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Is your cheap food worth it?

By Rowan (a small farmer in Victoria)

Have you noticed how the supermarkets have changed their policies on misshapen fruits after the ABC series of The War on Waste? No? Well neither have I.

Farmers still have a huge waste problem because the supermarket buyers decide that produce has to be a certain weight, shape or colour and everything else is rejected. As a farmer up to 60% of your crop can be rejected even if it is perfectly good to eat. That is a huge cost as the farmer still has to pay the planting and ‘picking’ staff, as well as the cost of fertiliser, water, etc. The banks are not very forgiving if you can’t pay your mortgage on time.

Supermarket executives knew that the outrage would only be short-lived, so it was easy for them to sit on their hands and wait it out. They are good at judging public behaviour: they spend millions on research.

They also know that no matter how badly they treat their suppliers, the public and government will never hold them to account. We cringe at the consequences but we all love our cheap food so try not to think about it.

I wonder if anything would change if the public knew some of the practices supermarkets employ in order to offer those products on the shelves that are often made below the cost of production, and why people are too afraid to speak out. There are no whistleblowers within the ranks of supermarket suppliers simply because no government will protect whistleblowers in this area because cheap food means low inflation, and that is all that it cares about. Nothing comes of enquiries because no one dares speak out, and governments won’t act on recommendations anyway.

I wonder how consumers will feel if they knew that up to 40% of supermarket revenue comes from ‘extortion’? This is what I call the practice of emailing farmers and manufacturers ‘asking’ for donations of thousands – even hundreds of thousands in the case of big manufacturers – to go towards their profits, or marketing costs (yes, they are that overt). Of course, they don’t ‘force’ anyone to pay, they just ask. Suppliers know that if they don’t pay up they will immediately delisted and have nowhere to sell their products.

Do you think it is fair for a supermarket to email a farmer just before they harvest their broccoli crop that since they are having a half-price sale on broccoli that week they are only going to pay the farmer half of the agreed price? Of course the farmer has a perishable crop and nowhere else they can sell it at short notice so they have no choice but to accept it. If they even hint of complaining they will find themselves delisted – and when you have hundreds of thousands of dollars in harvesting and packing machinery that is custom designed and made for your farm and product, as well as being in debt up to your eyeballs, you can’t afford any risk of delisting.

Every time you see a product on special at a supermarket, you can bet that it is not them taking a cut: they have stiffed their supplier. Whether it is baby food, capsicums, or soap, everything you buy has a higher price than you know.

The margins are so low already that losing a crop like that a couple of times can send a farmer to the wall, but even if the farmer next door buys them out in an effort to get bigger and try to keep one step ahead, they are also subject to the same practices, but now that they are bigger, the amounts ‘asked’ for also get bigger. Australian farmers are getting more efficient all the time but they just can’t keep up. It is a no-win situation.

It is common practice. I doubt that there is any farmer or food manufacturer who misses out on these predatory practices and extortion.

You might worry about the big manufacturers who damage farmers livelihoods and even whole third world country industries in the quest for cheaper and cheaper food and other goods, but they are just as afraid of the supermarket buyers, and the threat of delisting – supermarkets can always find another cheaper supplier, and don’t care that slave or child labour might be involved, or how many people it hurts, all in the name of more money to their shareholders.

Luckily my farm does not supply directly to supermarkets but I do supply some services to farms that do so I am involved in the whispered complaints that farmers make to each other around the table. As consumers we should all look at how much we are willing to ignore and if it is worth the price of cheap food.

An excellent book to read on the nasty practices of supermarkets is ‘Not on the Label, What really goes into the food on your plate’ by Felicity Lawrence. She puts into words what I would love to have the words to be able to tell everyone who cares about their food and where it comes from.


14 comments

  1. Jack Russell

    Yes, I’m aware, and now try to grow as much as possible myself. I’d still buy at local farmer’s markets if I could but cannot really afford to, having done my sums and come up short. So, now my backyard is crammed with fruit, veg, herbs, bees, and birds, and I love it so much I wish I’d started decades ago.

    I know that doesn’t solve the issue for the farmers – we need decent and determined government for that.

  2. johno

    Thanks Rowan, we buy mainly organic/biodynamic produce so have always paid more. More and more of this type of produce is in supermarkets now, and I wonder, is it the same rip off deal with these growers as well. My partner has recently started buying from Aldi which is popping up all over our region. Like Jack Russell we grow food as well and would like to increase our home production.

  3. Terry2

    This year’s mango season in the Far North of Queensland has delivered a bumper crop much of which has gone to hungry Asian markets but any blemished or sap-stained fruit has been sold off locally (in far North Qld) at very reasonable prices barely covering harvest costs but presumably export prices on the choice fruit balance things out.

    I am also assuming that sap-stained fruit has gone to Australian canneries and juicemakers.

    Even the quality fruit in the main supermarkets has been selling at $2 per mango which is not bad when you allow for harvesting and freight costs.

    Inevitably the grower can be forced into the position of a price taker unless growers and their co-operatives enter into fixed price contracts in advance.

    Any waste or dumping of fresh produce based purely on appearance is unacceptable.

  4. Chris

    We all understand a monopoly, but monopsonists are able to get away with this sort of unethical behaviour because we let them. Let me repeat that. We let them do it.

    We (through our democratically (barf) elected governments) licence these corporations to trade and offer a convenient place to buy our food a durables.

