Speech - Paddock to the plate: a fair return for producers

I rise to speak to the 'Paddock to the plate: a fair return for producers' report conducted by the Economic and Finance Committee. I was gladly surprised when the member for Light came and proposed terms of reference in this way to help look at an issue that
is very important to South Australia. We know that our agriculture and food manufacturing industries are the largest employers in South Australia. They employ one in five South Australians. Happily, that is more than the level of people employed in the Public Service in South Australia. For us to help unlock the potential of this industry is extremely important.

We undertook to take evidence right across South Australia to understand and get at the heart of what roadblocks there are in the way of helping us to get better returns for producers and also for manufacturers. I want to pick up on three of the recommendations. The first of those is in relation to greater partnerships and coordination with the state agricultural bureaus.

When we were out in the Barossa and had a day's hearings in the Barossa Council chamber, a number of the agricultural bureaus came to speak to us and they were quite frank about the issues they were facing. Energy costs was an issue they talked about quite strongly, and they showed their frustration about the current energy situation and how that is impacting upon their business. Some of the dollars they were talking about where I am sure hurting the ability of their businesses to operate and grow.

But certainly our state's agricultural bureaus are an important part of helping us to grow, modernise and advance agriculture in South Australia. It is a body primarily set up to help improve and look at innovation in the production and growing of food for consumption, and they do a great job They get out and apprise themselves of what is going on in the world, so to look at having greater interaction with agricultural bureaus is extremely important.

The second recommendation is around planning restrictions. The phrase 'right to farm' gets bandied around in this place quite a lot, and I know that it gets bandied around in the council quite a lot. It is very difficult at times to understand what that means. One would consider that farmers have the right to farm. They are producing billions and billions of dollars a year worth of X farmgate value; they are able to farm.

To try to get into the specifics of the concerns of a number of farmers, many of whom exist in my community, I think the central way we can and should define 'right to farm' and those who feel that their right to farm is under threat is due to planning and mixed-use considerations: for example, where there are competing agricultural and farming systems that do not really work
together. That is certainly an issue anywhere where you have broadacre and horticulture sitting by side by horticulture, most predominantly viticulture.

The two competing systems do not always work well together, whether that be burn-offs that the broadacre farmers do from time to time which is not advantageous and is potentially dangerous towards grapegrowers and, by the same token, some spraying that grapegrowers undertake that may damage broadacre farmers' crops, and spraying also undertaken by broadacre farmers that
may damage grapegrowers' crops. That is an issue that needs to be dealt with, and it is something in an evolving space.

I look at the work that Biosecurity SA has done. I also look at, especially in the Barossa Council area, the way that they have tried to advance new planning decisions to help take account of these things with the use of buffer zones and screening, essentially to try to find a planning solution. There are broader planning issues. We know in the Barossa that if you want to set up a cellar door, that is okay, and if you want to set up a tourism venture, that is okay. But as soon as you want to set up a retail outlet selling the food you grow on your farm, that becomes a lot more difficult from a planning perspective.

To set up small-scale production that value-adds your on-farm produce also has some difficulties. That is why I am glad that, even though this is a majority government committee, the committee was mature enough to talk about the fact that there are current planning restrictions that place an undue burden on farmers. We need to preserve their right to farm so that they can continue
to grow the produce that helps to deliver export dollars into South Australia. If we are lucky enough to win next year, it is something that I will certainly be pushing hard for, because I think that my community in the Barossa is at the coalface of growing residential development butting up against broadacre farming, butting up against viticultural operations.

We need to find ways to make these all work in harmony and that there is greater understanding between the different groups and greater acceptance that we live in a broader community that needs to be mindful of what others are doing in and around that community. So I very much support recommendation 8, as it seeks to highlight and give voice to an issue that has frustrated many in the farming community for a long time. The last recommendation I want to talk about is in relation to the grocery code of conduct. I note that the recommendation is worded in such
a way as to be as soft as possible, and I certainly supported that.

Recommendation 9: suggests that [a] statutory review of the Grocery Code of Conduct, to be conducted at the request of the responsible Commonwealth Minister in 2018, should consider recommending that the Code be mandatory in nature.

I think this is about as soft a way to put a recommendation. I am happy to support it in this context. It is written in a very sympathetic and soft manner because what we are talking about is a huge dilemma in that we know that there are issues around major supermarkets not always dealing fairly with their suppliers. The ACCC has undertaken some very significant investigations that have resulted in multimillion-dollar fines against major supermarkets. We want that problem to be fixed because markets are not always perfect, especially in the grocery sector where there is a concentration of power that leads to an imbalance of power, and it is always the smaller player in that negotiation that comes under fire.

As a community, we want to get to the right answer whilst still preserving the rights of businesses to undertake vigorous negotiations to deliver the best value produce at the cheapest price for its customers. A mandatory code of conduct in and of itself goes to a step that Australians have not been willing to go to up until this point. The idea of trying to have a court decide where the
line is between fair and vigorous negotiation and undue market influence is a very fine line to achieve and one that I think is quite difficult.

Essentially, what we are trying to express through this report is that there is still an issue there, that there is still an imbalance of power and that it needs to be dealt with and fixed. A mandatory code of conduct for the grocery industry is a very extreme step, but we have to look at all options on the table. We need to keep applying pressure on those who exert or have the lion's share
of the bargaining power in any two-way negotiation. They need to be responsible. We are watching them and watching their conduct and, if we see that there is a further misuse of power, we may have to go to a stage where we talk about contemplating a very draconian step.

We want to make sure that our food industry grows and prospers. It is extremely important that that happens. I look at South Australia and I look at Foodland, for instance. Foodland is a great supporter of South Australian produce. I believe that one of the key reasons we have as strong a food industry in South Australia as we do is that we have a grocery supermarket chain that has been willing to support local producers to help them to develop economies of scale, which helps them to tackle other markets, such as dealing with other major supermarkets and also growing markets interstate and then growing markets overseas.

The reason I know this works is that I spent 20 years of my life before coming in here doing just that with the family business. It is why this report is so important and why I am happy to support it. I look forward to a better way of operating for our food industry into the future so that we can grow and gain more of those desperately needed jobs for our state.