Tag Archives: Supermarket duopoly

Corporate control of food, Supermarket Duopoly

Trying to tackle abuses of market power with social media

#TellUsWhy

A version of this article first appeared in the Coffs Coast Advocate on Saturday 26th October, 2013

On Wednesday this week, the Victorian Farmers Federation launched a social media campaign with the hashtag, #TellUsWhy.

The targets of the campaign are Coles, Woolworths and Aldi, and the aim is to mobilise shoppers’ collective power, via Facebook and twitter, to pressure these mega-supermarkets to use Australian-grown produce in their homebrand product lines.

“We’re asking consumers – next time you’re in [one of those supermarkets] – check the fine print on the food you’re about to buy. If it’s an import take an image on your phone, then send it with the #telluswhyColes or #telluswhyAldi hashtag and your comments to the VFF – as a tweet to @VicFarmers or post it on the VFF’s Facebook page”, said VFF social media guru Tom Whitty, in the press release.

There’s a growing public awareness of the impact that cheap imported fruit (fresh and processed) is having on our growers and food manufacturers. Also this week the CEO of SPC Ardmona, Peter Kelly, issued an urgent plea to the new Coalition government for $25 million in funding, saying that without the money the company will be forced to close its Shepparton plant. The consequences of such a decision would be grim: 1000 workers redundant, the contracts of hundreds of local growers terminated, thousands of hectares of fruit trees ripped out ‘and a regional economy would be destroyed’, in the words of local Liberal MP Sharman Stone.

So the VFF is to be commended for its campaign, and apparently the building pressure has already had some impact, with Woolworths ‘committing to using Australian-grown frozen vegetables in its Select brand, and replacing $9 mn of imported tinned fruit with Goulburn Valley growers’ fruit”, according to VFF president Peter Tuohey.

Gary Gardiner
Gary Gardiner

But there are deeper dynamics at work which are placing inexorable downwards pressure on Australian growers and food manufacturers. One is the free trade agenda, which as I wrote last time is being ramped up several notches with the Trans Pacific Partnership deal.

And the other is the familiar story: the excessive market power of the big Australian supermarkets and the impacts of that power on farmers, workers and communities. The VFF campaign might persuade the supermarkets to buy more Australian produce, but what price will the growers and suppliers be getting?

This brings me back to Gary Gardiner, fourth-generation local farmer and now proprietor of Paradise Fruits in Sawtell, whom I first wrote about last month. With his intimate knowledge of the wholesale market system in Australia, Gary explained to me exactly how the supermarkets use their buying power to maximise their gains at the expense of growers:

“Coles and Woolies don’t just control 80% of the grocery market, they control the the market system as well. They’ll walk into a wholesale market and they basically control what’s going on. Let’s look at bananas in the Sydney market. There’s probably four main wholesale agents. With potatoes, there’s maybe two-three. So Coles and Woolies come in, they look at a product and say, right-o, that’s selling for $15 a carton. So they say to the agent, we’ll take all your production for $12, everything in your coolroom.”

“So that’s fine, they get a $3 discount. The agent’s going to say yes, because he’s on a fixed percentage. There’s no impact on him, it’s an easy sale. It’s the poor old grower who cops the hit”, Gary said.

“We’ve had so many stories. Let’s say there was a shortage of butternut pumpkin on the market. Let’s say it’s $1 a kilo. The [duopoly] will go in there and offer 70 cents a kilo, and take everything on the market. There’s usually one or two smaller growers there, holding out, and the price will automatically go to $1.50 a kilo, because there’s nothing on the market for anyone else to buy. Mysteriously, a percentage of the Coles and Woolies product will reappear for $1.50. Without even leaving the market, so they make a 100% mark-up on that product.”

Tell us Why? Indeed. To be continued.

Coffs Coast, Corporate control of food, Cost-price squeeze, Fruit growing, Local and regional food economies, Retailers, Small-scale farming, Supermarket Duopoly

A long road to Paradise


In August last year Master Grocers Australia (MGA), a national employer organisation which represents independent grocery supermarkets and liquor retailers in Australia, released its ‘Let’s Have Fair Competition!’ report, calling for regulatory reform to redress alleged abuse of market power and anti-competitive practices that MGA claimed Australia’s supermarket duopoly – Coles and Woolworths – were engaging in.

The Executive Summary of that August 2012 report claims that the duopoly, through tactics such as ‘price discrimination, shopper docket schemes, store saturation and over-sized store strategies [building huge supermarkets in small local markets in order to drive out existing competition and prevent new market entrants]’, is ‘crowding out all competition [and] rapidly reducing the choices in shopping format, brands, locally-derived products and service levels’.

Faced with inaction on the part of policymakers, the MGA released in August this year a follow-up report, ‘Finding a Solution’, which makes a number of specific proposals for reforms to the Competition and Consumer Act to achieve the MGA’s goal of a fairer grocery retail market in Australia.

