NSW Farmers will play a key role in developing a new code of conduct to deliver price transparency and fair contracts in the poultry meat market.
NSW Farmers Poultry Committee Chair Peter Wojcicki said growers had been calling for a code of conduct, because processors and supermarkets continued to dominate the supply chain and in turn family farmers were missing out on the "fair go" Australia prided itself on. The lack of competition in the processor sector meant growers had limited bargaining power against the processors with many family farmers being forced from the industry.
"The poultry meat processing space in Australia is alarmingly concentrated, with just two companies responsible for processing 70 per cent of the nation's chicken," Mr Wojcicki said.
"Consumers might not be aware of the situation because of the number of brands on the market, but many of them are actually owned by the same company.
"With so little competition in the processing space, these big companies are basically able to offer contracts on a take it or leave it basis."
Mr Wojcicki said poultry meat growers needed stronger protections through a code of conduct to make the industry more sustainable and beneficial for all participants.
"Australian poultry meat growers are highly exposed to risk. They need to make huge infrastructure investments to raise birds they do not actually own, and the contracts offer little security." Mr Wojcicki said.
"We've heard stories from growers forced from the industry burdened with huge debt, and for those left growing, lack of choice means growers have little choice but to sign one-sided contracts."
"Sadly, this is an industry where there are geographic constraints and so few processors that farmers are at their mercy."
The Australian Competition and Consumer Commission identified the potential for unfair contract terms in its 2020 inquiry into perishable agricultural goods, which was a watershed inquiry for agriculture and confirmed the likelihood of power imbalances in fresh food supply chains.
"More needs to be done to protect poultry meat farmers, whose hard work is enjoyed by millions of Australians every week," Mr Wojcicki said.
"It's essential we implement an effective code governing poultry meat growers and processors so that everyone gets a fair go."
Funding to develop the code of conduct was granted by the federal government to the National Farmers Federation, with NSW Farmers taking the lead in engaging with growers, processors, supermarkets and retailers. The Victorian Farmers Federation and Australian Chicken Growers Council will work in conjunction with these efforts to deliver a national framework for the sector.
