Low prices paid to livestock producers not reflected at supermarket: Ag minister

Agriculture Minister Murray Watt wants a “reduction” between the rates livestock producers receive at the farmgate and what supermarkets are charging.

The federal government wants the gap closed between collapsing farmgate rates paid to beef and sheep producers and retail prices supermarkets are slugging shoppers, Agriculture minister Murray Watt says.

In a wide-ranging speech to the Rural Press Club of Victoria on Thursday, Mr Watt acknowledged that the situation was “a really big issue” for both farmers and consumers.

“I know there is a lot of frustration in the general community that the lower prices that producers are receiving are not necessarily being reflected at the supermarket,” he said.

“Of course, retailers and others do have additional costs, it is not just the farmgate price. But I think we’d like to see some reduction in that differential going forward.”

Mr Watt said while he had personally noticed that retail lamb prices had dropped from three to six months ago, “it is not as if they (the prices) are correlated directly”.

“I don’t think it’s anyone’s fault, we’re seeing that combination of factors with oversupply, people are worried about drought,” he said.

Mr Watt said the government was “beginning to take action” on the situation through a broader competition review ordered by Treasury to look at segments of the economy where concerns had been raised about a lack of competition and market concentration.

There will also be a further review of the food and grocery code “to look again at the level of competition that exists in the supply chain overall”.

Meanwhile, Mr Watt said the federal government was considering a range of options along with buybacks in its plans to reclaim 450 gigalitres of environmental water to the Murray Darling Basin, including water efficiency and infrastructure projects.

He said he had discussed the need to “respect the needs of the agriculture sector” with Water Minister Tanya Plibersek.

“We absolutely have said buybacks will need to be part of the solution … but we absolutely have not decided we will deliver this only via buybacks,” he said.

Agriculture minister Murray Watt. Picture: Lyndon Mechielsen/Courier Mail

Earlier this year Ms Plibersek brokered a deal with the Queensland, NSW, South Australia and ACT governments to allow Commonwealth buybacks of irrigation licenses to boost environment flows and extend infrastructure project deadlines.

The Victorian government has refused to support buybacks.

Mr Watt also admitted that the rollout of repairs and government response to last year’s flooding across Victoria “has not been as swift as any of us would have liked”.

He said emergency flood relief had already been activated for the East Gippsland and Wellington shires following bushfires and floods in early October.

Flood assistance has also be activated for another six Victorian councils impacted by last week’s extreme weather events.

Mr Watt also launched Wine Australia’s Grape Price Indicators dashboard on Thursday, which will provide industry a “clear picture” of the future direction of commercial winegrape prices.