This summer has been a turbulent time for Australians as a season of drought gave way in large parts of the country to Dorothea MacKellar’s “flooding rains”, demonstrating the beauty and terror of Australia – and the perils of living and working on the land.
Changes in seasons and climate have been constant for millennia, and Australian farmers have defined the Australian spirit by taking the good with the bad and living with extreme seasonal variations.
The occasional stench in the farmer’s nostrils however is the complexity added to farming by markets and their regulators. At the moment we have a combination of bad smells that together reek to high heaven.
The pressing concern that I myself have as a dairy farmer is the price war initiated by Coles supermarkets’ setting milk at $2 for a two-litre carton in their “Down Down” campaign. Woolworths and many other retailers followed suit, but a Woolworths spokesperson admitted it was not sustainable for the dairy industry.
Another spokesman for the National Retailers Grocers Association said categorically that the winner short-term may be the consumer, but the loser out of this price war was the farmer. In the long-term, the Coles-Woolworths duopoly wins from these price wars, not consumers and farmers.
At the time of writing, the price war has expanded to cream, butter and cheese. One analyst said that Coles was already making enough on those products that it could suffer a brief period of margin loss to expand its market share.
Farmers need to educate consumers fast on the long-term impact that supporting below-cost milk prices will have on farmers and, ultimately, on the range and availability of Australian milk itself on supermarket shelves.
Coles only cares about its bottom line. The two supermarket giants make hundreds of millions of dollars if not billions a year. The duopoly’s executives can leave with multi-million dollar payouts, but if the supermarket giants make bad decisions against the Australian interest, farmers and farming families will be left behind and struggling to make a living on the land.
I have written to the Australian Competition and Consumer Commission to ask its chairman Graeme Samuel if he is going to act swiftly on this. I suspect that this price war is predatory pricing designed to eliminate smaller players. If that is so, then, to paraphrase former ACCC head Alan Fels, the ACCC has to move quickly, because once a price war results in the economic elimination of a competitor, all the rest from that point on is academic.
The silence from Canberra on this price war has been deafening. It’s hardly surprising given that in the past it’s given the red carpet treatment to big business, and the family farms have paid for it.
Even overseas investors get the red carpet treatment from our Government when it comes to our permissive approach to foreign investment in Australian farmland.
In 2009, I was pleased to see the Stock Journal, its readers and others, such as the “Don’t sell Australia short” Facebook campaign, join me in complaining about the sell-off of our farming land to overseas interests.
Our lax foreign investment rules mean that it is only when a single farm purchase reaches the value of $250 million that the Foreign Investment Review Board will consider even looking at whether or not the sale is in the national interest.
Only after we all complained did the Federal Government say it would do an audit of rural foreign investment, and we are still waiting for the outcome of that.
The South Australian state Labor Government is no better. It is happy to let the Canadian-based global agribusiness Viterra run its own inquiry into its handling of the 2010/11 grain harvest.
Some politicians like myself won’t stand for that and I am moving for a parliamentary select committee investigation this week.
Recent examples of the South Australian Mike Rann Government’s mismanagement include:
• River Murray irrigators stuck on 67 per cent water allocation as floodwaters race past.
• The government’s “cost recovery” drive resulting in farmers’ livestock being liable for a new biosecurity levy.
• Axing the farmer-representative agriculture board and replacing it with an agribusiness board that will give a greater voice to big business.
• Natural Resource Management (NRM) officers out of control and exercising more power than the police.
• Plans to install meters in dams and rainwater tanks, so that the government can fine farmers for taking “too much” water from their own facilities.
And the list goes on.
We can survive droughts, floods and whatever else nature throws at us. However, we need a government that will give rural people a fair go.
It’s time to take a stand now to tell Government that food production is the most sustainable industry Australia has. It’s time to get rid of the city-centric focus.
Robert Brokenshire is a Family First Party member of South Australia’s Legislative Council and a Mount Compass dairy farmer. He has previously served as a minister in the Olsen and Brown Liberal state governments. This is an edited version of an article that first appeared in the SA Stock Journal (February 10, 2011).