On Saturday Barnaby Joyce and Tony Abbott released the long-delayed Agricultural Competitiveness White Paper.
The Government feels that farm businesses, "especially those of a smaller scale", are vulnerable to "anti-competitive market behaviour or unfair market practices".
So they want to establish a new commissioner within the Australian Competition and Consumer Commission to make the ACCC more "farm savvy".
Yes, I admit this all sounds pretty dull and bureaucratic.
But official government white papers have to be coy. We don't. The Abbott Government is really talking about a regulatory crackdown on Coles and Woolworths — the twin spectres haunting Australian retail and agriculture.
The journalist Malcolm Knox describes the two companies as "Supermarket Monsters". They are anti-farmer, anti-competitive, oligopolistic, bullying, overbearing, and so forth.
Indeed, no hyperbole has been undredged in the rhetorical battle against Coles and Woolworths. Last year Bob Katter even compared the installation of traffic lights in a north Queensland town near a Woolworths outlet to the "Norman Conquest".
How did discussion over the relationship between farming and grocery retail in Australia become so unhinged? And why is the Government indulging these fantasies — pushing the ACCC into a battle with Australia's supermarkets?
This is what happens when agrarian socialists team up with foodies.
We're in the middle of a sustained price "war" between the two major supermarket chains in Australia. The battle is mostly waged around private labels — the supermarkets' own branded cheap products that they have more efficiently integrated into supermarket supply chains.
The opening salvo of this war was the announcement by Coles in January 2011 that it was going to cut its private label milk down to $1 a litre. (It's tempting to write the "infamous" announcement, but the idea a basic consumer product price cut could be both famous and bad just shows how batty the supermarket debate has become.)
That was four years ago. Since then, the retail contest has been joined by Aldi and Costco, two firms pushing the prices of groceries lower again. Aldi's German cousin, Lidl, the fourth largest retailer in the world, is set to enter Australia as well.
Changes to grocery markets have been single-mindedly in favour of consumer interests. Cheaper goods, more availability, more competition, and, with the increasing availability of online shopping, incoming technological change. All good things.
Is this price and service competition hard on producers? No doubt. But the Agriculture White Paper gives the political game away. The supermarket's much fretted over market power and industry dominance is in comparison to the diverse and diffuse farming sector: "The relatively small, independent nature of farming means that farmers can be at a commercial disadvantage relative to buyers."
If a power imbalance is the problem, the solution surely is to continue the consolidation of farm operations that has been going for decades. Yet, as Bernard Keane pointed out on Crikey yesterday, the White Paper is so enamoured by the romantic image of the family farm and the Nationals heritage that it couldn't encourage such corporatisation.
This is the true heart of the supermarket debate: a romantic vision of small family farming clashing with consumer demand for ever cheaper and more convenient groceries.
Anyway, if you remember it wasn't so long ago anti-supermarket activists were concerned grocery prices were too high.
In 2008 Kevin Rudd launched GroceryChoice — Labor's policy to tackle the Coles and Woolworths menace. GroceryChoice was a website that compared the prices of a basket of goods at the different outlets. The goal was to help consumers navigate the apparently turgid waters of retail competition.
The irony was that according to GroceryChoice's calculations, sometimes Coles was cheaper than Woolworths, sometimes Woolworths was cheaper than Coles, usually Aldi was cheapest than either of them ... but if you wanted to save on your grocery bills you should almost never, ever, shop at an independent supermarket.
So, yes, GroceryChoice empowered consumers. It empowered them to rely more on Coles and Woolworths. This was a classic populist own goal. The website was shut down within a year.
Now the concern has seamlessly changed from Coles and Woolworths being too expensive to a concern that Coles and Woolworths are too cheap.
In his book Supermarket Monsters, Malcolm Knox writes about supermarkets in trenchant, morally-laden terms. He suggests the Australian population is either wary or openly hostile to Coles and Woolworths. Those who do not shop there are "conscientious objectors". He throws every charge he can at the two companies, hoping some will stick.
In this interview with ABC's PM program, Knox clarifies his basic economic objection: having pushed prices down, Coles and Woolworths might one day push consumer prices up. They might beat all those new competitors, corner the market, abandon their cutthroat competition, and decide to jointly exploit customers. One day $1 milk will be hiked to $5 milk.
Speculating about the future is a fun parlour game. Yet right now, Australia has what looks like an incredibly competitive and dynamic grocery sector pushing prices down, attracting new entrants, and obviously benefiting customers.
The idea that the Abbott Government wants to unleash the competition regulator onto this unambiguously competitive market is absurd.
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