NSW FARMERS is urging the Australian Government to take note of a US Presidential Executive Order on Promoting Competition in the American Economy to prohibit unfair practices by US chicken meat processors and against chicken growers .
“Australia’s poultry meat landscape is highly comparable to the United States,” NSW Farmers president James Jackson said.
“Poultry farmers in both countries unsurprisingly face weak bargaining power and diminished returns.
“President Biden’s acknowledgment that consolidation weakens competition is a breakthrough moment, and we hope to see similar recognition here in Australia.”
“The Executive Order prohibits unfair practices in US grower ranking systems, in which poultry processors exercise extraordinary control over the key inputs that determine the amount farmers are paid and require farmers to assume the risk of factors outside their control, often leaving them economically vulnerable.”
“Poultry farmers do not own the birds but care for them on behalf of powerful processing companies and are required to own and maintain the sheds, equipment and resources needed to do this.”
“Unfortunately, the poultry meat-processing landscape in Australia is also highly concentrated.”
Mr Jackson said growers have limited choice in who to contract to, and geographical constraints diminish their flexibility even further.
“Growers can be left in a situation in which they have no option but to accept growing contracts that they wouldn’t otherwise.”
“Essentially, poultry farmers are required to make sizeable infrastructure investments only to face the possibility that their contracts can be terminated with little to no notice, with no alternative contract arrangements to fall back on.”
Lack of competition criticised
NSW Farmers has fought hard on behalf of its members in poultry meat and other fresh-food industries who face challenges arising from a lack of competition in their supply chains.
A number of inquiries at state and federal levels have sought to diagnose and address competition issues, which are also rife in the dairy industry.
Mr Jackson said the national perishable agricultural goods inquiry conducted by the ACCC last year was a breakthrough for farmers and for NSW Farmers advocacy in this space.
“The ACCC acknowledged power discrepancies are likely to arise in these supply chains, and made a suite of recommendations including a prohibition on unfair trading practices,” Mr Jackson said.
“We still await the government’s response to this inquiry and a tangible outcome for our contract poultry growers. NSW Farmers continues to urge the Australian Government to institute a mandatory code of conduct for the poultry meat industry.”
Source: NSW Farmers