Parliamentary Committees

Economic and Finance Committee: From the Paddock to the Plate: A Fair Return for Producers

Mr ODENWALDER (Little Para) (11:02): I move:

That the 97^th report of the committee, entitled 'From the paddock to the plate: a fair return for producers', be noted.

In November 2016, the Economic and Finance Committee resolved to investigate whether our primary producers were supplying competitively to retailers. Through this inquiry, the committee received 17 submissions and heard evidence from 36 witnesses across seven hearings. One of these hearings was also held in the Barossa Council chambers—indeed, I am surprised you were not there, Mr Speaker.

Mr Pederick interjecting:

Mr ODENWALDER: A rare day off. In addition to this, representatives from the committee attended two conferences pertinent to the inquiry. The first was the 2017 Farming Together National Forum, and the second was the Supermarket Power Symposium organised by the University of Melbourne Law School. The aim of this inquiry was to consider and report on the economic development of our producers across South Australia's agriculture, horticulture and viticulture sectors.

Because of the vital role these sectors play in the state's economic and social development, the committee used a unique two-limbed approach to carry out its investigations. This approach gave stakeholders the chance to steer the committee towards inquiring into specific and topical areas of interest. The committee then tabled an issues paper which identified five key issues for the inquiry. The second stage of this inquiry involved gathering evidence from those directly involved from those directly affected in the associated industries.

Some key themes explored included barriers to preventing producers from entering large supply chains, inequitable bargaining power, production costs, and relevant federal codes of conduct and current grain supply chain issues. In considering these key issues, the committee has made a total of 13 recommendations. Some of these recommendations relate to government departments increasing and strengthening the promotion of services they currently offer to primary producers so that those producers are directly aware of the tools and resources available to them.

The committee also recommends that the functions of the Small Business Commissioner be expanded to include an advice unit. This unit is to offer primary producers the ability to seek confidential advice on offers of agreement as to whether the terms of agreement are fair. During the inquiry, the committee also heard about the important role the cooperative business model can have in addressing the imbalance of power that affects some primary producers and how it can help producers enter larger supply chains.

That said, the committee received evidence indicating that this important business model is underpromoted. The committee recommends that this issue be addressed by adding information to the 'Starting a business' section of the South Australian government website about the benefits of agricultural cooperatives. Furthermore, the committee also recommended that relevant government departments ensure that funding grants do not prejudice the cooperative business model.

This inquiry and its two-limbed approach provided a valuable opportunity for stakeholders to highlight their issues and concerns about the current structure and operation of our state's agricultural, horticultural and viticultural supply chains. It therefore facilitated an important dialogue amongst interested stakeholders, aggrieved parties and the committee. On behalf of the committee, I express my appreciation to all those interested parties who provided submissions and oral evidence. I particularly thank those stakeholders who travelled considerable distances to appear before the committee.

I would like first of all to thank the members of the Economic and Finance Committee, of course—the member for Wright, the member for Colton, the member for Davenport and the member for Hartley—and I want to make special mention of the members for Light and Schubert. The member for Light instigated this inquiry. It is an area of great passion for him and many of his constituents. In a sense, he drove this inquiry. He certainly instigated it. I make special mention of the member for Schubert, too, who ensured that this inquiry, unlike some others, was largely bipartisan and very well facilitated. It was a model inquiry in that sense.

The member for Schubert ensured that it was a very bipartisan approach. He also facilitated some of the site visits, and he and the member for Light both facilitated many of the stakeholders who appeared before us, making it an altogether valuable inquiry. I particularly want to thank the staff, since this is the last report of this committee, perhaps forever—who knows? Certainly, it is for this parliament. I want to thank the staff, particularly Lisa Baxter, the executive officer, for her tireless work, her excellent advice, her procedural advice, her advice in terms of organising inquiries, her advice and support generally and her support of the various research officers who come and go.

In this instance, I also want to thank the research officer, Peta Spyrou, who has gone on to bigger and better things, thankfully. As I have said in this place before, she contributed such an excellent report. She translated exactly what the committee wanted, under the guidance of Lisa Baxter, and provided us with what I have said in this place, and I will say it again, is probably the best report I have seen as a chair of any committee.

While I have plenty of time, I want to reflect briefly on the work of the committee, particularly on an inquiry I was particularly proud of, the labour hire inquiry. I am yet to check the Hansard, but I am led to believe that the other place passed some important legislation yesterday.

The Hon. S.W. Key: Yes, they did.

Mr ODENWALDER: They did—excellent. Two years ago, the Economic and Finance Committee embarked on an inquiry into the labour hire industry. The report has been tabled, and I am really pleased to say that that report, with plenty of input from the union movement and other interested parties, has resulted in some good legislative change in this state. Certainly, those members of the committee who agreed with the primary report hope that it eventually translates into a federal system that can finally put an end to some of the inequities in the labour hire industry. I want to make quick mention of that. With those few words, I commend the report to the house.

