Farmers call for inquiry into red meat sector

FARMERS in New South Wales and Victoria today called for a Senate inquiry into increasing market consolidation taking place in the Australian red-meat processing sector.

The call followed crisis talks between two of the country's most influential state farming bodies - the NSW Farmers Association and the Victorian Farmers Federation - which are concerned to ensure the long term viability of the meat processing sector.

NSW Farmers and VFF believe a Senate inquiry would give farmers on the east coast an opportunity to give evidence without fear of reprisal from processors.

Both organisations and their members are extremely concerned following actions taken by processors to boycott the Barnawartha saleyards last week, which highlighted the increasing market power of red meat processors.

The saleyard boycott followed the recent decision by the Australian Competition and Consumer Commission to allow further concentration in the red meat processing sector with the acquisition of Australian Consolidated Food Investments Pty Ltd (Primo) by JBS USA Holdings Inc (JBS).

NSW Farmers Cattle Committee Chair Derek Schoen said: "The actions taken at the saleyards is the sort of behaviour that has renewed our concern about the ACCC's recent decision on JBS."

"It is also a demonstration that a reduction in competition means farmers lose - that is the bottom line.

"Our farmers' ability to get a fair price for the produce is dependent upon competitive tension in the market place. This acquisition of Primo by JBS will diminish competition and it will be incredibly difficult for any new entrants to enter the market.

"The best way to move forward is for the government to hold a Senate inquiry into the whole issue of consolidation in the red meat processing sector to enable the issue of competition in the market to be explored properly," Mr Schoen said.

VFF Livestock President Ian Feldtmann said there had been enormous farmer concern over the processors' boycott of the Barnawartha market, which prompted the VFF to call on the ACCC to take action.

"The reality is the boycott is just a symptom of processors gaining too much market muscle and the issue of processors' market power needs to be taken further," Mr Feldtmann said.

"That's why the VFF has joined NSW Farmers to call for a Senate inquiry.

"We need to explore why retail red meat prices have soared, but we've not seen a corresponding rise in saleyard prices," Mr Feldmann concluded.

ABARES data revealed the retail price for beef has risen from $10 a kilogram in the year 2000 to $16 a kilogram in 2012 while saleyard prices had stagnated at around $3 a kilo over the same period.

Farmers from NSW and Victoria will gather at Barnawartha Hall on Monday (2 March) to discuss the meat processors' boycott, the need for ACCC action and what's needed from the Federal Government.

Topics:  farmers inquiry red meat

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