Farmers are leaving the industry because of ‘unethical’ treatment by supermarkets

Supermarket giants are not paying farmers enough to cover the costs of producing food, and growers are too scared to bargain for a better price.

Australia's two major supermarket chains, Coles and Woolworths, have come under scrutiny for their role in the cost of living crisis in the country. Picture: Getty Images

Fruit and vegetable growers are leaving the industry because “unethical” supermarket giants are not paying them enough to cover the costs of producing food and poor regulations mean farmers are too scared to bargain for a better price.

Dozens of fruit growers in Victoria have sold their properties in the past three years, and the sector’s representative body expects the exodus will “increase dramatically” over the next 12 months if the government does not act to end the supermarket stranglehold over producers.

Speaking at the senate inquiry into supermarket prices, Fruit Growers Victoria grower services manager Michael Crisera said higher input costs for producers were being met with lower prices paid by retailers for produce.

“We know there is an abuse of market power by supermarkets,” Mr Crisera said.

“A limited number of buyers is one part of the problem and it is compounded by a lack of price transparency and the fact that our growers sell a perishable product.

“The result is growers are often selling their product for below the cost of production under the threat of spoiling fruit, or later retribution.

“This is not sustainable.”

The grower collective has called for an overhaul of the voluntary code of conduct that is meant to regulate the relationship between retailers and producers, saying “enforcement is rare and noncompliance is widespread”.

They also want to see greater powers given to the Australian Competition and Consumer Commission.

“I’ve seen 20 members sell or exit the industry over the past three years and I suspect those numbers are going to increase dramatically over the next 12 months,” Mr Crisera said. He said suppliers feared “stepping on the toes” of supermarkets by advocating for a better price and described the behaviour of supermarkets as unethical.

Last year, 80 per cent of farmers surveyed by the National Farmers’ Federation said they were concerned about market power, particularly those producing fruit and vegetables, ­horticulture and poultry.

The NFF’s general manager of rural affairs, Charlotte Wundersitz said that the organisation had been calling for an overhaul for decades.

“The (2020) Perishable Agricultural Goods Inquiry by the ACCC is a perfect example of recommendations that should have been seamless to implement and we are now sitting here four years later seeing the same situation reporting the same extremely concerning instances of behaviour of people upwards in the supply chain.”