Farmers are telling the federal parliament they want wholesale reform to Australia's competition laws.
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The industry is citing a host of examples where concentrated market power, supply chain business mergers and weak rules are eroding fairness, farm productivity and viability.
The National Farmers' Federation and other agriculture sector lobby groups have warned exploitation of market power is undermining producers and small- to medium-sized farm industry businesses across a host of categories from poultry meat to grain exports and food retailing.
Their arguments are, in part, supported by former Australian Competition and Consumer Commission chairman, Allan Fels, who agreed "merger laws need to be changed".
Professor Fels, now with University of Melbourne and Monash University after a decade leading the ACCC until 2003, also called for a review of trade and foreign investment policies which harm competition and national competition policy.
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His views, and those of farm sector bodies, are among submissions to a parliamentary inquiry on competition and economic dynamism which resumes public hearings in Canberra next week.
Professor Fels cited concerns about greater concentration of market power and the ACCC's lack of success in challenging anti-competitive merger activity, which he insisted was not the fault of poor court litigation skills by the competition watchdog.
Corporate defence teams of lawyers, economists and consultants fighting ACCC decisions had become "very heavily resourced and deeply skilled" in the past two decades.
He said the merger test should more clearly articulate and prohibit takeovers which created, or added to, a substantial degree of power in a particular market.
The NFF argued farmers did not shy away from competition, and in fact, had benefited from agricultural commodity marketing reforms in the past 30 years.
However, the sector's ability to continue to achieve greater efficiency productivity and sustainability gains in local and overseas markets was being dampened by growing market concentration along the agricultural supply chain and reduced competition, leaving the viability of many farms threatened.
Perhaps it's high time we listened to the experts
- David Jochinke, National Farmers Federation
Victorian farmer and NFF vice president, David Jochinke, said for years the ACCC itself had cried out for reform.
"They've had a front row seat to merger after merger that has gone through without sufficient scrutiny," he said.
"Perhaps it's high time we listened to the experts."
In its submission to the parliamentary inquiry NFF noted while in recent years Australian farmers had taken advantage of favourable seasonal conditions and high global commodity prices, greater market concentration may cut returns to farmers.
NFF said agriculture relied on transparent marketplaces which promoted competition within supply chains and allowed farmers to access inputs and sell produce at competitive prices.
While food and fibre producers represented one of the lowest rates of market concentration in the economy, these individuals and other small service industry operations in remote regional locations were sandwiched between heavily concentrated input and output markets which influenced the overall conditions available to farmers.
Disadvantaged
"Both farmers and consumers are at a disadvantage," Mr Jochinke said.
"The big corporates who buy from farmers have all the information about costs up and down the supply chain, but none of this is shared with farmers.
"Getting a fair price should start with getting fair access to information."
He highlighted chicken meat producers as an example of farmers being "the meat in the sandwich".
"Just 10 years ago, there were nine big chicken processing plants in NSW, owned by six different companies," he said.
"Today, there are two companies and four plants operating regional monopolies."
Farmers want a suite of competition reforms, ranging from improved price transparency measures and improved access to dispute resolution, to more resourcing to guarantee the work of the ACCC's agriculture unit.
Tougher penalties
GrainGrowers' wish list featured a range of Competition Act changes, including bigger penalties for uncompetitive behaviour and greater recognition that consumers were not the only victims of anti-competitive behaviour.
Its submission noted how an influx of small and mid-sized participants moved up from domestic to export grain trading in the early 2000s, but many had since left the industry or focused on accumulating grain for large operators.
Small players with less capital are confined to containerised exports, often at large freight disadvantages
- GrainGrowers
"For the most part, only well capitalised predominantly foreign-owned market participants are able to capture the economies of scale of loading bulk vessels," the grain advocacy group said.
"Small players with less capital are confined to containerised exports, often at large freight disadvantages in export markets where bulk cargoes are the only viable option."
The inconsistent availability and high cost of containers for grain exports also disadvantaged this trade, excluding small to medium buyers from providing local competition.
GrainGrowers also blasted ineffective regulation of container ports which could not sufficiently constrain shipping terminal operators from exercising market power, particularly in relation to port charges.
Port efficiency had to improve, too, to reduce supply chain costs, capture more exports opportunities and cut the cost and waiting times of imported farm inputs.
A 2021 World Bank study found Australia's major container ports fell within the world's worst performing 20 per cent of all ports, except for Brisbane, which ranked among the worst 30pc.
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