These are issues that Gary Gardiner, co-proprietor of Paradise Fruits, a small fruit, veg and grocery shop in Sawtell, is all too familiar with.

DSC_0127

 

Gary’s family has been living and farming on small acreages in the Boambee / Coffs Harbour region since about 1890, first in middle Boambee, then to Stadium Drive, and finally on Sawtell Road.

“The original farm was developed as a diverse farm, with dairy and small cropping. In the early 1900s my family did a run to Bellingen and Nambucca to supply the local shops and markets”, Gary told me.

A century ago, family farming on a small property in this region offered a viable livelihood.

“In the older days, 10 acres was about what one family could manage on their own. Any bigger than that, you needed multiple families and / or outside workers”, Gary said.

“Most farmers grew a commercial crop – usually bananas – supplemented with other, smaller, cash crops, like tomatoes, cucumbers or zucchinis. The income from the smaller crops was what they lived on, and what they produced commercially just about covered the costs of running the farm itself”, Gary said.

There was also a strong ethic of self-sufficiency. “Back in those days, most of the food the family ate was produced on the farm as well. That was certainly true during the Depression era – and even we still did that up to the 1970s”, Gary added.

Gary Gardiner
Gary Gardiner

As the food supply chain in Australia became steadily more centralised over the decades, the viability of the small-scale, diversified family farming model was increasingly threatened, as Gary explained:

“About 24 years ago, we were still growing bananas and small crops, and around that time we set up ripening rooms so we could supply the two Coffs Harbour independent supermarkets, Cox’s, and Tucker Bag. But they could only take 10% of our production. But the profit we got from that 10% equalled the returns we got from the other 90% going through the mainstream marketing system.”

“That’s how much we were all getting ripped off”, Gary remembers. “So we [aimed to] take out the middle men. And when you do that, you have a chance of actually making a living [as a grower].”

“It’s basically the difference between being a price-maker and a price-taker. If you were selling to the [central] markets, new cartons had to be used, so you had to buy those – $1.50 each. Freight – $1 per carton to get the product to market. Agent’s commission – $3 a carton back then. We were only getting $10 a carton.”

“And during the summer, when there was a glut, we got nothing back at all. You’d be doing all of that work, carrying all those costs, and you’d actually be paying to send your product to market, and you’d get nothing for it.”

Cox’s and Tucker Bag closed their doors not long after Woolworths opened, in the late 1980s. We’ll hear Gary’s thoughts on the impacts of the supermarket duopoly next time.

advocate, Corporate control of food, Fair Food Week, Food policy, Local and regional food economies, Supermarket Duopoly

Fair Food Week arrives in Australia

Australia’s first Fair Food Week

A version of this article first appeared in the Coffs Coast Advocate on Saturday 17th August, 2013

On the 1st August this year I attended Australia’s first Symposium on Supermarket Power. Jointly organised by the law schools of Monash and Melbourne University, the aim of this event was to explore the extent of supermarket power in Australia’s economy and society, the impacts of that power, and what if anything could be done about it.

It was a fascinating event in many ways. We heard from a financial analyst documenting the extraordinary sales growth and profit performance of Woolworths and Coles over the past decade, along with some cautionary words expecting both indicators to moderate somewhat in the current decade because of the entry of Aldi and CostCo into the Australian market.

We heard about the new supermarket adjudicator appointed under the UK’s mandatory supermarket code of conduct, and how she intended to exercise her powers, including by the imposition of ‘punitive fines’ based on a percentage of turnover in the event of repeated abuses of market power down the supply chain by the supermarket majors.

Tasmanian senator Peter Whish-Wilson announced that the Greens want to extend divestiture powers to the Australian Competition and Consumer Commission, and to impose an immediate moratorium on the opening of any new stores by the duopoly. We also heard from Robert Hadler, General Manager of Corporate Affairs at Coles, who welcomed the discussion and acknowledged that Coles (and, by implication, Woolworths) needed to do more to justify their ‘social license’ to operate.

I was invited to attend to speak about the challenges facing our food system and the emerging ‘fair food’ movement. I had the audience smiling when I put up a slide with that ubiquitous social media question, ‘WTF?’

WTF image

‘What does he mean?’, I’m sure they wondered. Then I showed the short film, Orange Tree Blues, which tells the moving story of Riverina citrus grower Mick Audinno finding himself forced to rip out hectares of healthy orange trees because he had lost his markets as a result of cheaper imported juice concentrate.

And then my next slide revealed two new meanings of WTF:

This is a question, I told the audience, that every Australian should be asking themselves. Because we are losing farmers at a truly alarming rate – an average of 76 per week from 2006-2011, expected to rise to 130 per week during the current decade.

