Just a small note of correction on the dairy industry. While there are several large multinationals in the industry Australia's largest milk processor is still a farmer-owned cooperative. Murray Goulburn Cooperative Limited processes over 30% of Australia's milk (sold through the Devondale retail brand, as processed dairy rather than liquid milk).

But I agree that concentration of power in a small number of very large companies is not a recipe for a resilient food system.

Thanks Michael. I wasn't too sure just where Murray Goulburn stood in all of this. Glad to hear they're still the largest. Thank you for the correction.

Everyone likes it if the prices of the things he wants to buy are lower and the things he wants to sell are higher.

If competition in business reduces the price of goods to the consumer, what's wrong with that? That's as it should be. You have always got the option of paying more than the asking price for potatoes, or buying them cheap and then sending money out to potato farmers. But you don't, do you?

The reason bigger businesses tend to predominate in markets is because their economies of scale mean they can offer goods cheaper per unit. It's why we prefer to shop at supermarkets than at corner stores like we used to. We've got better things to do with the money than pay inefficient businesses to run inefficiently. There's nothing evil or unfair about it. If we wanted to, we could pay more and preserve relatively inefficient businesses. We don't want to.

So far as the businesses get an advantage by lobbying government to rig things in their favour, that's bad and I'm against it.

But that's not an argument in favour of lobbying government to rig things in the favour of inefficient producers.

The McCain's and multinationals of the world are no freer to set prices than the farmers because they also are subject to the consumer's absolute sovereignty in deciding whether to buy and how much to pay. No-one's got a gun at his head forcing him to buy McCain's potato chips, so your argument doesn't hold water. The fact that multinationals may predominate is an effect of consumer choice, not a cause. They are big because so many people have *chosen* their service over the competition, because the consumers judge their own satisfaction to be better served by the ones they choose, obviously.

If a business reduces the price of goods with the idea of driving smaller businesses out, it has to keep its prices down for this to work, otherwise competition will fill the void. There is no evidence of any such strategy at work in reality.

Just ponder if China called in all money loaned and stopped exporting and then concentrated on its own internal environmental and other problems.

It then only exported goods to pay for those imported to meet its own needs.

As a dictatorship it could do it as as was done by Eisenhower stopping production of cars in WWII.

Where is our food security then.

Peter I agree with you that consumers wield significant power in the market, and thus I think consumer choices will play a critical role in the future evolution of our food system.

But I think it is naive and misleading to talk down the market power of very large semi-monopoly businesses. The processes of competition you describe work fine in a marketplace where many sellers of relatively equal size compete for customers. Our food processing and retail sector is not like that. The ACCC found in 2008 (http://www.accc.gov.au/content/index.phtml/itemId/838251) that Coles and Woolworths between them control 70% of the retail market in packaged groceries and 50% in fresh produce. The size of these businesses means they can easily afford to sell "loss-leaders" - goods sold below cost price as part of a wider marketing strategy. If they use loss-leaders to out-compete smaller businesses that can't afford to carry the losses then that is predatory pricing - not fair competition. Once you've starved out the competition there's nothing to stop you jacking up prices again.

The Senate Economics References Committee (http://www.aph.gov.au/Senate/committee/economics_ctte/dairy_industry_supermarket_2011/interim_report/index.htm) held an inquiry recently into allegations of predatory pricing by supermarkets in the fresh milk market and concluded that "a broader review of national competition policy is currently warranted."

how about we globalise the cost side of the farm sector in, line with the globalised income of the food producing sector.

that would mean much lower costs for the food producer, hence much more food produced at a lower price.

if you want to argue that Australian workers ( remember farmer's are workers to) deserve higher then world market wages, surly that is a cost against the govt , not a cost against the food producing sector on world market wages