    Yet when they force our farmers to the wall and undercut labour costs (and use robots to replace jobs that Aussies used to do), we just shrug and head off to the scan yourself isles with our piles of cheap food.

    Fixing this would take a very determined and ethical government. But don’t hold your breath, as these corporations donate (cough, bribe) widely and expect something in return. When did you last donate some of your hard earned and expect something. As long as the donation is put on the register, our political parties (and the individuals at the top of the shit heap) can spend it how they like and some become far more wealthy than their already generous salaries could ever achieve.

    How about someone forces Woolies and Coles to sell off half their stores so that competition allows some of the farmers and collectives to become price makers? It’s when you face only one or two powerful buyers that allows this to happen.

    The rub for us Aussies is worse, as the farmers who want to hire Aussies for a decent wage simply cannot do this. They are price takers and that floor keeps getting lower and lower with the end game being as low as we could import the stuff.

    Truly family blogged we are. No solutions

  5. Charles

    Small farmers are an endangered species, they’re initially given favorable treatment which encourages an expansion of their business. A few years down the track the Duopoly plays one seller off against another. Saddled with unsustainable debts many small farmers fold. Destroying small farmers one farm at a time – the Duopoly.

  6. babyjewels10

    I noticed Aldi sometimes have enormous bananas. We always buy them because there are no kids in our house and we love a good feed!

  7. TC

    i wonder if IGA is included in the Big Supermarket group? we always try to shop there or at local market on weekends. Their fruit and veg often less than perfect looking and they don’t always have the full selection but we know that’s because they have what’s available seasonally.
    Aldi are an enormous German owned multi-national corporation. They are making the problem worse by pushing down the prices. Aldi is not a small independent local supermarket. Please do not think they are a good alternative to Woolies and Coles.

  8. Phil

    I feel for the honest farmers and I detest the way the market system exploits them. Mind you, many a farmer is also a labour exploiter too. But that does not diminish in any way the legitimacy of the writers case.

    The supermarkets are simply applying the capitalist ethos – whatever it takes for market dominance and shareholder gain. There is no hope for change under any conservative government, and only a glimmer of hope under a progressive administration because no matter what the politics, capitalism is the only economic system in town.

    The ALP is at a 2018 crossroad – it must decide if it is going to take the road less travelled ie the progressive road and divorce us from neoliberalism eg by regulating markets, nationalising critical assets, promoting producer and worker cooperatives, reinvent and reinvigorate enterprise unionism etc etc, or it can be LNP lite ie neoliberal with a smiley face – which equates with more inequality, cheap food, and a divided, fractured and sullen society.

  9. Sue

    Clock up a win for the little guy Rowan, good to hear you not falling prey to the market manipulators, sleep walkers that they are.

  10. wam

    I would love to be able to say I am a responsible shopper but I am limited to Australian grown fruit and vegetables and never buy colworths brand or local and overseas mix.
    (I was told colworths land italian tin foods for 7 cents a can?)
    The practise of destroy the competition and apply the tactics of extortion is the new method.
    Labour hire, travel, accommodation companies have placed themselves between us and the business like retailers who prevent access to the producer. Any hotel who offers the same price runs the risk of being delisted.
    Until the net armageddon it can but get worse

  11. tanginitoo

    Personally I wish all fruit (in particular) and vegetables were considerably smaller! I am diabetic and am not allowed to eat such huge apples, nectarines etc. all at once, so I simply cannot buy them. I am sure it is the same for mothers with small children. My favourite apple is Pink Lady, but they are much too big for me so I can never get to eat one. If they do happen to have smaller ones they are sold in plastic wrapped quantities, again, too many for a lone person!

  12. Jack Russell

    I can remember, as a teenager, my Mum working as secretary on a committee for a small new group called the Small Business something-or-other way back in 1965 to try and fight back against supermarkets, which weren’t all that common then.

    Futile, but they really tried, knowing what was coming . . .

  13. ozibody

    The pic at the head of this article tells the story. A strong feature of marketing is Presentation, and in this instance Uniformity of product plays a leading role … both in setting up, and maintenance time $$ ! ….. ” presentation ” wins hands down here $$$ !

    Looked at in this light, it’s easy to understand that the Supermarkets lead in the setting of size and shape standards !! … consumers are simply bystanders in this parade ! … ( as we generally are in so much of life today ! … another story.).

    My local green grocery closed down many years ago, and I’ve since been an ardent supporter of Farmers Markets …. ‘ Local ‘ is (in more ways than one ) our sustainable future.

    I watched ABC’s ” The War on Waste ” (again) last night … thank you for your writing Rowan … I wish you well..

  14. Letitia McQuade

    I am not a fan of BIG fruit and veg. I am always trying to find small bananas (not lady fingers that are too sweet and not to my taste), small apples, small zucchinis, small carrots etc. Don’t like these huge sized fruits and veg, they don’t taste of anything… I wish there was more access to a variety of sizes. As for supermarket practices, this is vulture capitalism in action. No one is surprised by this anymore, but anyone of conscience is totally flummoxed when it comes to finding an answer… What can we do? How to get to somewhere equitable and fair from where we are now??? I spend a lot of time thinking about this. Highlighting the problems is only a small first step. We need to think outside the box.., we need an idea of what an ideal might look like, and a road map of steps needed to move us in that direction… And whatever we come up with it must take both the positive and negative aspects of human nature into account… I have some ideas, but it’s a monumental task, and perhaps the work of several generations..

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