A gentleman from the Victorian State government, himself a farmer, came up to me afterwards and told me I was being ‘mischievous’ with these figures (which, by the way, come from the Australian Bureau of Statistics and KPMG). His point being that it doesn’t matter if we lose eight ‘inefficient’ farmers, if we can replace them with one who is much more ‘productive’ and ‘efficient’.

WTF image 2

But this rather misses the point. In our singular and relentless focus on productivity and efficiencies, we lose sight of so much else, the value of which cannot be simplistically reduced to monetary calculations. This is what scholar John McMmurtry terms ‘the life-blind structure of the neoclassical paradigm’: the exclusion as a matter of definition of considerations such as human health and well-being, and eco-system integrity, that are actually fundamental to our continued survival as a species, let alone our civilisation in its current form.

In an effort to foreground a national conversation on food and agriculture that begins from the question, ‘What values do we as Australians want to underlie our food system?’, the Australian Food Sovereignty Alliance (AFSA) is facilitating the country’s first-ever Fair Food Week, from 19-25 August.

ffw-2013-logo

 

What we call ‘fair food’ is food that is produced in ways that are fair to all and that guarantee economic and nutritional health to everyone in Australia’s food value chain – Australian farmers, Australian food processors, small to medium size food retailers and we who eat the products of these producers and enterprises.

 

Already over 90 events have been organised around the country, including forums, workshops, film screenings, farm dinners, garden tours food swaps and much more. We have been humbled by the response Fair Food Week has received. It speaks to the emergence of a fair food movement in Australia that is rapidly growing in confidence and capacity.

advocate, Corporate control of food, Farmers Markets, Food policy, Local and regional food economies, National Food Plan, Small-scale farming, Supermarket Duopoly

Local Food, Local Farms

Local food and the 2013 Federal Election

A version of this article first appeared in the Coffs Coast Advocate on Saturday, 3rd August, 2013

As the 2013 Federal election draws closer, policy announcements are starting to come thick and fast.

The Government has already set out its stall on food and agriculture, in the shape of the National Food Plan. The ‘big idea’ is that Australia will become the ‘food bowl’ of Asia, with a 45% increase in exports and a 30% in agricultural productivity by 2025.

The Coalition likewise wants a big increase in exports and foresees a ‘dining boom’ to replace the ‘mining boom’. The distinguishing feature from the Government’s plan is the emphasis on Northern Australia, with the damming of rivers and the clearing of land seen as the key to opening up the untapped resources of the northern frontier.

Meanwhile Bob Katter’s Australia Party has taken an entirely different tack, focusing on what he sees as the largely negative role played by Australia’s supermarket duopoly in terms of the viability of our farmers. He has accordingly introduced a Bill to Reduce Supermarket Dominance, which among other things makes it an offence, punishable by a $50 million fine, for any supermarket operator to retain a market share greater than 20% withinsix years after the passage of the legislation.

That $50 million fine contrasts with the $61,200 fine imposed on Coles after it was found to have engaged in misleading conduct, by selling as ‘baked today, sold today’ bread that had actually been made weeks ago in Ireland.

Katter’s initiative, which was supported by Nick Xenophon, has been branded by the industry as ‘radical’ and ‘extreme’. Forcibly breaking up companies is indeed radical, although there are plenty of historical precedents for such actions. I can’t speak for Bob Katter, but I imagine he might say that a situation in which two companies control in excess of 70% of the grocery market is itself ‘radical and extreme’.

On this issue, the Government and the Coalition effectively adopt a ‘do nothing’ approach. The Greens, on the other hand, propose that the Australian Competition and Consumer Commission be given divestiture powers, although they propose nothing as directly forthright as Katter.

Local Food Local Farms
Local Food Local Farms

What the Greens have announced in the past week is the establishment of an $85 million grants program to support various forms of direct marketing of produce by farmers and growers, including farmers’ markets, regional food hubs, and community-supported agriculture vegie-box schemes.

This proposal draws directly on the experience of the ‘Know Your Farmer, Know Your Food’ program operated for some years by the US Department of Agriculture. Partly as a result of such initiatives, the numbers of farmers’ markets in the US have more than doubled in the past decade, from 2900 in 2001 to 7000 in 2010. And the numbers of farms selling some or all of their produce through local markets rose to 136,000 in 2012, a 24% increase from 2012.

The $85 million in grants for direct marketing compares favourably with the $1.5 million grudgingly offered by the Government in the National Food Plan to support community food initiatives such as farmers’ markets and community gardens. That $1.5 million came with many strings attached, including a dollar-for-dollar matched funding requirement. I know of many groups that would have liked to apply but were put off by such conditions.