Mr PEDERICK (Hammond) (11:08): I rise to support the 97^th report of the Economic and Finance Committee, entitled 'From the paddock to the plate: a fair return for producers'. As a primary producer, even though I have had my property leased out for 13 years, I am very keen to see fair returns for primary producers like myself, who basically want a fair return for their toil, their sweat, sometimes their blood and sometimes their tears out in the field in whatever primary production setting they are in. Whether it is dryland agriculture, irrigated agriculture, horticulture, intensive animal keeping or animal breeding of any sense, farmers do a fantastic job in our state and country in bringing many billions of dollars annually into our economy. These are old numbers, but it is said that one in five people works in agriculture and I think it is probably more than that in the broader scheme of things.

It gets interesting, as time goes on, when we talk about fairness and equity to primary producers because we get the effects of some of the major supermarket chains trying to put downward pressure on what the primary producers get. It is not just primary producers, it is their suppliers, who may be the middle-tier suppliers between the primary producers and the end sale, and so that trickles right down to those people at the primary production end.

There has been a bit of media lately in relation to Laucke Foods and their CWA scone mix, which goes a long way in supporting the CWA and associated charities and an ongoing debate that Lauckes are having with the Woolworths supermarket chain in regard to getting a fair price for their product. Laucke's are a value-add company, and they have said, quite rightly, that the cost of production is far too high and one of the main costs is the high power prices. From what I understand, they were asking for just a 7 per cent change in the price they were getting, but Woolworths were denying this. The simple fact is, as Laucke's know, there is not much sense producing something at a loss. Mind you, that can happen quite often in the primary production sense. I note the reaction from the member for MacKillop.

Notwithstanding natural impacts like frost, drought, salinity issues and a whole range of issues that can impact primary producers and force them to run at a loss—and obviously that is not sustainable in the longer term—the resilience of primary producers and farmers shine through. If you are not resilient, you will not make it. Sure, occasionally you get a nice profit year, but too many times there can be those really tough years when you are not making money or not making much at all.

These days, there is the huge cost of inputs; for example, machinery on a dryland farming enterprise. You would be up for several million dollars if you wanted to buy all new machinery for your operation, with a harvester's list price heading towards $1 million, large tractors around $300,000 or so and large sprayers up to $400,000. Equipment is getting more and more expensive

Even in the animal industries, getting in stock right now is not simple and that is because there has been a bit of a resurgence in the price for sheep and cattle producers. That has been a good thing. Certainly with sheep, wool prices are at pretty good levels at the moment. From what producers are telling me, certainly with some of the input costs, including power and water to name a couple, were it not for the high prices they would not make it.

It is interesting when some of the people who run our abattoirs say that it is pretty tight. That is where you get this paddock-to-plate conundrum to a degree because abattoirs like Thomas Foods and JBS in MacKillop would be getting squeezed by people putting their produce on their supermarket shelves saying, 'No, we are only going to pay you so much.'

I can understand why the margin for the middle men, as far as abattoir owners are concerned, is not where they would like it to be. In fact, they have said the farmers are having a win. I said, 'That is good, but, as they have said from that level, we would like to take the bumps out.' I think farmers would like to see that as well. Certainly, that is not something you can do in an open market. I appreciate that, but it does create those market fluctuations where on one side of the argument the producer might be doing well, but the value-adder might not be doing as well.

This is where it gets down to the simple fact that supermarket chains and others really need to appreciate the value of primary production because it gets to the stage where you have these people who are doing this excellent value-add being told, 'We're only going to pay you so much.' They say, 'If you want the quality, we have to do this, or we have to do that.' With everything they have to comply with—whether it is taking a River Murray allocation or obviously being compliant with EPA legislation and production matters—it can be pretty tough. It can be pretty tight.

I would like to commend all our primary producers. Stick to it. Certainly, most of the dryland farmers are having a reasonable harvest. It is nowhere near the big one last year at about 10 million tonnes. It was a bit of an up and down year for a lot of people, and we note that there has been some really heavy rain lately. I know that over at the member for Flinders' area there have been some really big rains. Some people who do not know say, 'You must like the rain.' Well, not at this time of the year.

It destroys value in crops and not just value; it knocks the weight out of the grain so that you do not get the same weight per hectare you would have had before a large rain. It can certainly knock the value down by $70 a tonne easily at times. I have seen it myself when I was cropping. I know farmers at the moment are picking between the high moisture days and those warm days. They would have been going full tilt yesterday and also today getting as much harvest off as they can and into those receival areas. I commend the report and commend our state's primary producers.

