When you look at fresh food prices over the past ten years or so, a pattern emerges whereby there are large vairiences in the prices we pay at the check out.

At present cabbages are as cheap as 69 cents, can be $7.00, apples 89 cents, can be $5.00, onions 99 cents, can be $3.00, carrots 39 cents, can be $3.00. Probably the only stand out exception is fish.

Now given that labour costs, delivery costs, packaging, advertising and compliance costs have all risen, how then can these industries remain viable going forward if the consumer will not pay a fair price, every time.

Many industries are about to be slugged with penalty rates with the new IR laws, fruit pickers as an example.

I see one of two things will happen.
1. Prices will increase and stay dear
2. Our growers will fail and we will import most of our goods, in which case we will all suffer.

As a meat retailer I have access to meats from all over the country. My wholesale prices vairy up to 40% at times, which is little comfort for the people growing our products, yet, the cost of getting a beast from the sale to the abb has gone from $4.00 to $15 in ten years. Like fruit, production and associated casts have all risen, so who is missing out.

At present the grower and the retailer are the only ones who's margins get cut. Is this fair?

One possible solution is to stop sending money overseas as aid and send our excess food instead. At least this way our retail prices could stay more consistent and our growers would be better off and perhaps rely less on hand outs in tough times.

What are your thoughts

Supermarkets have an increasing level of power in the food industry. Farmers have always been and will always be price takers. The only time that will change is when food gets scarce.

Many put the blame at Australia's domination of the grocery industry by the two biggest players Woolies and Coles which (at last reading) make up 80% of the market. There is no or little incentive to discount on this basis. This may change with the introduction of Aldi but it is a shame Aldi is foreign owned.

Food production could be sustainable if we put a tariff on food imports or ban imports of goods we don't need ie. those that can be easily grown in Australia.

The irony is that we are losing ground in the domestic market for food while we import food from overseas (that has to be decontaminated with toxic chemicals) and the prices are no cheaper. The OS markets we lose should we get out of 'free' trade would be amply made up within our own domestic market and countries like Japan where there is little arable land not put down to manufacturing will always be a big food market. Same goes for the Middle East for different reasons.

This is a highly manipulated market and much of the best quality food goes overseas - particularly meat.

We charge premium prices overseas, but then the price hikes are reflected in the substandard meat available to Australian consumers. Remember when lamb, mince and sausages were the cheap meats.

The real winners are not consumers or growers in this scenario - there are powerful interest groups nearly always at distribution level. There are huge spin-off implications when food production is taken out of our hands not only in relation to price but food security and safety.

While we wait for governments to get wiser, we can all get around it by growing our own organic food where possible or buying at locally grown food markets which are springing up all over the place. I pay more for the local fellow's organic grass-fed meat but it tastes so much better and hasn't been sitting in a grainlot for 60-100 days awaiting processing.

The smart nations are those who have not bought into the free trade myth.

in europe the farmers get paid to..not produce..[in zimbabwe they used to be an exporter of food..russia used to be the food bowl[ans soon will be yet again...the same is obvious when you drive throughout aussie...there is plenty of food...the only real problems are monopolists who seek to control supply..[to maximise price]..and those seeking to control seed supply...into gmo manipulated poisen

food is cheap...if it was more expensive..people would chose to grow their own..[and not waste money growing lush lawns,no human can eat

while on the point of meateaters being attacked for eating grass eaters...let the vego/greenies..[wanting to save the world eat the grass]...

and reduce their carbon footprint by breathing less..[and stop their compost heaps generating all that methane into the atmosphere]...its not all cow fart's..methane is a greehouse gas as well..its time you greenie carbon taxers realised your bountyfull poop stinks too

*The smart nations are those who have not bought into the free trade myth.*

So says Pelican, who as a consumer is the first to benefit from
free trade. Cheaper cars, clothes, electronics, various consumer
goods.

Yes we could introduce a tariff on all these things. The result
would be rocketing costs for these things, then Pelican posting
that workers need a payrise to cope with huge inflation!

Sorry Pelican, but Australia has been through all these litle
jokes before and it was a dismal failure.

Not if domestic competition remains free from interference, price fixing or collusion Yabby. The same risks we see in international trade and can be oversighted by appropriate agencies.

