Co-operatives prominent in Agricultural Competitiveness Paper

21 October 2014

The Government’s Green Paper on competitiveness in agriculture released yesterday calls for a better deal for farmers, suggesting more farmer-owned co-operatives could play a key role especially in the way that supermarkets negotiate prices.

The green paper, which cites the BCCM’s submission to the inquiry as well as the submissons of BCCM Members, says co-operatives are key to bringing much-needed competitiveness and fairness from the farm to the fork.

In launching the paper at the National Farmers Federation conference in Canberra, Agriculture Minister Barnaby Joyce said the most successful rural organisations in Australia were co-operatives and his Government would consider what it could do to foster more co-operatives in the agriculture sector.

Rural and retail co-ops have long thrived in Australia. Third and fourth place in this year’s IBIS World Top 500 Private Companies list is occupied by leading agricultural co-ops, Murray Goulburn and CBH Group.

Mr Joyce indicated his support for the co-operative model in granting CBH exemption from the new port access code for grain exporters.

The recommendations in the paper about improving relations between farmers and supermarkets come after years of talks around a voluntary code of conduct. The uneven level of market power through the supply chain was seen as a major cause for lower returns to farmers.

The green paper addresses what the Australian Government can do to foster more co-operatives in the agriculture sector, and the Government wishes to understand obstacles to establishing new co-operatives. The paper suggests states and territories should adopt a ‘co-operatives national law’ which would make it easier to run a co-operative across different jurisdictions.

The acknowledgement of the important role of co-opertives in levelling the field in terms of market power reinforces the draft findings of the Harper Competition Review on the role of co-operatives to strengthen the bargaining position of smaller businesses.

A plan for the co-operative and mutual sector which will be launched at the November BCCM Summit will provide government with a blueprint for a raft of initiatives to promote the growth and development of co-operatives and mutuals. The BCCM has renewed its call for a broad-based inquiry to help government to understand the impediments and obstacles to establishing new co-operatives.