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 Ripped off? Prove it, says ACCC 

Ripped off? Prove it, says ACCC

8/05/2008 10:27:00 AM
The Australian Competition and Consumer Commission has attacked farmers for failing to bring concrete, credible examples of market power abuses by supermarkets to its inquiry into grocery prices, and for relying instead on anecdotal accounts to argue farmers have been ripped off.

There has not been a single submission to the inquiry suggesting farmers have been dudded by the two major grocery retailers, according to ACCC chairman Graeme Samuel, who is urging farmers to come up with specifics rather than vaguely suggest contracts may be dishonoured or farmers not fairly paid.

But the National Farmers Federation says it can't do much if farmers don't come forward and provide that information and has challenged the ACCC to use its resources and powers to investigate the smoking guns and anecdotal stories.

Mr Samuel said all he needs from NFF, or any farmers, is a name.

"It's frustrating for us, it's baffling, it's bewildering…" Mr Samuel said.

"I said to NFF 'please, you are the points of contact with the farmers'.

"If they have anecdotal information that there's a problem we want to know more.

"But no-one can give us any specific examples, no-one can name any individual that's got a problem."

Mr Samuel said NFF had suggested such farmers may be intimidated, but argued the ACCC can protect against intimidation by subpoenaing witnesses and having hearings in confidence.

"We're trying to encourage, entice, and do whatever we can to get any growers that have some real-life problems to come and tell us about them.

"But nothing specific is coming forward that would suggest bullying or harassment or oppressive dealings occurring, particularly by the major supermarket chains.

"In fact, to the contrary, those farmers that are coming forward say they've got dealings with the major supermarkets and they're very happy with them."

While Mr Samuel would not comment on suggestions the problems weren't with the major retailers but with processors and central markets, he said the inquiry was getting together confidential information in relation to the application of the horticulture code.

NFF vice president, Charles Burke, appeared before the inquiry in Canberra last week and said they'd been forced to only provide anecdotal evidence because farmers would not come forward.

"There's an amount of frustration because we all hear anecdotal stories about growers getting the raw end of contractual arrangements with processors or retailers," Mr Burke said.

"What's frustrating is that nobody is prepared to come forward and put some facts behind some of these stories and that's frustrating us and it's also frustrating the ACCC."

Mr Burke said there was no point making claims or accusations that couldn't be substantiated and called on the ACCC to use "all its powers" to continue investigating these matters.

He said NFF doesn't have the capacity to go investigating situations if they don't hear concrete evidence of them occurring.

"We have to be careful not to start putting numbers on things and also some times some of these things are simply just noise and nothing more…if there's a problem we are happy to go and push on behalf of the people experiencing those problems but if we don't get the information we can't go jumping at shadows.

"It's not worth (damaging) the credibility of the farming sector or NFF to start making accusations."

Mr Burke said despite the lack of evidence though, the facts still remained that the farm-gate price of many commodities has stayed relatively stable and in some cases dropped while the retail cost of some of those items has gone up exponentially.

"We've got figures to show that over a two year period the price of beef has dropped 13 per cent and the price of lamb has dropped 18 per cent at the farm gate," Mr Burke said.

"I'm damn sure that people in the supermarket aren't paying 13 per cent less for beef and 18 per cent for lamb.

"We don't know what is happening in the middle, and we aren’t suggesting there's any misuse of market power - what we are saying is the price at the farmgate is vastly different."

AusVeg chairman, David Anderson, said he hasn't asked farmers for any documented evidence of market power abuses because it wasn't his "place" to do that, but he had plenty of anecdotal evidence it was happening.

Mr Anderson said the majority of contact he's had from growers on market power issues was not regarding the duopolies.

"The bulk of contact I've had on this is to do with the major processors, the pack houses, the central markets and their associated companies."

*We want to hear from you if you have a specific example of market power abuses.

Contact Lucy Skuthorp or (02) 6273 4090 or lucy.skuthorp@ruralpress.com or Vernon Graham on (02) 4570 4497 or Vernon.graham@ruralpress.com.

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What is called for here is transparency and accountability.

Farmers have to adhere to this policy through the tax system and various quality assurance systems.

Government, not farmers, allow monopoly systems to develop, so therefore it is government responsibility to monitor corporate processors and retailers to ensure that the producers of food and fibre in this country are not forced into welfare situations.