The Hon. A. PICCOLO (Light) (11:17): I stand to speak in support of the motion to note the report. At the outset, I would like to thank the members of the committee. I would also like to thank the staff of the committee, who did a wonderful job in bringing the report together. I would also like to acknowledge my Labor caucus members, who supported the inquiry when I put the suggestion to them. The Labor caucus members supported me in having the inquiry.

I would also like to thank the Labor caucus for supporting the farm machinery inquiry some years ago and also the franchise law reform inquiry. Why are they important? Because those two reports led to the Small Business Commissioner Act being introduced by the Hon. Tom Koutsantonis, which a Labor caucus, a Labor Party and a Labor government brought into existence. It was the government that actually recognised that we need not only to support small business but to recognise that farming communities and farmers are small business and that they deserve support from independent people who can support them, and this report does that.

This report builds on those two earlier reports in the sense that it takes it to the next step and looks at the more macro issues and the issues around lack of competition in the industry at the retail level and the impact that it is having on small businesses, which are farmers and primary producers, whether they are in horticulture, agriculture or viticulture. In fact, I initiated the inquiry as a result of people in the wine industry, market gardeners, who came and spoke to me about the difficulties they were having with big retailers and getting contracts honoured and how often the retailers were able to unilaterally change contracts and they were powerless to act.

This report is no accident. The report is called 'From paddock to the plate: a fair return for producers'. The focus of this report is actually about making sure that, while we obviously want to keep prices down, we need to understand that, to have a viable primary production sector, they need to get a fair return on their investment to keep them sustainable. The report recommends a range of measures to correct the huge power imbalance that exists between producers and the big retailers in Australia. In fact that issue has come up in the media just recently, in the last couple of weeks. I will touch upon that in terms of Laucke foods, now one of the latest producers in the food processing area that has found the big retailers difficult to deal with.

The committee heard evidence from a range of producers and industry associations, and a common theme was that the producers often accepted breaches in contracts by retailers, fearing that their contracts would be terminated if they lodged a complaint. We heard evidence of that. The committee has recommended that the Small Business Commissioner receive additional funding and powers to provide an advice unit. This would allow primary producers to lodge offers of agreement with the unit on a confidential basis and to obtain advice on whether the terms of the agreement are fair. That is a constant theme of this report—to ensure that there is fairness in the sector.

The committee heard from a number of witnesses, some in confidence, who provided examples where terms and conditions of contracts were unilaterally changed by the big retailers. The problem currently experienced by local food producers like Laucke and others epitomises what is happening in the marketplace. I would have to acknowledge that the long-term answer to some of these issues is getting greater competition in the marketplace at the retail level.

We need more retailers. We need more exports so the producers have more options to sell their product to, but in the short term—because that will not happen quickly—I think there is an urgent need for government intervention to ensure that small businesses are going to survive. The power imbalance between producers and retailers is huge and real and exists today. It impacts on the viability of our producers every day.

Many witnesses were critical of the current federal regulation, the grocery code of conduct, which imposes greater restrictions on producers and wholesalers but not on all the retailers. There is an absence of federal government leadership, and this is another example where we as a state can show leadership. We did once before with our franchise law reform where there was action taken by this parliament and bills in this parliament that led the federal government to have fairer laws in the franchising area.

In the absence of federal government leadership, the committee recommends that the South Australian government should institute a state-based mandatory code or add to the regulations within the Small Business Commissioner's current jurisdiction. That proposal would fill the gap between the horticulture code of conduct and the grocery code of conduct. We heard evidence from the markets, the market people who operate as wholesale market people who said, yes, they would support the state government acting to fill the gap between the existing codes in the absence of any federal intervention.

In the same vein, we have done that in the labour hire area. The committee recommended that, in the absence of federal leadership in that area to protect workers, the state government should act. I acknowledge that it is probably not the best thing to do, for the state government to act, but in the absence of appropriate action by the federal government I think states have a moral obligation to intervene and act accordingly.

The committee also recommends that the South Australian government website include information about how cooperatives can help producers operate in larger supply chains. We heard evidence as a committee that one way of dealing with the retailers is for producers to form cooperatives, like they used to do in the old days in the rural sector—to form cooperatives together. They actually would have more bargaining power through those cooperatives and reduce the huge power imbalance that exists.

This is not by government regulation. What we need to do is to ensure that the framework exists for cooperatives to exist and to make sure that cooperatives are treated no differently from companies and that there is a capacity for cooperatives to exist and to be supported, because they support fairness in the marketplace.

The committee also recommends that the relevant government departments conduct audits of the relevant legislative instruments and grant programs to determine whether cooperatives are considered equal candidates through the application process. Evidence was given to the committee that cooperatives were not seen as equal partners, as models for operating businesses. They certainly are equal partners. The committee recommends that any barriers to cooperatives in the grant application process be removed.