And free trade in food has not led to cheaper prices for consumers only larger slices of the pie for distributors.

As a consumer I won't buy certain goods on principle and will pay more for goods that have not been produced using what amounts to little more than slave labour. Neither do I want to buy food that has to undergo toxic spraying just to get onto our shelves.

rehctub "At present the grower and the retailer are the only ones who's margins get cut. Is this fair?"

Blame Hawke/Keating, they were the ones who let the Coles/Myer and Woolworth/Safeway mergers go through, which has left the retail sector with too many food and other products locked into a market suffering a distribution bottleneck controlled, with almost monopolistic authority, by the two large and market dominant retailer groups.

As to "is this fair" nothing will ever be "Fair" but the question should really be is this commerically "desireable" ?

and I believe it is not.

Just as the two airline agreement was unfair, state owned banks were unfair, government subsidy of selected auto manufacturers and all the other "playing-with-the-market" games, which take place when politicians and bureaucrats get their grubby fingers in to things are, invariably, "Unfair".

Col,
two small problems with your argument about Keating and Hawk....context. At the time there were other players who have since gone.
Secondly it is/was Liberal policy too or are you coming over to the dark side of socialism? ;-)

Pelican and others
Much of the problems is more the way we farm see the Ch2 program on alternative land care issues. Note also that while the program focused on one man's method that involved "weed" species one could reasonably adopt his processes but with native plant alternatives.
Then of course there is the system that encourages/allows 'big is best'(uber capitalism). There are alternative without going to the extreme which is Col's nightmare, socialism or Keynesian capitalism. Total regulation as in trade barriers aren't really feasible (pushing the geni back into the bottle) would have far reaching consequences.I firmly believe that returning capitalism to a tool rather than a philosophy (humanist capitalism) is the best option. :-)

*And free trade in food has not led to cheaper prices for consumers only larger slices of the pie for distributors.*

It certainly has Pelican and above all it has massively increased
choices. In my pantry I have guavas from South Africa, grapefruit
from Swaziland, mangoes from Thailand, cherries from the USA,
baby carrots and baby peas from Belgium. All cheaply priced, due
to competition and globalisation.

*Not if domestic competition remains free from interference, price fixing or collusion Yabby. The same risks we see in international trade and can be oversighted by appropriate agencies.*

Rubbish. The fact remains that we are a mere twenty million, we
simply cannot make a myriad of products efficiently, due to economies
of scale. Take that computer right in front of you. Its all
a numbers game, for the microprocessors, ram chips, lcd screens, etc,
each take a mega billion $ factory to produce them. To just pay
for that infrastructure, would soon send you as a consumer broke

Pelican,
I do not think it correct that our best meat is exported. Some lamb may be exported but nost of our meat exports is in mutton and manufacturing beef. In fact my butcher was importing extra vacume packed rumps and loins from NZ. May still be the case but rehctub would know. But I agree it is better to buy from local butcher.

Same with seafood, I just will not buy non Aussie seafood. Fresh fruit and veges we get from local markets on Sunday.

Yabby,
Shame on you for buying imported tinned fruit. We buy Aussie only, but is getting harder to find. Must take glasses as some made here with 'local and imported' contents. Looks like our Coles have stopped stocking Goulburn Valley tinned fruit, so another gone.

Farmers costs are rising all the time so how long it will remain viable I don't know. I can't find any Aussie made tinned ham now.

*Yabby,
Shame on you for buying imported tinned fruit.*

Err hang on there Banjo. I just sold some lambs last week
and the choice cuts are going to the USA. The cheaper
cuts to China or South Africa. Then I grew a bit of wheat last year,
which from here generally lands up in Indonesia, Malaysia,
or the Middle East. Just this morning we loaded out a
road train of oats, which are going to the racehorse trainers
in Hong Kong and Japan.

Are you suggesting that I should only believe in selling things
overseas, but not buying any? Sorry, but I am not that
selfish. People in South Africa, Thailand or Swaziland need to
work too and if they have efficient industries, why should I not
support them? Who produces canned quavas in Australia btw?

