"Leaving aside the tax aspect, every aspect of a supermarket's supply chain is optimized to the nth degree."

Pericles, you are of course correct,from an individual business
point of view. Efficient supply chains within a given system, are
the way to go as a win-win for all. My statement was meant more in
terms of our overall situation beyond business.

If I compare business now and 20 years ago, alot has changed.
Business has strived to become more and more efficient. OTOH
Govt has loaded it with more and more paperwork, more and more
red tape of all sorts. More rules and regulations to comply with,
in the end it all costs and somebody has to pay. That has surely
made Australia a more expensive place to do anything involving
high labour content. So that is not where our comparative advantage
can lie, it has to be in other places.

If I look at my shire, my hospital etc, all seem to be spending
much more on administration and all just pass their costs on.
Even Woolies and Coles can pass on these costs, as they both pay
them. Exporters on the other hand, compete with countries which
don't have these costs, so have to swallow them, try to become
even more efficient, or close down. Payroll tax is a typical
expample of what I mean.

Rogo, I think there are quite large differences between WA farming
and farming in the East. You have a larger domestic market. You
also have a more efficient value adding sector, then over here.
Thats why for instance WA farmers have to accept significantly lower
livestock prices overall, then you do.

WA farmers have had to be more focussed on export markets and achieve
productivity gains through volumes of scale, to survive.

Yet another hater of the rural sector and country folk. Hey, maybe we should pursue Keating politics where all farms are stolen by the banks then sold off to multinationals who then close down the farms so produce must be imported. This leading to less jobs, less money remaining in the nation.

The CWA, while it is shrinking from existence, Australia will lose a lot when they have gone for they do a lot of genuine community work.

So what if it's public stunt by Woollies? Are you opposed to the stunts pulled by bands like U2, or is this different?

Volition, I dont have a problem with the concept that making money in itself is not a bad thing. I am more concerned with HOW the money is made. Various posters have talked of allowing market forces to work. The problem is that for market forces to be setting a true and fair price for any item, there needs to be several buyers and several sellers. This ensures true competition. This is where the farmer suffers, as he (she) is just one supplier in a pool of thousands, against basically 2 buyers. Those two buyers therefore have unfair leverage over setting the price, and boy does it show. To further compound the problem, on their retailing front, there are basically 2 suppliers and many purchases, again meaning that they have relative power over setting the price. The forces of market economics just doesnt stand a chance in this environment, and both farmers and consumers are the losers.

To make matters worse for farmers, where they have to compete with imports they are rarely operating on a level playing field. Just as we should be seeking to avoid products made in sweatshops, so should we be avoiding produce from third world countries that have to produce on starvation rations often with dangerous work practices, both for their workers and the environment. If we ARE going to import these foods, we should be requiring that our corporates pay a price for them that reflects the need to consider the welfare of people and of the environment. Yes we would probably pay more for food as a result - I say a study about 12 months ago that showed that we have some of the cheapest food of the western world.

Country Gal, I have some issues with your post:
1. What is a 'fair' price? Can you tell me any kind of objective standard that could be determined? No, because none exist that would be 'fair' to everyone. All we have is the price that the market sets. If the price in the market is not enough for the farmer to live on, then obviously they're in the wrong industry. There is no obligation to offer them more than what they wish to offer, because that would be forcing them to give up private property.
2. "true competition" - The number of people in a market does not determine its 'trueness'. As competition happens, businesses struggle to be the best. There is no real end state, there may be many firms or just one. It is important to note here that there is no "guarantee to be number one", just the opportunity. There is no good reason for people to be complaining that "mum and dad" grocers can't compete against Woolworths/Coles and need protection, it just means that Woolies and Coles do it better. Ultimately, nobody is FORCING consumers to shop at Woolies/Coles, they choose to! Woolies and Coles are just efficient, which explains why there aren't that many other competitors. Even when Woolies and Coles drop their prices to undercut new competitors, this is still acceptable because they're cutting down on their own profit margins to do this, it's not like it doesn't hurt them at all.

Even with your sweatshops argument, those Nike places are actually a step in the right direction, because those people would otherwise have NO job, which is worse! You'd find that as time goes on, conditions would change in those countries as economic growth happens. This growth only happens if you follow your own rational self-interest(buy the goods you actually want, instead of boycotting 3rd world country goods). Us rich countries are keeping them poor with your thinking.

We have no hope of reining in the power of the big corporations as long as they are able to make covert political donations through the various foundations run by both Liberals and Labor - this is nothing less than legalised bribery, and unless decent minded independents gain the balance of power nothing will ever be done about it. We desperately need to amend our corporations law to include social responsibility in the mix, as they do in Germany for example.

I have taken to shopping at Aldi over Coles/Woolies because they seem a much more decent company - perhaps because they are family owned. What we are seeing at C/W is the result of their determination to increase profits by 5% pa come what may - and as our population is not increasing by that much, they do it by screwing the producers here or offshore.

Candide , swapping Aldi for the major supermarkets doesn't necessarily improve the farmer's lot, I'm afraid.

I came across the Aldi phenomenon when I was doing some retail-related work in Germany in the 1980s. Stories aplenty followed them around, some apocryphal, but all interesting.

The early business plan was i) occupy a small corner site in a poor part of town, ii) have a single "up and down" aisle, iii) limit the SKUs held to 499 (if the store manager wanted to stock a different item, he had to drop one of the existing products) and stack the merchandise in their boxes to avoid employing unnecessary bodies. The store had no phone - if the manager wanted to call head office, he did so from the nearest call box. Using his own coins.

All this kept overheads, and therefore prices, as low as possible.

As did their buying strategy.

I was told the tale of a small but ambitious sausage-maker (let's call him Herr Schmidt) who one year had managed to get his product onto Aldi's shelves. He was asked to discuss (with one of the founders, either Karl or Theo - the story is not specific about which it was) whether he wanted to continue the relationship for another year.

Unfortunately, he had had to cut his prices to the bone just to get them onto Aldi's shelves, so top of his list was to ask for a higher price.

Karl (or Theo) led the discussion by praising the product, and suggesting that he could possibly double the quantity the following year... but at a lower price.

Our supplier was in a pickle. He was excited by the prospect of doubling supply, but appalled at the idea of lowering the price. He needed to talk to his processing people, so promised to come back the following day to complete the negotiations.

As he reached the door, a voice came from behind him.

“Herr Schmidt, I think it only fair to tell you that the moment you touch that doorknob, I shall immediately ring your competitor.”