets;
• Factors influencing prices along the supply chain, including the difference between farmgate and supermarket prices;
• Any impediments to competitive pricing along the supply chain; and
• Other factors impacting competition, including loyalty programs and third-party discounts.
This article was first published on Farmonline, 4 February 2024: HERE
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