Many people in rural and regional Australia will be sceptical that the Greens are or ever could be the friends of farmers. That said, direct marketing and local food is growing at 5% -10% per annum in North America, with solid and bi-partisan political support at both state and federal levels, and with clear benefits to farmers. Indeed, net farmer numbers in the US recently increased for the first time in decades, with many new entrants being considerably younger than the average age of 58. Clearly something is going on here.

advocate, Corporate control of food, Supermarket Duopoly

Two supermarkets, no farmers

A country with two supermarkets, but no farmers

A version of this article was first published in the Coffs Coast Advocate on Saturday, 9th March 2013.

In my last column I quoted ‘Farmer Bluey’, who runs a mixed farm producing not insignificant quantities of wool, wheat, oats and lamb. He is joining ‘all his friends’ and abandonding farming this year.

This week I’m going to introduce you to Oxley Island dairy farmer Jane Burney (now Jane Polson), who has a herd of 300 Stud Holsteins. Last July Jane became so outraged at the consequences to her industry of the $1 a litre milk price war between the supermarkets, that she fired off an angry post to the Facebook page of Coles. Here’s part of what it says:

The consumer is paying $1 a litre and the only winner here is the supermarket…Obviously it is cheaper to buy [produce] from overseas than from our country, grown in God knows what…Your latest ad campaign sprouting that you support Aussie growers is insulting…Eventually all the growers you so-called support will be out of business…The consumer will be stuck buying expensive, overseas produce…I am ashamed to watch your ads and us farmers burn in resentment when we do.

Now if you’re not a farmer, you may think Jane is exaggerating. But a couple of months ago the Australian Bureau of Statistics (ABS) released a Social Trends report on ‘Australian farming and farmers.’ Part of what it discusses are the changing demographics of farmers, as seen in this chart:

While the average age of the Australian farmer is now 53 (or 56, depending on which report you read), nearly a quarter of all farmers are over 65, compared to only 3% of the total workforce. We have thousands of farmers who are working past 75, and even past 85. Whatever happened to the principle of a dignified retirement and enjoyment of leisure at the end of a long working life?

The percentage of working farmers over 55 has risen from 26% of the total in 1981, to 47% in 2011. Just as worrying, the proportion of farmers under 35 has more than halved, from 28% of the total in 1981 to just 13% today.

My brother, a Federal public servant, retired  a couple of years ago at 55, and is now a man of nearly total leisure. I know he worked hard (though he wasn’t averse to the odd long Friday lunch!) – but was his work so much more valuable and important that he’s entitled to a relaxed and secure middle and old age, while such a prospect for many of our farmers, if it comes at all, will only be through a payout from a developer or mining company? Which of course raises a whole host of other questions about long term food security.

Farming generally has become so devalued that rates of suicide amongst farmers are nearly two and a half times the average for the workforce as a whole. Is it any wonder, then, that large numbers are joining Farmer Bluey and voting with their feet? In fact, according to a 2012 study carried out by accountants KPMG, no fewer than half of Australia’s farmers expect to leave farming in the next decade.

Meanwhile, delegates at this week’s ABARES ‘Future of Food and Farming’ conference were saying things like, ‘Australian agriculture has to become more globally competitive – we can’t afford a $7 minimum wage.’ So it’s not enough that we treat our farmers like dirt, we must create near slave-like conditions for agricultural workers in order to reach those holy grails of ‘increased productivity’ and ‘greater global competitiveness’.

Oxley Island Dairy Farmer Jane Burney (from the Australian)

It’s no coincidence that all this is happening as Coles’ and Woolworths’ share of the grocery market has doubled since the mid-1970s. I’ll leave the last words to Jane Burney, who ends with a brilliant piece of modern-day bone-pointing:

 

There is a growing backlash against your behaviour. Your suppliers and the community (your customers) are on to you. This dissatisfaction will grow to the point where the milk supply will be removed from you and placed back in the hands of cooperatives made up of dairy farmers, community reps and government. This is as is should be, as you have shown yourselves to be lacking in the vision, integrity and commercial strategic thinking required to be entrusted with such an important role re: key parts of our food supply and economy. History will look back on your behaviour over the last 10 years and say this was when the major supermarkets over-extended themselves, dodged their community obligations and ultimately destroyed their brands and shareholder value…Down, down? The only thing going down long term will be the Coles brand and its share price.

Jane’s post, by the way, has so far been ‘liked’ close to 77,000 times and generated nearly 5000 comments.

You can read the original post here: https://www.facebook.com/coles/posts/391593540904667

And here is the extended version: http://www.holsteinworld.com/story.php?id=6897

advocate, Corporate control of food, Food policy, Supermarket Duopoly

Cheap food = A country without farmers

Sugar, Rice and supermarket power

A version of this article first appeared in the Coffs Coast Advocate on Saturday 23rd February, 2013.

A big fortnight for food news.

We saw the release of new national dietary guidelines, which basically reaffirmed good, solid, grandma’s advice: eat a variety of healthy foods, above all your five veg and two fruits, go easy on sugary and fatty foods, and keep physically active.

