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Collective bargaining class exemption for agriculture
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OVER the past 30 years there has been an enor- mous degree of change to the environment farmers and the broad- er agribusiness sector operate in, which has made running a farming enterprise much more complex.
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In some agricultural industries, the trend of greater consolidation in pre- and post-farmgate markets has negated some of the benefits ex- pected from the compe- tition reforms that have occurred over this period.
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better terms with infra- structure and service pro- viders (such as electricity pricing and the ability to export surplus on-farm energy generation), input suppliers (feed, energy), machinery suppliers and product purchasers (pro- cessors, mills, retailers).
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The result is that while it has delivered lower prices for consumers, it has also challenged the profitability and competi- tiveness for some farm businesses.
Several QFF mem- bers have collective bar- gaining authorisations in place, including the Queensland Chicken Growers’ Association.
Effectively structured, a class exemption could
In some industries, power imbalances mean getting a ‘fair price’ for agricultural products at the farmgate is becoming increasingly challenging.
In the short term, there is likely to be limited benefit from the intro- duction of a class exemp- tion for them.
This is evidenced by increased calls for indus- try codes of conduct to overcome unfair contract terms and unconscion- able conduct.
However, over the long- er term, they may benefit from a streamlined ap- plication process in the future.
As such, policies that improve competition in concentrated markets are needed.
If effective, a class ex- emption may also reduce the need for small mem- ber-based organisations to pursue a collective bargaining authorisation.
Australian consumer laws have an important role to play to ensure market power and ma- nipulation does not add to the profitability and com- petitiveness challenges some farm businesses currently face.
Potential impacts to existing authorisation ar- rangements should also be explored.
The ACCC appears to have acknowledged this imbalance within the agriculture sector and is considering mak- ing a ‘class exemption’ that would provide eli- gible small businesses, agribusinesses and fran- chisees legal protection to collectively bargain with customers or sup- pliers, without having to apply to the ACCC.
For example, while QC- GA holds an authorisation to collectively bargain on behalf of Queensland chicken growers with the state’s three processors, the processors are not re- quired to solely negotiate with QCGA.
This ruling would pro- vide businesses an ex- emption from consumer law for conduct that would otherwise risk breaching it, effectively providing them a ‘safe harbour’.
This undermines the strength of a united ne- gotiation position and re- duces the effectiveness of the collective bargaining authorisation.
This new power would
Besides looking at ways to rectify this situation, which should include the addition of an effective and cost-efficient media-
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National Poultry Newspaper, October 2018 – Page 3
be in addition to the AC- CC’s existing ‘authorisa- tion’ and ‘notification’ processes.
tion process, the ACCC should ensure a class exemption does not em- bolden this approach.
A full exploration of the settings, boundaries and transparency is first required to ensure there aren’t any unintended consequences or perverse outcomes from the fur- ther development of this class of conduct.
In the past, processors have exploited their mar- ket power in these cir- cumstances by negotiat- ing separate agreements with individual farm businesses when contract negotiations become dif- ficult.