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The development of a White Paper on competitiveness in the agricultural sector follows an election commitment. I was released in July 2015. View White Paper.
The Prime Minister and the Minister for Agriculture are responsible for overseeing the development of the White Paper
- Hon Tony Abbott MP (Prime Minister )
- Hon Barnaby Joyce MP (Minister for Agriculture)
The terms of reference were released on 9 December 2013
Terms of Reference
A vibrant, innovative and competitive agriculture sector will lead to better returns to farmers, more jobs, more investment and stronger regional communities. Australia is a leading agricultural producer and exporter, and the sector has considerable opportunities for future growth. As a nation we must encourage a strong agricultural sector, with primary producers that remain among the most innovative in the world.
An important role for Government is to set stable, long-term policies to improve productivity and growth. The White Paper on Australia’s Agricultural Competitiveness (the White Paper) will outline a clear strategy to improve the competitiveness and profitability of the agriculture sector, boosting its contribution to trade and economic growth, and building capacity to drive greater productivity through innovation. By setting a solid foundation to promote investment and jobs growth in the agriculture sector, the White Paper will also help ensure agriculture remains a significant contributor to the Australian economy and regional communities.
Considerations and scope
The White Paper will consider:
- food security in Australia and the world through the creation of a stronger and more competitive agriculture sector;
- means of improving market returns at the farm gate, including through better drought management;
- access to investment finance, farm debt levels and debt sustainability;
- the competitiveness of the Australian agriculture sector and its relationship to food and fibre processing and related value chains, including achieving fair returns;
- the contribution of agriculture to regional centres and communities, including ways to boost investment and jobs growth in the sector and associated regional areas;
- the efficiency and competitiveness of inputs to the agriculture value chain - such as skills, training, education and human capital; research and development; and critical infrastructure;
- the effectiveness of regulations affecting the agriculture sector, including the extent to which regulations promote or retard competition, investment and private sector-led growth;
- opportunities for enhancing agricultural exports and new market access;
- and the effectiveness and economic benefits of existing incentives for investment and jobs creation in the agriculture sector.
The White Paper will not consider industry competitiveness issues associated with the fisheries and forestry sectors and nor will it cover human nutritional health issues.
The White Paper is proposed for release towards the end of 2014. It will complement related initiatives, including the Action Plan to Boost Productivity and Reduce Regulation, the White Paper on Developing Northern Australia and the new Energy White Paper.
The White Paper will be developed in the context of the findings of the Commission of Audit, the constrained fiscal circumstances and the Government’s commitment to return the Budget to surplus.
The Prime Minister and the Minister for Agriculture will oversee the development of the White Paper, with responsibility for day-to-day management of the process resting with the Minister for Agriculture in consultation with relevant Ministers.
A cross-agency taskforce within the Department of the Prime Minister and Cabinet (PM&C) will develop the White Paper. It is overseen by an inter-agency committee co-chaired by Deputy Secretaries from PM&C and the Department of Agriculture. This committee will ensure the broad range of policies that affect the agriculture sector are included in the process to produce a comprehensive plan for the sector.
The White Paper will be developed with extensive consultation with business, non-government experts and the community. The industry advisory council for the agriculture sector, chaired by the Minister for Agriculture and a respected industry leader, will play a key part in providing advice to assist the development of the White Paper.
Policy idea 7 - Improving market competition: The Government aims to facilitate and support a regulatory environment that allows agricultural markets to operate efficiently and transparently to support competition. Many stakeholders argued that there was a lack of transparency and certainty in the price of agricultural products and that this had led to difficulties in planning or investing. Stakeholders also argued that producers had been unfairly dealt with by other players in the supply chain. Stakeholders suggested that the Government:
a) introduce options to increase price transparency throughout the domestic supply chain;
b) introduce new marketing mechanisms that might restore balance of power to the producer; and
c) facilitate greater use of cooperative structures. [page xxi-xxii]
Policy idea 8 - Strengthening competition laws: The Government is committed to ensuring that competition laws in Australia provide a sound basis for ensuring firms act in a competitive manner. Current competition laws generally seek to prevent the misuse of market power and allow for collective bargaining (including by farmers) in certain circumstances, to negotiate better deals. The Government’s Competition Policy Review is examining these issues and the Review Panel released its draft report on 22 September 2014.
Stakeholders consulted as part of the Agricultural Competitiveness White Paper suggested improvements to competition laws, such as making it easier to prove that market participants had misused market power (strengthening s46). They also raised other issues including divestiture, exclusive dealing (s47), powers to obtain information, documents and evidence (s155), the unconscionable conduct provisions of the Competition and Consumer Act (CCA), and whether there are barriers to the emergence of major Australian agribusiness companies (‘national champions’) of global scale for exporting to international markets. Specific changes suggested include:
a. revisions to the CCA to make it easier to prove breaches of market power provisions; introduce a flexible anti‐competitive ‘effects test’ in the misuse of power provisions; and increase penalties for breach of the CCA including a general divestiture power enabling courts to break up a business that repeatedly breaches the CCA;
b. reviewing competition laws to consider whether there are any barriers to greater consolidation among agribusiness firms;
c. increasing the resources of the ACCC, including specialist agribusiness knowledge, and requiring the ACCC to publish more information on investigations and their outcomes; and
d. creation of a supermarket ombudsman with penalty powers and a mandatory code of conduct for supermarkets (across all commodities) backed by direct financial penalties.
The Government will consider views on these issues in the context of responding to the Competition Policy Review.