The major change was the official recommendation, for the first time, that Australians ‘limit’ our intake of sugar, especially in soft drinks. Despite the Guidelines Working Committee basing their recommendations on no fewer than 55,000 pieces of peer-reviewed evidence, the Australian Food and Grocery Council (AFGC), which represents the likes of Coca Cola Amatil, weren’t happy at all about the advice to limit sugar intake. ‘The jury is still out’ on whether added sugar is part of a healthy diet, according  to them.

This reminds me of how the tobacco companies used to say ‘the jury was still out’ on whether there was a link between smoking and lung cancer, in order to resist and delay health warnings on cigarette packages.

Meanwhile, the burden of obesity on our public health system is getting ever larger. In the UK, which faces exactly the same issue, the Academy of Medical Royal Colleges has put out a demand for a 20% tax on fizzy drinks, a strict limit on fast food outlets near schools and other places where children and youth gather, the removal of junk food vending machines from hospitals, and a prohibition on junk food ads before 9.00 p.m.

I can just see the AFGC spokesperons going purple in the face if anything similar was ever proposed in Australia. Which it will be, as we get sicker and sicker, and finally realise why.

Then there was exciting news from India’s poorest state, Bihar (pop 100 million, and 50% of families in poverty), where the application of what’s called the System of Rice / Root Intensification (SRI) has ‘dramatically increased yields with wheat, potatoes, sugar cane, yams, tomatoes, garlic, aubergine and many other crops’, according to the Guardian newspaper. World-record rice yields of 22.4 tonnes per hectare have been achieved – with no GMOs, and no herbicides.

A fact sheet from Sunrice boasts that ‘Australian rice yields of 10 tonnes per hectare are the highest I the world’. Not any more they aren’t!

In the case of rice, SRI means planting out fewer, and younger, seedlings, in drier soil, and with regular weeding to aerate the roots. An advocate of SRI, professor Norman Uphoff of Cornell University, says that the agricultural shift of the 21st century has to involve moving away from the obsession with genetics and using chemical fertilisers, to better crop management practices: ‘We have tried to make agriculture an industrial enterprise and have forgotten its biological roots.”

Meanwhile, new reports in the United States showed that two million acres of native grasslands have been converted to corn and soy monocultures in the past five years alone, driven in part by government subsidies and targets for the ethanol industry.

Finally came the news that Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), will investigate Coles and Woolworths for alleged ‘unconscionable conduct’ in the form of bullying tactics against food and grocery suppliers over prices and supply contracts.

We’ve been here before, in 2008. Professor Christine Parker, an expert in competition law from Monash University, says that this current investigation ‘only treats the symptoms and diverts attention away from the real cause of the problem: supermarket power’; and that because of the way the legal provisions are worded, it will be very hard for the ACCC to win any case against the supermarkets.

Coles Farmer Pain

In her view, the ‘tragedy of the Coles-Woolworths duopoly is the narrow, greedy, profit-oriented way in which they control and manipulate the relationship between all of us who eat food and those who produce it…Squeezing producers on prices is supposedly part of [the equation of delivering cheap food to consumers.’

In a piece on the ABC Drum site (18 February), farmer Sophie Love urged consumers to send a signal to the supermarkets and push for fair milk prices. She was met with a torrent of anti-farmer sentiment. But then there was farmer ‘Bluey’, who had this to say:

“Let’s look at a mixed farm. Last year I produced 5000kg of fine wool, 600t of good protein wheat, 80t of quality oats and 8000kg of lamb. Income was $183,000. Costs (fuel, fertiliser, freight, rams, shearing, rates, parts, tax, electricity, labour, interest, etc) $175,000.

We’re already broke and it isn’t even the end of February. We’re getting out this year, all our friends have already left. We can’t compete with mining wages, we can’t (and wouldn’t) strike and nobody gives a stuff.”

At the end of the day the real cost of cheap food will be a country without farmers. Is that what we really want?

advocate, Corporate control of food, Cost-price squeeze, Food policy, Global hunger, National Food Plan, Supermarket Duopoly

A food plan for corporate agribusiness

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A National Food Plan, but not for us

A version of this article first appeared in the Coffs Coast Advocate on Saturday 20th July, 2012

On 17th July, the Federal Government released its green paper for a National Food Plan. This is the next step in the development of Australia’s first-ever national food policy. The first was the release, in June 2011, of an Issues Paper, followed by a two-month period of consultation and invite-only roundtable discussions. The green paper will also be followed by a two-month period of public consultation, and I’ll provide the relevant link at the end of the article.

During the first phase of public consultation, 279 written submissions were received from Australians, many of them from ordinary members of the public, and from community groups and small farmers. One of them was Graham Brookman, CEO of a permaculture farm (foodforest.com.au) in Hillier, SA, which produces 160 varieties of fruits, nuts and vegetables.

