Ahhh....Australia! A country that true blue Aussies love....to love! A country of opportunity. A country of a fair go. Where we wish the best for strangers. Where strangers are only too happy to help those less privileged, and desperately in need of help.
No more clearly has this been evident than in the recent devastation experienced during Queensland's floods, and now Cyclone Yasi. Proud to be a Queenslander - but it's much more than that. I'm an Aussie.
Somewhere amongst all this craziness, quite literally between the worst flood in decades and the most powerful Cyclone in living memory, some of our most powerful market forces have the audacity to be just about as un-Australian as imaginable by crippling yet another industry. Perhaps the lowest act of their strategy was to sugar coat the crashing of the milk price with deceipt and propaganda that this discounting "will not affect the Dairy Farmer".
Fact 1 - Supermarkets force Milk Processors to tender for the 'home brand' supply contract, by making shelf space for branded products available ....only if they comply.
Fact 2 - when Supermarkets lower 'home brand' prices, it is true that they can literally take losses on that line - by increasing margins on other products. This negates normal maket forces driven by supply and demand.
Fact 3 - processors (eg Parmalat, National Foods) have 2 options to maintain market share with their branded products (eg Pauls, Pura, Dairy Farmers)...
a) lower prices to compete
b) pay their suppliers (the dairy farmer) a lower % to reflect sales.
Either way, processor profits are made from the sale of branded products.
This loss of margin and or sales must be passed onto the dairy farmer for the processor to remain viable.
Fact 4 - Many dairy farms in NSW and QLD have recently or will soon face income reductions of 25% for their milk (while cost of production continues to rise sharply).
Coles and Woolworths are big businesses. They are highly motivated by profits and shareholders. This knowledge will come as no surprise to them. They are well aware that farm gate price will be cut (in many cases to below the cost of production)...just not by them directly.
The thing that astonishes me is that there is no longer the desire for the truth to be made available to the public. There is no expectation for the multi-nationals to be honest about the direct impact of their pricing actions on the future health of this great country's rural sector. The wider ramifications to the consuming public long term is an absolute loss of control over the quality of fresh produce available.
Currently Australia has amongst the most stringent quality standards globally. The farmers within our country go to great pains and expense to meet these standards, as they are not optional - and nor should they be. But once you relinquish control....well...you take what you get. We've already seen this in some areas like fruit and seafood, where imports may come from countries with much more relaxed production standards.
In the process of being forced to aquire an arguably inferior product in the future, 'our' multi-nationals have crippled another Australian industry - the Dairy Industry. Of course they will have you believe this was not their intention. The end result is truly all that matters.
So what is the end result?
1. Closure of local family operated businesses (expect to see a huge fallout of dairy farms over the next couple of years).
2. Lost employment opportunities at farm and manufacturing levels.
3. A small cost saving to the consumer (reflective of International Government subsidies, lower wages and cost of production available in other countries).
Most frustrating of all is that in our free democratic country, there is no longer any need to held accountable for our actions. The ACCC has become a toothless tiger. Millions are spent on Senate inquiries - yet Governments are seemingly only too happy to turn a blind eye to the demise of our rural sector in the name of corporate profits.
Ahhh....Australia!!
Great post Greg.
ReplyDeletexx
Thank you for sharing it from a farmers view but its still all over the top of my head.
ReplyDelete(((( Hugs )))) XXXX Kisses XXXX
Excellent post!
ReplyDeleteMost people have no idea.
The processors should refuse to supply generic brand milk. I can't see the supermarkets not shelving no milk. The processors should be refusing to play this game which adversely affects Australian farmers.
ReplyDeleteThank you for this - am going to spread it around as much social media as I can. Its good to actually have FACTS for a change. I still can't believe how poorly we treat our farmers.
ReplyDeleteHere in FNQ the deregulation of the dairy industry has torn the heart out of our local farming communities. The industry is shrinking and will soon become non-viable if its not at that point already and when large retailers get their way and we are importing all of our food, what security do we have left?
ReplyDeleteMakes me cross.
I've never bought supermarket branded milk, and travelled all over town to get the locally produced milk, but the last shop selling it has just stopped stocking it.
ReplyDeleteI'll be writing letters of complaint to all the supermarkets, but what else can we do, Greg? any suggestions? As consumers, we might have some clout if we can organise ourselves.
Thought-provoking to say the least. It raises so many questions. For me I wonder about our duty as citizens of local communities to support people in their work, be it dairy farmer, prawn farmer or corn farmer. Shouldn't it be our responsibility to provide job security for our local community, not just to save cash to 'spend on more things we don't need to impress people we don't like'. Or is this the way the world has to be?
ReplyDeleteIam a small farmer in the hunter valley and have visited many dairy farms, some of our dairy farmers live in near third world conditions due to the already low price per litre they receive what the big supermarkets are doing is a disgrace and we should all lodge a complaint with the ACCC
ReplyDeleteThis is so sad but so true and not only in Australia. The family farm that was lovingly passed down from generation to generation with loyalty and sacrifice is regulated out of possible survival.
ReplyDelete