NSW Farmers has called on the federal government to deliver on a key election promise to protect small businesses from larger partners who force them to accept unfair terms.
A three-month Australian Competition and Consumer Commission (ACCC) probe identified potential unfair contract terms (UCTs) and a power imbalance between farmers and big food businesses, validating concerns about the dairy, poultry meat and horticulture supply chains.
Family farming operations were often ‘price-takers’ in the supply chain, NSW Farmers President Xavier Martin said, faced with a ‘take it or leave it’ approach from large processors or retailers when trying to get the food they grow to consumers.
“I think most Australians would be shocked to learn about the way some of these farmers are treated in the production of the food we all enjoy,” Mr Martin said.
“The problem is farmers are relatively small compared to a handful of major players, and for many if they don’t ‘play the game’ they face financial ruin.
“The government’s steps towards outlawing UCTs is an important step forward in making fresh food supply chains more sustainable.”
Prior to the election Labor promised to make unfair contract terms illegal so small businesses could negotiate fairer agreements with large partners, giving businesses with fewer than 100 staff or a turnover of less than $10 million a real shield against dodgy contracts. This has now been introduced in Parliament, and Mr Martin said there was a need for it to be delivered swiftly as there were still many reports of family farmers missing out on the “fair go” Australia prided itself on because of the concentrated market power of big business.
“With so little competition for farmers to sell to, these big companies are basically able to offer contracts on a take it or leave it basis,” Mr Martin said.
“We have seen that when those big supply chains break down, Aussie families end up paying more – and none of that flows back to the farmers who actually grow the food.
“If we want a stronger, more sustainable food supply chain then we need to ensure fairness for all involved.”