Global trade is a wonderful thing, for it benefits everyone.
Mind you, I will be the first to jump up and down, when backward
and archaic people in Australia, deny us the right to build
efficient industries in this country, due to their warped
ideologies. People like Grim etc, whom I am arguing with on
other threads, want to take us back 50 years. Sorry, the world
has moved on and changed.

Yabby,
I do not believe that there is any need for us to import food stuffs at all. If,as it appears, Coles stop buying Goulburn Valley brand tinned fruit, then I feel sorry for the farmers around and the people in Sheperton, Vic. I have seen orange trees dozed and now our oranges and juice is imported.

What is now going to happen to all those producers that have relied on Murray water now they cannot get the water. That will impact heavily on what we produce. This will inevitably lead to more imports.

Over the years the governments have done a real good job of demolishing most of our manufacturing industry. Now nearly all you can buy is made from rubbish steel. Most tools and parts, bolts,etc. is no better than black polythene. The only advantage of the chinese and korean steel over poly is that you can weld it. There has been an utter sacrifice in quality of manufactured goods.

With the cost of fuel and other inputs rising, I do not see a great future for Australian agriculture.

Yabby,

In some ways you're right we can get some foreign imports cheap and yes you make a buck or two when the weather is right and the $A is low etc.
But that doesn't work for everyone everywhere.

What the Supermarkets don't tell the public is that they stock that which they make the biggest buck on....Suppliers have to pay for floor space and enter into advertising, specials, and preferential cash flow benefits etc all of which pervert capitalism which doesn't benefit the consumer thus giving rise to Pelican and Banjo's observations.
It all boils down to the breadth of your assessment.
As a humanist I find that the only reason we get cheap o/s products is the exploitation of the less powerful....clear evidence that a level platform is so much bull.

*As a humanist I find that the only reason we get cheap o/s products is the exploitation of the less powerful*

Examinator, I strongly disagree with you. For a start, only around
16% of our imports come from China. Just look on our roads, something
like 80% imports. Not from cheap labour countries either.

Every single whitegood in my house is in fact made in Australia. Why?
Because then I can get parts, they are not as crappily made as
some imports, I think they are value for money. What has happened
however is that competition in the market place has forced
manufacturers to take notice of the consumer, something which they
hardly bothered to do, when we had tariffs.

I wish I could find the link again but about a year ago I read
a story on the net, about the history of a whitegoods manufacturer
in Australia, from the 60s-70s. The bloke who owned the place would
rather have been a farmer. When new models were released, they
did not even bother to test them, they reckoned that consumer complaints
would soon tell them if there were any mistakes.

One thing that I drummed into my staff when we were exporting seafood
around the world, was that customers mattered. I wasn't paying their
wages, customers were. When it came to quality control, would they
buy the product if it was their money? That paid huge dividends,
for next week those same customers came back, again and again.

Price is just one of many issues in the market place. People want
value for money. Fair enough. The only way you achieve that is
through competition.

Australia is simply too small a country to make everything and do
it well. So I buy Australian where that is the case, or the price
is within reason, but I won't go not eating guavas or grapefruit,
just because there are non available locally.

Our industries have to become globally competitive, as they have
in the US, Europe, Japan, Korea etc, all large exporters.

rehctub,
Thinking about your question a bit more, it seems that those areas of food production that can adapt to mechanization and bulk handling will survive and those that can't will fail.

Vegetable and fruit seem most vulnerable as there is high inputs such as fuel, labour and fertilizer. Imports will account for some sections of the local industry. That is of concern.

In Australia, we have a growing population, driven by immigration, which increases demand for food and the increasing urban sprawl removes much good productive land from production. I have never seen the merit in covering good land with houses, concrete and bitumen when there is large tracts of unproductive land.

Fishing on the east coast is nothing like it used to be. There are more recreational fishermen than ever and the professionals have become more efficient. This means there are less fish, leading to government buying fishing licences back and the establishment of marine parks, etc. to preserve some fish breeding stocks.

There would be big changes in our diets even now if we had to become self sufficient in food, as a country.

