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Balance of Power

One of the biggest problems for all farmers (and suppliers) is the economic power of large supermarkets.   Or, in beef’s case, the economic power of the four large multinational  processors based in Australia.

I always feel concerned when I read things like the NFF and state farming organisations working together with major supermarkets ‘for our farming future’.

Am I the only one who thinks that it might be for the ‘farming of the future….totally controlled and regulated by big businesses?? 

The one thing that supermarkets focus on, above all else, is the drive to maximise their profits. 

And they do this by ensuring all their products, fresh and manufactured, are supplied at ever reduced costs to themselves.  They also ensure profit by developing their own brands and then, in the tin or container, mixing cheap and uncontrolled, unregulated product from overseas with Australian grown, heavily regulated, and environmentally friendly goods.  This drives their cost of manufacture down, gives them a greater margin of profit, and bringing in those overseas goods helps them to force local prices downwards as well.

The corporate world of food seems unconcerned about the lowering of living standards and fast rising cost of the production of food, concerned only with their profits and reports to their shareholders.  They seem unconcerned that there is no real reason for farmers to continue producing if it is going to get harder and tighter each year.   

It beggars belief that they would assume that farmers will continue to produce good safe food or cattle for supermarkets or processors to boast about – as if they, the supermarkets, actually grow it and make it safe, at tremendous cost to themselves!!!!   

Processors have sold more good, healthy, clean, green beef  for more dollars per kilo than ever before into the international market, but prices at the Australian farm gate have remained as low as the last twenty years.  One supermarket does not allow their cattle suppliers to sell their cattle on the open market, allowing them to only sell directly to the supermarket’s assigned buyer for a predetermined price – that is price and market manipulation !

Everything that these corporate giants boast about in their marketing is actually the hard work, continued investment, and product development, that the grower carries out himself – only to find that he is required to expect considerably less for his quality product than he needs to stay profitable.  Farm profitability is no concern of the supermarkets, or the processors of red meat. 

Recently we read about one supermarket being accused by the ACCC of unconscionable conduct for the way they treated their suppliers.  If ACCC was more successful at enforcing fines for this sort of behaviour, the supermarkets would be looking at fines of millions of dollars. 

The reality is that millions of dollars in savings are instead being made by the supermarkets when dealing with their suppliers.  It is spoken about every now and again in the early evening television  (when they are short on any other good stories)…… but still the consumer goes to town each week and looks for the cheapest price without any thought of how this product could have become cheaper when everything else in our society is costing more. 

So why are our State Farm Organisations (SFOs) and the National Farmers Federation (NFF) ‘partnering’ with these large companies, and promoting that very fact at their AGMS and field Days?  Why are they selling out to the very people who control prices and production on Australian farms?

Their actions provide these large companies with an unprecedented opportunity to ‘connect’ with the agricultural sector,  and ‘get into bed with’ our peak representative bodies.  They then successfully use the information and the contacts to further their own business. 

For example:  NFF’s  ‘partners’  gain access to at least 27 member organisation including farm representative groups, commodity councils,  Peak Bodies,  and agribusiness members who collectively represent thousands of farmers across Australia.

This means a direct access to NFF member organisations, where there is provision of critical feedback on industry developments and issues affecting your business, or collaboration with our media and communication tactics.  By connecting with our representative boards, these large companies can track what is happening in the future, and can use their connection to influence aspects of production, can prepare themselves to occupy a certain space in our business and our ‘worldwide image’  –  and a glaring example is the current “Round Table for Beef Sustainability”  which is nothing more than a marketing move to persuade gullible consumers,  an opportunity for the processors to influence public perception of factory-fed beef to be equal to grassfed healthy beef, to require regulation over every farm to ensure sustainability, and so much more. 

Hopefully all producers can see through this latest ploy to gain multinational control over the family farm in Australia.      

Continuing on with the partnerships that have developed in agriculture.  An NFF ‘partner’ would have to pay out $100,000 plus GST for the privilege of the following…………

Benefits for their sponsorship include complimentary sized exhibition booths at Congresses, AGMs and Field Days,  and the option of chairing Congress sections or hosting a Congress cocktail party!!!   It allows access to all NFF members and the state farming organisations, to Council Presidents and CEOs of all NFF’s member organisations.   What about complimentary use of the NFF boardroom in Canberra to NFF major partners when visiting or holding meetings in Canberra!!

You, the producer, need to read all the facts and ‘deals’ these large multinationals and large companies receive from your organisations when they sign up.  You need to be more aware of what is happening in your business – it does directly affect you, and your farm!!

Their sponsorship allows access to NFF media and communication activities,  and they garner ‘credibility’ as a good partner to have around with their logos in newsletters and on Facebook,  Twitter etc.

Everyone gets used to seeing them around agriculture, to having them with their fingers in our business, and does not seem to register that they are on the other side of the farm gate when it comes to price, control, regulations, environmental pressures, and their special requirements when dealing with these big fellows directly.  (Ask the apple farmers about the special crates they have to deliver their fruit in – cannot use crates of their own that cost them to buy, they have to use ‘special’ crates that cost a hire fee every time they deliver their product to the factory door)

(Oh yes, there is that small matter of all produce having to be delivered directly, at farmers cost, to the factory door).

(And remember too the very tight ‘specifications’ that the large companies require, which in effect allows them to pay less for your product – with no consideration for the cost of producing that product)

Over many years we have seen evidence given to parliamentary enquiries and ACCC which reviews their highly questionable trading practices,  yet we’ve never seen the ACCC be able to put a stop to or regulate their practices. 

The reality is that NFF and the State Farming Organisations (SFOs) are so entwined with these large businesses, so reliant on their sponsorship, so unrepresentative of the actual farmer, that they are not picking up the baton on behalf of their producers, but instead passing it to the large companies – simply so they can beat us over the head with those batons.

Beef producers have a unique opportunity in the near future to  prise themselves away from the complicated organisation that we have representing us and oversee our own industry.  We need to stay informed and calmly tell our Minister for Agriculture Barnaby Joyce that we want control of our own levies, mastery over our own business, management of our own board, and total accountability and transparency.   

At Rockhampton, Cattle Council of Australia  told the Senate Hearing into the collection of our levies that they sit on 93 other Boards  –  just how many people, organisations, bodies, Boards and multinational companies have got their hands in our pockets???

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