FARM INSTITUTE INSIGHTS

Vol. 17 | No. 3 | August/September 2020


Competitive tensions: Markets are the key to growth and prosperity – except when they don’t work

Articles about competition policy often tend to open with a statement along the lines of: Competition is central to the operation of markets, and fosters innovation, productivity and growth, all of which create wealth and reduce poverty. Inevitably however, and even though that statement is definitive, it will be followed by a qualifier: but markets do not always work well. 

Markets not working well provide an endless source of agricultural policy discussion. Not surprisingly, complaints of market failure, of imbalance of power and monopolistic (or monopsonistic) behaviour, are enticing and full of passion. They usually involve the classic David and Goliath battle of the small business failing because of competition from larger competitors, of big companies using their market power to dictate prices to suppliers, and of whole industries declining because of a flood of cheap imports or sustained low prices. The villain is usually obvious and easy to target. (more)

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IN MY VIEW

Mick Keogh, ACCC, and Terry Richardson, Australian Dairy Farmers (ADF), provide their views on levelling the dairy field. They discuss the inevitability of dairy industry consolidation; the necessity of a mandatory code of conduct for the dairy industry; and dairy market lessons for the rest of Australian agriculture. (more)

HINDSIGHT

Retailers may ‘sell’ the idea of farming as a bucolic lifestyle but in reality agriculture is a competitive, market-driven business. While Australian agriculture is primarily export-focused, the domestic food market is characterised by the dominance of the major retailers and increasing consolidation in processing sectors. (more)

AFI STAFF PICKS

In this chaotic year of changed routines, many of us have found ourselves with more time than usual to catch up on those books, long-form articles, podcasts and documentaries which we’d earmarked to watch ‘one day’. In this edition we’re starting a new feature in which we recommend some of the gems which have caught our eye, sparked the imagination or challenged our thinking. (more)

AFI UPDATE

In keeping with the prevailing 2020 theme of adaptation, the AFI is making changes in coming months. The most visible change will be the launch of our new website, which will be much more user-friendly and provide a better repository for our extensive range of agricultural policy publications than the existing site. We are also changing the way people access AFI information to better reflect the value of our work and to offer easier channels of support for the Institute. (more)