We talk about recycling but the waste in all areas of food usage is enormous. Most going to dumps to be scavanged by seagulls, foxes and rats. half a dozen chooks in backyards would eliminate most household putrid waste. The vast waste in the catering industries, bakeries and green grocers should be addressed. Wheat farmers used to keep some pigs to make use of damaged and low standard grain, but I believe that is history, by regulation.

Sooner or later we will have to address this aspect of waste and recycle it. In the meantimee I hate to think what would happen if our sealanes were cut off, say by regional conflict.

On Lateline Business last night, the Chairman of the ACCC announced that legislation was being passed that will now impose serious criminal penalties on executives of big business who engage in cartel behaviour.

If applied in the food and associated industries, this could well be the single biggest initiative that gets rid of financial leeches in the system thereby leading to lower food prices to the consumer.

RobP,
I would like to think that you are right and that the ACCC will act when the legislation is passed, but I will not hold my breath. I just read your post to Belly in his thread, which clearly shows the polys only think of themselves. They are all bastards.

The only thing that occured, in establishing Canberra, is that they stuffed up a good paddock.

* that those areas of food production that can adapt to mechanization and bulk handling will survive and those that can't will fail.*

Basically yup. Our labour is hugely expensive and lets face it,
Aussies don't want those crappy jobs like picking fruit anymore.
The industry now only survives with backpackers etc.

*I hate to think what would happen if our sealanes were cut off, say by regional conflict.*

Banjo, today everything is global. My John Deere tractor would stop,
if parts from overseas were not available. The plant that produces
bottles for Perth's milk, is made in France. If it breaks down
and no spare parts are available from France, Perth would have no
milk. The list is endless. Veggies are perhaps the exception, as
anyone can grow them in their backyard if required.

* I have never seen the merit in covering good land with houses, concrete and bitumen when there is large tracts of unproductive land.*

Well lets face it, alot of that land grew little but wool. The
wool industry is basically stuffed, now that the Chinese own most
of the wool processing equipment. The flock has dropped from 170 million
to 70 million and has further to fall. Wool will become a niche
industry, little more. That frees up one hell of a lot of land
for other uses.

I'm eternally fascinated by numbers, so forgiveness in advance please, rehctub.

>>the cost of getting a beast from the sale to the abb has gone from $4.00 to $15 in ten years<<

How much would that be per kilo?

Apart from that, there is some other fairly simple maths going on here.

When budgets are tight, the mass of the population will home in on the cheapest products. If those products come from overseas, they don't really notice, they look at them, try them, and if they like them they will buy them next time as well.

If local producers cannot provide the same product at the same quality, they (the producers) will need to look around for crops that will compete. If they cannot do that, they might have a problem, as jingoism commands a fairly limited market premium.

Should our overseas suppliers then increase their prices, they would of course have an opportunity to jump back in.

But I cannot see the justification for increasing the cost of living for all Australians, simply to maintain an inefficient market. It's not that long ago when the Queensland banana crop was wiped out, and I still remember being invited to pay upwards of $10 a kilo, because we weren't permitted overseas product. Sheer, naked, greedy profiteering.

And we don't necessarily need a car manufacturing capability, either, unless they are able to compete on - yes, you guessed it - quality and price. Anyone heard of the Trabant?

Let's keep a level head and resist protectionism. It never works.

Yabby,
your argument in reality has fatal flaws.
My brother in arms has just lost his job at Fisher and Paycal they are moving to Mexico. F&P have arrangements with the local govt to pay peon wages and gain substantial tax breaks and therefore the company can make large profits.

This is scenario is common look at the textile,clothing then go to that country and observe the working conditions/wages. Moving to a country because of enforceable cheaper wages, conditions (safety and environmental) and tax breaks is by any definition exploitation.
Whether you put a pejorative spin on the word is *issue* dependent.
BTW many of the imported cars are full of bits made in exploitative ones.

Also note that not all companies in Japan etc pay reasonable wages. Some people with jobs are compelled to rent hot bed (taxi beds) or effectively cell space to live.

While your white goods maybe Aus made research where the bits come from. Also look at your other consumer toys plasma screen TV, sound systems,computers, appliances, clothes and furniture et al. True we in Aust against these extortionate wage levels so therefore we cut quality.

