After losing confidence in a voluntary code of conduct, the National Farmers' Federation is calling for the introduction of a compulsory code to prevent supermarkets misusing their market power.
The National Farmers' Federation (NFF) president, Jock Laurie, said the NFF had worked with the major retailers and the Australian Food and Grocery Council (AFGC) in good faith to develop a voluntary code, but had lost confidence that it will do enough to protect farmers’ interests.
"Australia has an extremely concentrated supermarket retail sector, which risks an abuse of power by the supermarkets over their suppliers. The primary purpose of a code, either voluntary or mandatory, is to ensure the retailers do not misuse their market power," he said.
"As such, our position has always been to support a mandatory code and longer-term changes to competition and consumer law, but to first see if the same outcomes can be achieved on a voluntary basis, and we have been working towards this with both retailers and the AFGC.
"After some months of discussion, we lack confidence that the voluntary code can deliver the strong outcomes that farmers expect – which is why we are calling on the federal government to work with us to deliver a sensible mandatory code."
The NFF suggests the code could consider measures to safeguard against a misuse of power; address concerns around contract negotiations between retailers and suppliers; provide an avenue for dispute resolution including a confidential complaint process and an independent dispute resolution mechanism through an ombudsman or commissioner.
"And it must be done in a way that does not add unnecessary costs into the agricultural supply chain. Farmers are price takers, so it is essential that any additional costs are not passed on to farmers," added Laurie.
He said farmers would only support the code if it had "real teeth" and comprise appropriate penalties for breaches.