As a processor executive once said - we don't want to break you - just keep you crawling around to supply us.

Farmers will never "blow the whistle" on retailers and processors who squeeze them as they will be blackballed and unable to feed their own families.

It is up to Government to create transparency - after all they don't have any trouble monitoring taxes.

Posted by outback g on 9/05/2008 8:17:49 AM
I'm sorry, but how is Graham Samuel "attacking" farmers?

It seems to me that he is only do his job - urging NFF to put forward hard evidence so that he can act in the interests of fairness.

Where was the "attack"?

When will the rural press and lobby cease jumping at shadows and stop inflating every challenge or criticism of agriculture or agricultural groups - large and small - as an "attack" against farmers?

This attitude might sell newspapers, but surely it can't be good for the image of farming or the long-term interests of farmers?

It strikes me that it simply fuels a image (including a self-image) of farmers as victims.

Posted by Corey Watts on 9/05/2008 8:59:22 AM
Why not settle this argument once and for all and make the retailers prove they aren't ripping off the farmer.

They have the resources and market share to force suppliers to do their bidding.

Why not put the burden on them instead of the always struggling agricultural industry.

It is interesting to see the results of the fuel retailing and how Shell has come under the spotlight.

Why not with Ag now??

Posted by Turn it around on 9/05/2008 9:02:37 AM
How could the ACCC be so naive to think that where the supermarket buyers have all but killed out all competition for products like lamb that farmers will be game to speak against these buyers.

Better to have a buyer than have no market at all.

I agree with Outback G that nothing has been done by Government to ensure a level of transparency.

Surely the ACCC has the power to gain documentation on the price that the farmer gets versus the price it is on the shelf for.

I guess it all depends on whether this Government cares whether we are still able to produce food in our country.

Posted by Not so naive on 9/05/2008 9:13:49 AM
ACCC cop out? Don't have to prove that.

The ACCC should be using their powers and resources to find where the consumer's money is going.

It's not anecdotal that there is a significant mark up between the farmgate and the retail outlet.

Every produce handler outside of a farm, having heard Mr Samuel's comments, must be laughing at their good fortune in having such an inept organisation such as the ACCC investigating unethical profiteering.

Posted by GJR on 9/05/2008 9:22:45 AM
The ACCC could do much more for farmers, supermarkets are just the start, how about looking into the outrageous jumps in fertiliser, and chemical prices.
Posted by qld grower on 9/05/2008 11:34:01 AM
Well this doesn't surprise anyone that the ACCC disagree with the farming community.

After all they have to speak the voice of the government who pays them.

To go against Kevin Rudd you would be buying Australian product as he is promoting China as hard as he can go and we see their products on our shelves everywhere.

Even today talking of the tragedy in Burma he's going to talk with China!!

Sorry, I won't buy your overseas products because they are grown in sewerage and the like, whereas we have the best farmers in the world producing the best product.

Why aren't we promoting it and giving the farmer the right price.

No wonder shares in the two big supermarkets are at the price they are at.

They are profiteering from the world's farming communities.

Looks like ACCC have other agendas and it doesn't seem to be making sure everyone in the farming community gets a fair go, not even in the drought.

Come on where is that Aussie spirit that we talk about?

Posted by True Australian on 9/05/2008 9:39:45 PM
As a couple of people have said, it's not the farmers that are "Whinging", the government has instigated an inquiry into grocery prices at the instigation of consumer groups.

Farmers have been dragged into the debate because we are the producers of the food.

It has never been suggested that farmers have been ripped off.

Of course we can say with all confidence that a comparaison between farm gate prices and supermarket prices will show a growing disparity, over the years, between the 2 prices.

When you take into account that the farmer pays for the packaging and the transport to market and does not have any power whatsoever to "dictate" or establish a fair price for the produce you end up with a situation where the big two decide how much they pay and how much you, the consumer will pay to them.

The situation on the land is akin to you going to the supermarket putting groceries in the trolley and at the check out deciding how much you are willing to pay for the stuff without any knowledge or understanding of how much it cost to produce, sort, package and transport the goods!!!!!!!

Maybe I should try this next time I go shopping!!!!!!

Posted by Peter on 10/05/2008 5:23:27 AM

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