Need I remind you that some 'cheap pen raised fish' sold in Supermarkets are from polluted water. Chicken meat, pork and some canned food comes from environments whose health standards are far less than ours. Contaminated milk/toothpaste at al. But hey they're all cheap. And who care when we ship all our toxic out of fashion consumerist toys to poor nations when the people have hob's choice.

In reality we're competing with a wage and lifestyle on the backs of the 3rd world and do we care about their health/futures we don't want them here..
One could question our devotion to consumerism that spawns this global exploitation and makes us more vulnerable.
Then again we the public support indirectly many otherwise dubiously profitable industries.
Sorry mate your stated view is very myopic. Perhaps we should discuss what a level playing field is and how capitalism ensures it doesn't exist.

Yabby, You say

"Basically yup. Our labour is hugely expensive and lets face it,
Aussies don't want those crappy jobs like picking fruit anymore.
The industry now only survives with backpackers etc".

My take on the fruit picking is a bit different. I say the government,under Keating, took the incentive out of the work. You may not be old enough to remember, but people used to take their holidays from their normal work and go with the bride in a caravan to the fruit areas and pick. The extra money was used to pay off the land/house and get a start. Vic Rail even had special 'pickers trains' running to the fruit areas. When the Tax File Number was introduced, these hard working people quickly found their holiday work put them in a higher tax bracket and it was not worth the effort. Sydneysiders could go to the markets at 3.00am and do a few hours hard work before starting their regular job and suffered the same tax issue. Typical government taking the incentive away from the willing.

I said *I hate to think what would happen if our sealanes were cut off, say by regional conflict.* My point here is that we are so reliant upon overseas goods that we cannot do without them. We put a lot of effort, after WW11, into becoming self sufficient and the globalism ideology abolished all that. Have a bit more faith in your JD tractor, I have in my MF.


Most of the land now covered by urban sprawl on the coast was rich basalt land which was used as market gardens and dairys. Some inland was only wool growing country, but most towns started life on rivers where the better land was. Look at western Sydney, good land ruined while large areas of tea tree and stunted scrub remain as National Parks. For someone who would have given the family jewels for some of that good land the situation is heart breaking.

Our priorities have been and are definately wrong

Now there's talk of big miners like BHP raiding the fertile Liverpool Plains for open-cut coal. If Australia is to sustainably maintain its own food production, the Government needs to make a stand to protect these fertile areas.

In the last 4 Corners program, the company said it would only mine the ridges around the plains. However its opponents say that there's no way of knowing how the water table is going to be depleted or polluted by such mining operations. Not to mention the fact that when the miner gets its foot in the door, it tends to play the possession-is-nine-tenths-of-the-law game and pretty much does what it wants. Why mess around in a high-value farming area. Where's the Government? Having a siesta?

*The extra money was used to pay off the land/house and get a start*

Actually Banjo, I blame the parents. Alot of them were so keen to
make it easier for their kids, that many brought up a mob of
spoiled brats, who think that the world owes them a living. One
thing that I learned about going through really hard times, it makes
you appreciate the good times. Many people today have only ever known
good times, so are under some illusion that they are doing it "tough"

*We put a lot of effort, after WW11, into becoming self sufficient*

Banjo, the world was a much simpler place then. TV was a luxury,
a 3 by one fibro was the dream, plus a Holden. When I came here
in the 70s, they still had party telephone lines. 2 rings was
Joe, 3 rings was Fred, the girl at the exchange knew everything :)
Today we have complexity, which includes manufacturing processes.

*rich basalt land which was used as market gardens and dairies*

Well we are not short of veggie growing land, but getting short of
farmers prepared to take the risk of growing a crop, only to be
wiped out by a market downturn that week. Its also pointless
producing more milk, for those Japanese/NZ owned dairy companies
have just dropped the price to 25c or so per litre. Last year
they were still screaming for the stuff.

This is really where I see a huge problem. Buyers are so good at
screwing down prices when the slightest surplus appears, that
producers eventually lose interest. Next thing you have a massive
shortage. Take oil. It dropped down to 30$, so the first thing
that happened was that drilling rigs stopped drilling etc. Yet
in a couple of years, everyone will be in a panic, when oil is
short again. The same principle applies to other commodities,
including food.