DAFF

The Food Forest is a family farm, run by Graham, his wife Annemarie, and their two children. The family’s aim is to ‘ demonstrate how an ordinary family, with a typical Australian income, can grow its own food and create a productive and diverse landscape’.

Graham took the trouble to write 13 pages in his submission to the National Food Plan consultation. He pointed out that ‘the dogma that internatioanl free trade will solve food insecurity has been proven to be faulty over centuries, billions continue to starve while others die of obesity in a world with relatively free movement of food’.

This would seem to be a simple statement of facts. Close to half the world’s population is malnourished in one form or another, either because they have inadequate intake of key micronutrients, or excessive intake of the wrong types of (highly processed) foods. Free trade, vigorously pursued by Australia and many other countries for the past few decades, has not resolved these issues; indeed there is a good argument that it has made them worse.

But in the green paper, the Federal Government has shown, to quote a(n) (in)famous lady, that ‘it’s not for turning’ when it comes to free trade. On the contrary, it’s full steam ahead on the trade liberalisation agenda, and we can expect increasing amounts of food imports. The Government wants your opinion on free trade – but only for suggestions on how Australia can export more, not whether the free trade agenda itself might require further thought.

Then Graham pointed out that the impacts of climate change, peak oil and geopolitical instability mean that ‘the whole food system needs rethinking and massive effort needs to go into rebuilding the skills of our agricultural producers such that the nation can remain domestically food-secure’.  To the free trade dogma, Graham adds the ‘free market dogma [which] has given Australia the duopoly of Woolworths and Coles who have driven farmers from the land by reducing profit margins for producers to miniscule levels and requiring them to use every technical device available to maximise yields.’ Broccoli crops in the Adelaide Hills, he points out, are ‘sprayed with biocides approximately 30 times to meet the cosmetic standards of the supermarkets.’

But Graham and the Government are inhabiting parallel universes, it seems. According to the green paper, Australia ‘has a strong, safe and stable food system’ and ‘Australians enjoy high levels of food security’; our food industry is ‘resilient and flexible’ and we ‘have one of the best food systems in the world’. A key plank of our national food strategy should be about us becoming ‘the food bowl of Asia’, in the Prime Minister’s words. This is a frankly preposterous example of wishful thinking, given that even on the most optimistic scenarios, Australia would supply food for no more than 1% of Asia’s 3.5 billion people.

So it’s no surprise that Graham, on reading the green paper, wrote to tell me that, ‘in terms of a sustainable food future for Australia there is virtually nothing in the ‘national food plan’ or its structure that is acceptable’.

There’s a simple reason for this: the ‘National Food Plan’ is actually a Plan for corporate agri-business and retailers, not ordinary people. If we want a food plan that meets our needs, we’ll have to work on it ourselves.

occupy_our_food_supply_new

If you want to read the green paper and tell the Government what you think about it, follow this link: http://www.daff.gov.au/nationalfoodplan/process-to-develop/green-paper.

Update: 8th November 2013

Following the election of the conservative Liberal-National Coalition, led by Tony Abbott, there is considerable doubt about the future of the National Food Plan. Apparently the new administration is not that happy with it, and the proposed Australian Council on Food has already been abandoned. This is not to suggest that we are likely to see a change of tack on free trade or any other aspects of the big corporate agenda. On the contrary, we are likely to see an intensification of that agenda, via the so-called ‘Northern Foodbowl Plan’, of which more in a later post.

 

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advocate, Corporate control of food, Cost-price squeeze, Demographic crisis, Ecological constraints, Food sovereignty, Growth paradigm, Local and regional food economies, Small-scale farming, Supermarket Duopoly

The poverty of farming in the Tweed

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The poverty of farming in the Tweed

A version of this article first appeared in the Coffs Coast Advocate, on 10th December 2011

Last time I introduced Tweed mango grower Mike Yarrow, whom I met recently while in Murwillumbah as part of a team working with the Tweed Council to prepare a strategy for sustainable agriculture.

Mike would like this process to be a success, but he believes that it’s ’30 or 40 years too late’, at least in the case of him and his wife; and other farmers of their vintage (Mike is 67), which is the vast majority of farmers in the region.

Your problem as I see it”, he told us, “is that we, the farmers, have reached the end of our working lives. There are no new young farmers.

The aging of the farming population is an issue that affects the country as a whole. By far the largest category of farmers in Australia is in the 65+ age bracket. In this as in other aspects of food policy, the Federal Government has made the complacent assumption that there is really nothing to worry about, and that what objectively appears to be a demographic crisis will simply correct itself over time. Projections issued after the Australia 2020 Summit in 2008 saw the age of the average Australian farmer peaking in 2011 at just under 55 years, and then gradually declining past 2030.

mangos

Yet no convincing explanation was given as to where the next generation of Australian farmers would come from. On the contrary, all the indications are that the decades-long trend of an aging rural workforce is likely to continue. According to Mike Yarrow, the heart of the issue lies in what he calls ‘the deliberately destroyed profitability’ of farmers.

