A parliamentary committee has recommended that primary producers be given more support to manage big retailers.
The committee recommended the South Australian Small Business Commissioner (SBC) be provided with greater powers to support primary producers.
The ‘From the Paddock to the Plate – a Fair Return for Producers’ report produced by the Economic and Finance Committee was recently tabled in state parliament and recommended a range of measures to correct the imbalance between producers and big retailers in Australia.
The committee heard evidence from a range of producers and industry associations, with a common theme of producers often accepting breaches in contract from retailers out of fear their contracts would be terminated if complaints were lodged.
The committee recommended the SBC receive additional funding to provide an advice unit to allow primary producers to lodge offers of agreement with the unit on a confidential basis and for advice on whether agreement terms are fair.
The report was the result of an inquiry initiated by Member for Light Tony Piccolo after he has been approached by market gardeners, wine makers and other primary producers.
Mr Piccolo said that primary producers’ livelihoods were at stake when big retailers changed the terms of their contracts without notice.
“The committee heard from a number of witnesses, some in confidence, who provided examples where the terms of conditions of contracts were unilaterally changed by the big retailers,” he said.
“The problems currently experienced by local food processors Laucke epitomises what is happening in the market place.
“In the longer term, greater competition in retailing will assist producers obtain a fairer price for their products, however, in the short term we need government interventions to ensure that smaller businesses are going to survive.”
He said the power imbalance between producers and retailers was “huge and real” which impacted the viability of local producers.
Many witnesses were critical of the current federal regulation, the grocery code of conduct, which imposes greater restrictions on producers and wholesalers, not the retailers.
The committee heard evidence that co-operative business models could help close the power gap as they increase the market strength of producers.
Mr Piccolo said the committee recommended the state government website included information about how co-operatives can help producers operate in larger supply chains.
The 156-page committee report makes a total 13 recommendations and can be accessed at https://www.parliament.sa.gov.au/Committees/Pages/Committees.aspx?CTId=5&CId=292.