Focus on Agricultural Markets this Election

Article by: Hari Yellina

Making improvements to the transparency and efficiency of agricultural produce markets is a never-ending endeavour. This is because industries, markets, and the entire economy are always evolving, thus, market regulation and competition policies must adapt as well. While change and the need to adjust are generally sluggish, a number of variables are converging at the present, putting market regulation under the spotlight as we head into a federal election campaign. COVID-19 and limited supply chains arrived first, resulting in soaring prices for critical agricultural inputs such as fuel, fertiliser, and chemicals.

Growers have reported that rates at the farm gate have not kept up with the increased cost of production over the last two years, indicating that they have been squeezed more than usual. In tandem, the Australian Competition and Consumer Commission presented a report on its Perishable Agricultural Goods Inquiry in late 2020, suggesting changes to the Food and Grocery Code as well as government support for price transparency initiatives. The Food and Grocery Code Independent Reviewer’s annual report for 2020-21 noted opportunities for retailers to better fulfil their own voluntary criteria in dealing with price increase requests from suppliers. Different segments of the agriculture lobby have embraced competition and market policies as a fundamental pillar in reaction to these challenges.

Ausveg, Australia’s top vegetable organisation, is pushing for free, reliable, and real-time market data and consumer purchasing trends. Meanwhile, the National Farmers’ Federation is pressing for competition law change. Strengthening unfair contract prohibitions, establishing a Perishable Goods Advocate to advocate for growers’ rights, and considering making a code of conduct required for all agricultural commodities markets are all examples of this. It’s unclear whether either major party will take any of these ideas to improve the efficiency and fairness of agriculture markets to the election.

The LNP in government had already begun allocating funds to industry-led price transparency schemes. Agriculture Minister David Littleproud has also hinted at a desire to update market rules in media comments. The Labor Party hasn’t said anything about agricultural policy in general, and little about markets in particular. Given the current state of the industry, the health of our markets will be a major concern for producers in the run-up to the election and beyond.