A parliamentary committee has recommended that primary producers be given more support to manage big retailers.
The committee recommended that the South Australian Small Business Commissioner be provided with greater powers to support primary producers.
The report titled ‘From the Paddock to the Plate – a Fair Return for Producers’ produced by the Economic and Finance Committee was tabled in State Parliament last Tuesday.
The report recommends a range of measures to correct the huge power imbalance between producers and the big retailers in Australia.
The committee heard evidence from a range of producers and industry associations. A common theme was that producers often accepted breaches in contract by retailers, fearing that their contracts would be terminated if complaints were lodged.
The committee has recommended that the Small Business Commissioner receive additional funding to provide an Advice Unit. This would allow primary producers to lodge offers of agreement with the unit on a confidential basis and to obtain advice on whether the terms of the agreement are fair.
The report is the result of an inquiry initiated by Light MP Tony Piccolo after he was approached by market gardeners, wine makers and other primary producers.
Mr Piccolo said 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,” Mr Piccolo 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.
“The power imbalance between the producers and retailers is huge and real. It impacts on the viability of our local producers every day.”
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 recommended the South Australian government institute a state-based mandatory Code or add to the regulations within the Small Business Commissioner’s current jurisdiction.
These changes would fill the gap between the Horticulture Code of Conduct and the Grocery Code of Conduct.
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 SA government website include information about how co-operatives can help producers operate in larger supply chains.
“The committee recommended that the relevant government departments conduct audits of the relevant legislative instruments and grant programs to determine whether co-operatives are considered equal candidates through the application process,” Mr Piccolo said.
“It recommends that any barriers to co-operatives in the grants application process be removed.”
The report cites evidence from primary producers in the Barossa that some current planning and development laws, regulations and policies act as a barrier to the growth of artisan food and wine businesses in key tourism and primary production regions.
Mr Piccolo said these artisan small businesses offered real opportunities for business growth and new jobs in key tourism regions.
“I was pleased the committee recommended that the Planning Minister undertake a review of the relevant planning laws and regulations with a view of removing those barriers,” he said.
The 156-page committee report makes a total 13 recommendations and can be accessed at parliament.sa.gov.au/Committees/Pages/Committees.aspx?CTId=5&CId=292.