These 'policy ideas' are expanded in Part 4 (beginning page 24) with specific detail from page 30. This included the following (pages 30-31)
Policy idea 8 - Strengthening competition laws
The Government is committed to ensuring that competition laws in Australia provide a sound basis for ensuring firms act in a competitive manner. Current competition laws generally seek to prevent the misuse of market power and allow for collective bargaining (including by farmers) in certain circumstances, to negotiate better deals. The Competition Policy Review, conducted by an independent panel chaired by Professor Ian Harper, is examining these issues and the panel released its draft report on 22 September 2014.
Stakeholders are encouraged to also comment on the findings of this report. Stakeholders consulted as part of the Agricultural Competitiveness White Paper suggested improvements to competition laws such as making it easier to prove that market participants had misused market power (s46). They also raised issues including divestiture, exclusive dealing (s47), powers to obtain information, documents and evidence (s155) and the unconscionable conduct provisions of the Competition and Consumer Act 2010 (CCA), and whether there are barriers to the emergence of major Australian agribusiness companies (‘national champions’) of global scale for exporting to international markets. Specific changes suggested include:
a. Revisions to the CCA - Stakeholders suggested changes to the CCA to:
i. make it easier to prove breaches of market power provisions such as by applying the ‘substantial market share’ threshold in the Birdsville Amendment to section 46(1) of the CCA (the general misuse of market power provision);
ii. introduce a flexible anti‐competitive ‘effects test’ in the misuse of power provisions; and
iii. increase penalties for breach of the CCA including a general divestiture power enabling courts to break up a business that repeatedly breaches the CCA, such as the provisions in the United States (Sherman Act 1890) and United Kingdom (Enterprise Act 2002) for breaches of their respective misuse of market power provisions.
b. Reviewing competition laws to consider whether there are any barriers to greater consolidation among agribusiness firms - Consolidation could encourage emergence of major Australian agribusiness companies of global scale in agriculture sectors of traditional strength (such as meat, dairy, grains, wool, oilseeds and sugar). One area for consideration may be the approach used by the ACCC in determining the size of the market under consideration—noting that the Australian economy is open to competition from abroad (including through online markets). In a report commissioned by the Business Council of Australia, McKinsey says ‘New Zealand’s dairy exports [and milk production] have accelerated; Australia’s have flatlined’ (McKinsey 2014). McKinsey recommended that Australia consider emulating New Zealand’s decisions in relation to Fonterra. A recent inquiry by the Productivity Commission noted that there are a range of factors in addition to competition policy, like the natural resource environment and trade agreements, that have affected Fonterra’s success (PC 2014a).
c. Increasing the resources of the ACCC - Additional resources could include specialist agribusiness knowledge or creating an agricultural ACCC to focus on sector‐based issues and requiring the ACCC to publish more information on investigations and their outcomes, noting that some stakeholders made contrary suggestions such as the need for a robust anonymous complaint process to bring out more evidence than the current system does.
d. Creating a supermarket ombudsman with penalty powers and a mandatory code of conduct for supermarkets (across all commodities) backed by direct financial penalties.
The scope of the current Competition Policy Review includes many of these issues. The Government is interested in feedback on these suggestions and stakeholders are encouraged to also provide submissions to this review directly. The Government will consider all these views in the context of responding to the Competition Policy Review.
Submissions on the issues paper closed on 17 April 2014
Almost 700 public submissions were received - they may be viewed here
Submissions on the Green Paper were due by 12 December 2014
On the White Paper
- David Uren, 'Cause for alarm in rural relief' (The Australian, 9 July 2015)
- Chris Berg, 'Why is the agriculture white paper gunning for supermarkets?' (The Drum, 7 July 2015)
- Anna Vidot, 'Federal Government unveils long-awaited plan for Australian agriculture' (ABC Rural, 6 July 2015)
- Bernard Keane, 'Agriculture white paper pursues Nationals fantasies, not competition' (Crikey, 6 July 2015)
- John Durie, 'ACCC should focus on the entire economy, not just farms' (The Australian, 5 July 2015)
(Also published as 'Watchdog should focus on the entire economy' (The Australian, 6 July 2015, page 19)
- 'Farmers welcome proposed ACCC appointment' (Sky News, 4 July 2015)
- John Kerin and John Kehoe, 'Farmers get $1.2b boost in agriculture white paper' (AFR, 4 July 2015)
See, for example:
- Andrew Green, 'Barnaby Joyce defends 'crackpot' white paper, fights for more agriculture money' (ABC News, 29 March 2015)
- Colin Bettles, 'White Paper timing worries NFF' (Stock and Land, 27 March 2015)
- Colin Bettles, 'White Paper within two months: Joyce' (The Land, 13 February 2015)
- Durie, 'Bruce Billson seeks to soothe supermarkets' concerns over agriculture green paper' (The Australian 23 October 2014)
- Fluer Anderson, 'Producers in Power Push' (The Australian Financial Review, 20 October 2014, page 5)
- Fluer Anderson and Katie Walsh, 'Cold shoulder for carve-ups' (The Australian Financial Review, 22 October 2014, p 11)
- Editorial, 'Open economy is good for the farm' (Australian Financial Review, 21 October 2014, p 58)
- Lexi Metherell, 'Agriculture green paper to spark debate over water, competition' (ABC Radio, The World Today, 20 October 2014)
- Joe Kelly, 'Green paper canvasses court orders to break up businesses' (Dynamic Business, 20 October 2014).