A fair society cannot allow its farmers to stay living in servitude

There is a concept called responsibility. It means we are all answerable not only for our actions but also for the consequences of our actions. If we injure third parties, intentionally or not, we are responsible and we can be held responsible.

There is also Newton’s Third Law of Motion: For every action there is an equal and opposite reaction. In the context in which I am writing, it means that we do not operate in isolation. If we consciously and deliberately do something, there will inevitably be consequences.

Tasmanian farmers, for all their worthy endeavours, for all their valour in helping to keep this economy moving, are often just pawns in a game, a game in which they can become innocent bystanders, the victims of other people’s actions.

I am reminded of this lack of market power and influence in the marketplace every day.

The federal government has promised to crack down on the imbalance in the market between those who produce our food and those who market it.

Agriculture Minister Barnaby Joyce wants Australian farmers to get more of the final retail price of what they produce. Historically in Australia, farmers have received as much as 90 per cent of the final retail price. But not any more.

The government’s Green Paper on agriculture confirmed that today farmers receive, on average, just 10 per cent of the final retail price of the commodities they produce. In many instances, they are being exploited by monopolies and duopolies further up the processing and marketing chain, held to ransom on price. They have no choice but to take the price being offered.

In launching the Green Paper, Minister Joyce said “a farmer that gets between 10 and 15 per cent of the final price when they have done the majority of the work; (that) is inherently unfair”.

Another area where farmers become pawns in somebody else’s game is in industrial relations. A dispute develops between a business and its workers, a shipping line and its stevedores, a bank and its staff – and the wheels of industry grind to a halt. When that happens, farmers are in no position to leave their crops in the ground, to stop milking their cows, as they await settlement of the dispute. In farming, you use it or you lose it. You can’t put Mother Nature on hold until the barricades come down.

Farmers invest substantial amounts of money in producing crops to point of harvest. These crops are perishable and so must be harvested when ready – they can’t be held on farm, they can’t be stored and, as they may have been grown to one processor’s unique market specifications, it is unlikely another purchaser will be found. In any case, even if alternative customers could be found for some or all of the crops, the short nature of the notice would inevitably impact on any price received. Milk producers are equally challenged – with high levels of investment and a very perishable product.

Farmers have been watching recent discussions with respect to union expectations about future wage rises with great interest. Unions are seeking guaranteed increases at or above the rate of inflation because they say that employees should be given a ‘fair go’.

Farmers think they too are entitled to a fair go. They would like to receive a guaranteed price increase year on year above the rate of inflation, as many employees have done over recent years.

According to Australian Bureau of Statistics figures, the total increase in national CPI in the six years from June 2009 – June 2013 was 9.9%. We know agricultural input costs rose more rapidly than the CPI because of the heavy industry reliance on imported goods and currency exchange rates.

Let’s look at just one example of how this has played out in the paddock. Growers of peas have seen a fall of 30.5% in their contract price since 2009; and they are now $177 per tonne worse off now in dollar terms. These figures would of course be even higher if CPI were calculated at a compound rate; and the real rates of agricultural cost inflation and exchange rate variation were factored in.

Farmers produce our food; yet they are often at the bottom of the food chain, the last to be considered, when it comes to banking the proceeds of that production. They have to take what they can get when it comes to prices in the market. When middlemen, retailers and particularly supermarkets are involved, farmers are the true pawns.

Minister Joyce last week said that family farms are the cornerstone of rural and regional Australia. He added that “the way a nation treats its farmers is a litmus test of the political system”.

As it stands, the results of that litmus test are not very flattering to us as a wider society.
TFGA chief executive Jan Davis