Less competition means less for farmers, consumers and the Australian economy

The National Farmers’ Federation (NFF) wholeheartedly supports comments made by the Assistant Minister for Competition Dr Andrew Leigh at the F.H Gruen Lecture on corrosive effects of ever increasing market concentration on Australia’s productivity, innovation and cost of living.

The NFF strongly backs calls for immediate and urgent reforms of competition policy in Australia to ensure farmers and consumers get a fair go.

“Farmers can attest to the corrosive nature of markets defined by concentration. Across every market in the food and fibre supply chain, a handful of companies control the entire market,” NFF CEO Tony Mahar said.

“This means farmers’ revenues are squeezed unfairly and consumers are still paying some of the highest prices in the world for their groceries.”

In his speech, Minister Leigh highlighted the direct link between market concentration, low productivity growth, low wage growth, and high consumer prices.

“It still astounds me that Australians pay some of the highest prices in the world for groceries, despite the fact we are renowned for producing food and fibre so cost effectively that we can export it to all corners of the globe,” Mr Mahar said.

“Addressing the competition crisis in our economy is wholly a cost-of-living issue. If the Government wants to ease the price pressures at the supermarket till, ensuring competitive and innovative marketplaces is the only way to go.”

Minister Leigh further notes the need to review and reform Australia’s competition policy framework.

While the NFF would welcome such reviews, there are practical reforms that can be undertaken right now:

• Introducing codes of conduct for food supply chains defined by concentration and unfair practices, such as the poultry meat sector, should be an absolute priority.
• Introduce legislation that bans unfair business practices.
• Introducing a legislated right to repair for farm machinery, as recommended by the Productivity Commission, so farmers are not ripped off by the big-end of town for things like spare parts and locked into expensive repair networks.
• Establish the office of the Perishable Agricultural Goods Commissioner to provide advocacy on required competition reforms within food and fibre supply chains and progress compliance and enforcement action.