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Troubling trends in food prices revealed.



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News Release

TROUBLING TRENDS IN FOOD PRICES REVEALED

2 March 2004 NR 20/04

Troubling trends have been revealed in a report on food pricing released by the Australian Government today, according to the National Farmers’ Federation (NFF).

NFF Farm Business and Economics Committee Chair, Mr Charles Burke said the concerns raised by the report emphasised NFF’s calls for improved access by farmers to collective bargaining, improvements to the Retail Grocery Code of Conduct and more training for farmers.

The Report - Study of food price determination - shows that the margin between the farm gate and retail prices for many foods has increased.

“The increased margin raises some important concerns for NFF,” Mr Burke said. “While the report does not provide direct evidence of abuse of market power by those that buy from farmers, it shows that many farmers do not obtain a benefit from increasing retail prices for food.

“The increased margin could occur for legitimate reasons, but the report does not determine the reasons for the higher margin. Therefore, NFF is pleased that the issue is being referred to the ACCC for further investigation.”

Mr Burke said the increased margin demonstrated the importance of NFF’s proposals to improve farmers’ access to collective bargaining.

The Government’s report into the Trade Practices Act (the Dawson Review) accepted NFF’s recommendation that farmers be able to use a cheaper, simpler and quicker notification process to obtain approval for collective bargaining. The importance of this policy was affirmed by the report of the Senate Inquiry into the TPA, released yesterday. NFF is seeking introduction of legislation to implement this policy as soon as possible.

“The increasing margin also emphasises the importance of improvements to the Retail Grocery Industry Code of Conduct,” Mr Burke said. “This Code was introduced to address concerns that farmers suffer from market dominance.

“However, NFF believes that the Code needs significant improvement for it to be effective in advancing farmers’ interests in markets where a few buyers dominate. NFF’s suggested changes include improving the transparency and consistency of market operations, improving internal dispute resolution, and providing strong commitments to the spirit of the Code from signatories.

“Moreover, the Code administration committee is unbalanced in its composition, resulting in farmers being under-represented relative to the purchasers of farm produce. This has stymied reform of the Code.

“Lastly, NFF considers that the issues raised by today’s report indicate the need for improved training for farmers in

collective bargaining, marketing and legal issues related to market power. NFF is seeking increased funding from the Federal Government for such programs,” Mr Burke said.

NFF’s submission to the Government and Senate Inquiries into the TPA and to the Review of the Retail Grocery Industry Code

Contact: Mairi Barton, General Manager Public Relations, (02) 6273 3855 or 0408 448 250 email: mbarton@nff.org.au

Copyright © 2004. National Farmers' Federation. All rights reserved.