In Mike’s view, successive Federal Governments wanted ‘to keep the lid on industrial unrest by keeping the gap between a worker’s income and the cost of living apart’. He recalls that when he and his wife arrived in Australia in 1974, petrol was 7 cents a litre, and the minimum wage was $1 an hour. Both have since risen about 20-fold, in line with general cost of living increases. A box of fruit, on the other hand, was $10 in 1974 – and hasn’t gone up much.

You could take issue with Mike; dismiss him as a conspiracy theorist; say that the Government has never intended to screw farmers; that it’s simply a case of the way the markets (and supermarkets) operate. But that’s exactly his point.

By de-regulating rural industries, opening Australia to cheaper imported produce, and generally ‘letting market forces rip’, the market has done what it always does. It’s a competitive system, and it produces winners and losers. In this case, the losers happen to be the majority of Australia’s farmers, and the big winners have been Australia’s two major supermarkets, whose market share has more than doubled since the mid-1970s.

You could argue that in delivering ‘cheap food’ for shoppers, the Australian public as a whole have also ‘won’ in this process.  Yet as five farmers continue to leave the land every day, and very few are stepping into their shoes, the question remains: who is going to produce our food for the rest of this century, and beyond? Agriculture may be less than 3% of Australia’s GDP, but to understand its significance only through an economist’s eyes is unbelievably naïve and short-sighted.

At a deeper level, Mike is quite right. The market system – capitalism – has always depended on ‘cheap food’, in one form or another, to drive its major cycles of expansion. In the Industrial Revolution, it was sugar from the slave plantations of the Caribbean. Last century, it was the mountains of corn made possible by hybrid seeds, agro-chemicals and cheap oil. This century they tell us agricultural productivity will be driven by ‘environmentally-benign’ GM technologies. Meanwhile, food prices are starting to rise, and food riots are becoming more common. Food is too important to take for granted, and so are farmers. We need to be asking some hard questions.

advocate, Corporate control of food, Democratic food systems, Fair Food systems, Food sovereignty, Global hunger, Local and regional food economies, Small-scale farming, Supermarket Duopoly, Uncategorized

Of thuggery and utopia

16th October – World Food Sovereignty Day

Nick Rose

This article first appeared in the Coffs Coast Advocate, 15.10.11

16 October is World Food Day. It commemorates the day in 1945 on which the Food and Agriculture Organisation (FAO) of the United Nations was established. The FAO is the pre-eminent global institution charged with working towards universal food security: its mandate is to ‘raise levels of nutrition, improve agricultural productivity, better the lives of rural populations and contribute to the growth of the world economy’.

This year, the theme of World Food Day is ‘food prices – from crisis to stability’. Food price volatility in recent years has seen the numbers of malnourished increase significantly. Commemorative events will be held around the world, such as the ‘World Food Day Sunday Dinners’ being held across the US.

Some social movements believe that such actions are no longer sufficient, and that a rather more dramatic change in direction is needed. So they are now commemorating 16 October in a different way, by renaming it, ‘World Food Sovereignty Day’.

Two months ago, 400 (mostly young) people from 34 European countries, met for a week in Krems, Austria, to talk about what was happening to Europe, their futures, and their food systems, in the context of the increasing application of austerity programs being dictated by financial markets.

Food Sovereignty Forum in Krems, Austria, 2011
Food Sovereignty Forum in Krems, Austria, 2011

Prefiguring the emergence of the Occupy Wall Street movement a month later and its focus on the unfairness and inequalities of what Dick Smith calls ‘extreme capitalism’, they denounced the ‘model of industrialised agriculture controlled by a few transnational food corporations together with a small group of huge retailers’. This model, they said, had little interest in producing ‘food which is healthy, affordable and benefits people’, but was rather focused ‘on the production of raw materials such as agrofuels, animal feeds [and] commodity plantations’.

In Australia, Dick Smith has recently been talking about the ‘thuggery’ practiced by major supermarket chains, and how this silences and intimidates processors and farmers. In other countries, such as Honduras, there is thuggery of a rather more extreme version. There, following a military coup in June 2009, dozens of farmer leaders have been assassinated by private and state security forces, as they have tried to resist being evicted from their lands by companies in charge of a rapidly expanding palm oil monoculture.

Such examples suggest that the dominant global agri-food model almost seems to have zombie-like characteristics. Unsustainable from every perspective other than corporate balance sheets, it still manages to spread its talons around the world, draining life from ecosystems, forests and rural communities. Its ‘export vocation’, as scholar and food sovereignty activist Peter Rosset puts it, is effectively a ‘model of death’, and contrasts sharply with the ‘food producing vocation’ of smaller-scale farmers.

