Peter Andren (Calare, Independent) Share this | Hansard source

And Filipino bananas. This government’s so-called mandatory horticulture code of conduct represents a broken promise. The former Deputy Prime Minister and Leader of The Nationals, John Anderson, made the promise on behalf of the soon to be re-elected coalition government on 1 October 2004 to impose a mandatory code of conduct on the industry to cover all stakeholders in the industry, from growers through to produce buyers who are, to quote the member for Gwydir, ‘in many instances large supermarket chains’. That press release states:

The code will give producers a fairer deal on their terms of trade and on resolving disputes with produce buyers, which are in many instances large supermarket chains. It demonstrates The Nationals’ commitment—as part of a re-elected Coalition Government—to providing a fair deal for primary producers and small businesses in regional Australia.

I well remember when that came out. It was during the 2004 campaign and I was in a shopping centre in Orange along with Peter Darley—an orchardist, and now the Chair of the Horticulture Committee of the Farmers Association—other growers, their wives and supporters handing out apples to people freely in that shopping centre as a mark of the importance of the industry to the Orange district and further afield. It goes right through to Bilpin and areas on the Blue Mountains, down into the Cowra district and beyond, to the area around the Southern Highlands and down into the southern parts of New South Wales. We are talking here not only about the apple industry but about all of the industry—fruit and horticulture in general. The government’s so-called ‘mandatory’ horticulture code of conduct represents a broken promise, and that has been told to me over and over again by Peter Darley and other growers who are tremendously disappointed at the outcome of what they believed was going to be a full delivery of that undertaking made during the 2004 campaign.

It is a twice-broken election promise. It was not delivered by legislation within 100 days, and the code we got at the end of last year does not include the large supermarket chains, whatever the voluntary or contractual arrangements might be. Without those supermarket chains, the code will do nothing to address the imbalance in the fresh fruit and vegetable marketplace. The mandatory code provided in these regulations will affect only the relationship between our growers and the wholesalers operating from this country’s central markets. The growers do not want a code without the supermarket chains, nor do the central market operators.

I have been having meetings with many people from both of these groups since last year, when it first became apparent the government was going to let the supermarkets off the hook. This is perhaps one of the most interesting developments in this whole issue. It was the relationship between these two parties that first motivated growers to call for a code of conduct. The government has only got it half right. The code currently provides definitions of wholesalers as either agents or merchants, which gives growers more certainty when it comes to the price they receive for their produce and how much it is sold for at the market. But defining buyers as agents or merchants helps growers track the price they get for their produce from the wholesalers at the central markets.

For many years the problem has been the lack of clarity as to whether the buyers or wholesalers are agents selling a grower’s fruit and vegetables on behalf of the grower for a commission or merchants buying it outright from the grower and selling it as their own property. The importance of this definition is in the information the growers get as to which retailer has purchased their fruit and vegetables and at what price. The proper definition ensures a document trail that allows tracking of prices paid and where the product ends up.

With no definition of how buyers and wholesalers were operating under the Trade Practices Act, they were immune from regulation determining their obligations to provide information to growers. This is very significant because of the fact that in trading fresh fruit or vegetables, the longer it takes to sell, the less fresh the produce is—as the member for Kennedy so graphically described—and thus the less valuable it is. There was nothing in law to compel the buyer or wholesaler to inform the growers when the cases of fruit or vegies were sold or the exact price they were sold for. Growers were being given an average price per case across the board rather than the prices of particular cases of their crop.

The inclusion of specific definitions of buyers as agents or merchants gives a new transparency to the process of taking produce to the fresh fruit market. But the gains of this aspect of the code have been severely undermined by the failure of the government to include retailers, most importantly the major supermarket chains, in its regulations. Indeed, it has brought the growers in central markets together against the mandatory horticulture code of conduct, or the half-mandatory horticulture code of conduct. The central market authority has described this current code as anti-competitive and discriminatory. The buying power of the big supermarkets is so huge—as, again, the member for Kennedy described—that they will have the power to basically set the prices they pay to the wholesalers. When there are only two major buyers—and because we are dealing with fresh produce—they have the power to dictate price. Further, as the retailers are not covered by the code, there is nothing to stop them conducting their business with growers or wholesalers who choose to operate outside the central market system, which then removes these transactions completely from the regulations of the code, leaving the growers back where they started.

The whole process of building the mandatory code has been fraught, and it has been obvious the government has aligned itself firmly with the supermarkets’ best interests. Again and again I receive complaints from growers that the consultative process to work out the form of the code was little more than a political exercise, with the vast majority of meetings being held in capital cities—with some in larger cities; I think Cairns was one—rather than in the growing regions.

Further, it soon became apparent that the government—The Nationals in particular—had no intention of honouring the full extent of the promised code. By July 2006, well after the 100-day deadline, the new Deputy Prime Minister and leader of The Nationals stated that the government was not about to regulate the retail sector with the mandatory code, and his agriculture minister weakly supported him by saying, ‘Retailers were never part of the election commitment which was written down.’

This is one of the weakest and most gutless excuses for a policy backflip I have heard in my time in this place. If the member for Gwydir’s press release does not count for a documented written election commitment then I do not know what does. The exemption of retailers, the major supermarket chains, food processors and exporters makes this code useless. Whether supermarkets have voluntary codes of conduct for themselves or terms of trade agreements with wholesalers, or growers for that matter, none of this is entrenched in law and, as such, can be completely ignored if the supermarket retailers deem it necessary. Market conditions will rule, and we will not see compliance with voluntary codes of conduct if it does not mean maximum profit returns to the shareholders. Rather than level the field for all players in the horticulture industry, this mandatory code of conduct entrenches the advantage of the major retail grocery chains as the biggest buyers in the marketplace, be that within the central wholesale market system or outside it.

As far as I am concerned, the six-year battle of my local Calare growers is not over. Until the horticulture mandatory code of conduct includes all players in the horticulture industry—growers, wholesalers, buyers and retailers of all sizes—my campaign for a fairer deal on behalf of our growers will continue, as will my and my growers’ criticism of the recommendation by Biosecurity Australia to allow the importation of apples from fire blight affected countries such as New Zealand and no doubt North America and other places. I support strongly this motion to disallow the Trade Practices (Horticulture Code of Conduct) Regulations 2006, and I ask whether those other coalition members from rural constituencies are defending these regulations.

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