Green Paper: Can cooperatives boost farm-gate returns?

James Nason, 21/10/2014

The use of more cooperatives and collaborative partnerships between producers has been identified as a potential strategy to improve farm gate returns in the Federal Government’s Green Paper for Agricultural competitiveness released yesterday.

While much of the initial attention on the Green Paper has focused on planned infrastructure developments, the paper also offers a range of insights into the type of policies the Federal Government believes are needed to improve  farm-gate returns in future.

For example, in response to feedback from stakeholders in the 700 submissions received, the paper says the Australian Government will consider what it can do to foster more cooperatives in the agriculture sector to develop.

The paper says farmers can use formal business structures such as cooperatives to increase their bargaining power, to achieve greater economies of scale and improve profitability without necessarily losing control over their individual business operation.

“Some stakeholders felt that the Government could do more to promote and recognise the role that cooperatives play,” the paper says.

“Canada, for example, has an area within its national government that provides a single focal point for cooperatives analysis, advice and support to promote cooperative business innovation and growth as well as incorporation.”

The report noted that State and Territory Governments have agreed to replace an ageing and fragmentedlegislative system governing cooperatives with a new Cooperatives National Law (CNL) which will improve coordination between farm businesses through the establishment of cooperatives.

The new CNL allows cooperatives to operate on a national basis, reduces compliance costs and provides better access to external capital funding through ‘cooperative capital securities’, which allow access to external capital without compromising member democratic control.

“The Australian Government will consider what it can do to foster more cooperatives in the agriculture sector to develop, noting that regulati on of cooperatives is in the jurisdiction of the States,” the paper says.

The document also devotes considerable attention to the area of competition policy and measures that may improve transparency in the supply chain and prevent misuse of market power to the detriment of producers.

Stakeholders criticised current provisions of the Competition and Consumer Act as ‘inadequate’, stating that it was not designed to address power imbalances between participants at different points in the supply chain.

A large part of the document also focuses on possible future policy measures to improve access to capital for producers and to encourage more investment in agriculture including the removal of some restrictions on Farm Management Deposits, the introduction of permanent concessional loans, and tax concessions, zone tax-offsets and relaxation of superannuation laws in relation to agricultural investments.

Farm groups welcome Green Paper

The National Farmers Federation yesterday welcomed the green paper, and praised the efforts of agriculture minister Barnaby Joyce in guiding its development to date.

“We are lucky to have an Agriculture Minister with such a passion for the agriculture sector. The Minister has clearly been instrumental in guiding the development of a strong vision for farmers and the broader agribusiness chain,” NFF President Brent Finlay said.

Mr Finlay said the Green Paper built on many of the NFF policy priorities, including rebalancing competition policy, support for drought-affected farmers, greater access to labour, reform of coastal shipping and removing unnecessary regulation in work health and safety laws.

“The commitment to further explore water infrastructure opportunities around Australia is an important acknowledgement that infrastructure investment, including in water, must continue to grow to promote increased capacity and development in Australia’s rural and regional areas,” Mr Finlay said.

Mr Finlay said that above all, policy solutions for agriculture must create a platform for greater profitability and competitiveness.

“Of course, great policy ideas will only deliver tangible results with proper resourcing. A key part of the Government’s work between now and the release of the White Paper is to commit to funding sector-based initiatives so that we can turn ideas into action,” Mr Finlay said.

AgForce General President, Ian Burnett, said the Green Paper provided insight into the Government’s thinking on the key measures required to promote industry prosperity and asks stakeholders to ‘pick and choose’ those which must be implemented as a priority.

AgForce’s submission to the Paper focus on the urgent need to secure sustainable growth in on-farm profitability as a key to unlocking competitiveness.

“It is heartening to see this as the number one policy principle identified in the document,” Mr Burnett said.

The Green paper also addresses a number of other key priorities for AgForce including developing a comprehensive drought policy, increasing innovation and its adoption, improved access to finance, reliable and efficient transport and communication infrastructure, transparent and competitive supply and value chains, robust biosecurity and a streamlining of unnecessary regulation, particularly relating to environmental management and workplace safety.

The full Green Paper can be found here.




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  1. Grant Piper, 21/10/2014

    We had farmer cooperatives long established to provide certainty to farmers – Wheat Board, Wool Board, Dairy Farmers Coop et al. All were torn down and destroyed by Governments at the behest of ‘free marketeers’ and multinationals. What hope we can rebuild them in the extreme economic climate of today?

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