So what do the young people who attended the European Forum for Food Sovereignty at Krems propose in its stead? In the first place, they demand the democratisation of food and agricultural systems, according to the principles of fundamental human rights, cooperation and solidarity.  Secondly, they want ‘resilient food production systems’, which utilise ecological production methods, and are based on ‘a multitude of smallholder farmers, gardeners and small-scale fishers who produce local food as the backbone of the food system’.

Thirdly, they are calling for decentralised food distribution networks and ‘diversified markets based on solidarity and fair prices’, with ‘intensified relations between producers and consumers in local food webs to counter the expansion and power of supermarkets’. They want dignified and decent working conditions and wages for all food sector workers.

Next, they oppose ‘the commodification, financialisation and patenting of our commons’, including land, seeds, livestock breeds, trees, water and the atmosphere. And finally, they are calling for public policies to support such food systems and food cultures, based firmly on the universal right to food and the satisfaction of basic human needs.

Is all this hopeless utopia, or grounded realism? Increasingly, the growing global food movements are providing the answer to that question.

advocate, Food policy, National Sustainable Food Summit

Conversations for transformation?

4 Comments

The National Sustainable Food Summit

Nick Rose

This article first appeared in the Coffs Coast Advocate, 16.4.11

On 5th and 6th April, I joined 320 others at the Etihad Stadium in Melbourne’s Docklands for the very first National Sustainable Food Summit. The Summit, presented by event organisers 3 Pillars, and sponsored by the likes of the Meat & Livestock Association, the Australian Food and Grocery Council, and the National Farmers Federation, was remarkable in several respects.

First, it managed to bring together, in the same room and quite often around the same discussion table, representatives of the biggest corporations in food and agribusiness (e.g. Coles and Woolworths); state, federal and local government officers; individual farmers; scientists and academics; and members of the growing community food sector. Every state and territory was represented. This was in itself a major achievement, which would have been inconceivable only a few years ago.

Secondly, the messages delivered by all keynote speakers were uncompromising in their honest presentation of the reality that if Australia wants to have a secure food supply – and above all one based on a healthy diet, produced in ways that restore rather than further degrade soil, water tables and ecosystems – then business as usual is simply not an option. More than that, it is quite simply not going to be possible to continue to produce current volumes of major agricultural commodities.

This seems counter-intuitive, given that Australia exports 60% of our agricultural produce. Yet, as speaker after speaker reiterated, there are several key limiting factors which will constrain the viability of large-scale monocultures in particular. They include: high levels of degraded soils; reductions in irrigation quotas to restore the health of the Murray-Darling system; the re-forestation of some agricultural land to meet emissions reductions targets; the impacts of peak oil, such as the diversion of food crops into feed-stock for biofuels; and the price and crop yield implications of peak phosphorous, given Australia’s dependence on imported fertilisers.

Add to this the pressures of the cost-price squeeze to which Australian farmers have been subjected for decades, and it’s not hard to picture the doom and gloom message promoted by science writer Julian Cribb, who was talking to his latest book, The Coming Famine: The Global Food Crisis and What We Can Do to Avoid It.

Thirdly, the solutions presented were also far-reaching and quite radical in their implications. A number of speakers questioned the knee-jerk response which always looks to greater volumes of production as the answer to any food-related issue.

Rather, as Professor Richard Hames said, we should be looking to produce more of the right foods, in the right places, by the right people. In other words, less subsidised over-production of corn in the US, and more food crops grown by small farmers in the developing world. This applies also to Australia, where most of us consume an inadequate amount of fruit and vegetables for a healthy diet, and where we import a growing percentage of these fresh foods.

The need to progressively eliminate the tremendous waste in the food system, to invest much more heavily in agricultural R & D, and to move away from a pervasive culture of cheap food that devalues farmers and the work they do, also featured prominently in the ‘to do’ list. Myself and many others were pleased to see that food localisation was widely seen as an obvious and necessary pathway forward, with strategic land use planning – urban and peri-urban agriculture, community gardens, edible streetscapes and so on – identified as an urgent priority for all local and state governments in the coming years.

Yet in spite of so many positives, there was a noticeable lack of political realism that pervaded the Summit. Yes, the challenges are immense; yes, change is unavoidable. But nobody wanted to ask the hard questions: how do we confront the entrenched economic interests that profit so handsomely from the status quo? How do we regulate food and farming markets so that they deliver the outcomes of human well-being, ecosystem health and farmer viability as first priorities, rather than shareholder value?

Maybe it’s enough for now that the conversation has started. But if history teaches anything, it’s this: necessary change doesn’t happen just because a group of well-intentioned people say that it should.