The report also cites evidence from primary producers in the Barossa region that some of the current planning and development laws, regulations and policies act as a barrier to the growth of artisan food and wine businesses in key tourism and primary production areas. In the same way that we changed the framework for small bars and venues in the city, which gave rise to a whole range of new businesses, job employment and growth, the same thing could happen in the Barossa, McLaren Vale and Clare Valley.

I know that one of the new ministers who worked on the simplified regulation heard evidence in Gawler some time ago from businesspeople who said that we need to remove some of the barriers to get the right development but get development that will create smaller scale industry and build jobs and activity in those regions. In my view, those small artisan businesses offer real opportunities for business growth and new jobs in key tourism areas without detracting from the character of those areas. I was also pleased to see that the committee recommended that the planning minister undertake a review of those regulations to ensure that takes place.

In the time I have remaining, I would like to say that it has been a privilege to sit on this committee and deal with issues that are important to our community, both in rural communities and the businesses in those areas. I would like to repeat and reaffirm that we often hear from people and we are often criticised on this side of the house by people who say that we do not understand regional South Australia, that we do not understand small business. But if you look at all the major reforms in the last 12 years I have been here, they have been initiated by a Labor government, by the Labor caucus.

In fact, the farm machinery inquiry was opposed by the Liberal Party. The Small Business Commissioner Act, which farmers now use to support them, was opposed by the Liberal Party. So, when it comes to creating fairness in the sector, fairness in society and fairness in business, it is this government, the Labor Party, the Labor caucus, which have acted to ensure everyone gets a fair go. I support the report.

Mr WILLIAMS (MacKillop) (11:27): Unfortunately, I have not had an opportunity to read fully this report but—

The Hon. P. Caica: What are you going to talk about, then?

Mr WILLIAMS: I said I have not had the opportunity to read it fully, Paul, but I will—

The DEPUTY SPEAKER: I just want to remind members of Speaker Bishop's ruling on audible laughter—no laughing. This is a serious place.

Mr WILLIAMS: This is a serious matter, Madam Deputy Speaker. I remind the member for Light that it was his government that closed down the barley board here in South Australia. It is one thing for this government to stand up now and talk about how wonderful cooperatives would be when to my mind—I vigorously opposed the matter at the time—one of the best cooperatives we had in South Australia was the barley board which managed the sale of barley on behalf of growers across the state. We saw at a national level the same demise of the wheat board.

Fortunately for our growers, we have not had a particularly bad time since the demise of those two boards, but I suspect that the day will come when farmers will be calling out for governments around the nation to re-establish those sorts of marketing organisations to support smaller farmers. Having been a farmer for the vast majority of my life, growing up on a farm and owning and operating a farming business, I think I probably have as much knowledge in this area as anybody in this place.

I am very well aware of the economics of the farmers and the very competitive position they find themselves in the marketplace, which means that the price elasticity on their side, on the supply side, is much greater than it is on the demand side. I am very well aware of the fundamentals of the economics of it, that there are many, many producers right across all the commodity ranges and relatively few buyers. That obviously gives an imbalance in the power between the buyers and the producers or sellers. Notwithstanding that, I suspect this committee has missed the mark.

The Hon. P. Caica interjecting:

Mr WILLIAMS: I have read the recommendations, Paul, and I have read quite a bit of the report. I said I have not completely read it. Let me go through some of the recommendations. One is that there be more frequent funding grants at smaller values available to primary producers. You are not going to save the primary industry sector in South Australia by giving a few farmers a grant. In fact, all you are going to do is extend the pain in many cases. My experience—

The Hon. P. Caica interjecting:

The DEPUTY SPEAKER: Order on my right!

Mr WILLIAMS: My experience is that most often when governments give monetary handouts, they miss the target. Most often those who least need it and least deserve it get the handouts, and those who possibly are much more deserving and in much more need battle on and fall by the wayside.

A case in point—and I raised this in the house a couple of years ago—is how this government gave $2 million to Treasury Wine Estates supposedly because they were providing an extra 32 jobs in the Barossa Valley for a new facility they built. At the same time, they laid off 11 people in Coonawarra in my electorate, and I think it was 23 in McLaren Vale—a net loss of two jobs across the whole of South Australia. That is the sort of nonsense we get when we seek to bolster industries by handing out grants. We do not know the full picture and all we do is take money from viable producers, in this case in the agriculture sector, and hand it to those who either do not need it or in the worst case are going to remain unviable.

As Kevin Foley and Mike Rann argued before the 2002 election, let's get industry off the teat of government through government grants and handouts. This government has done a complete about-face on that particular issue over the past 16 years, a complete about-face. I agree with what Mike Rann and Kevin Foley argued way back then, 17 years ago. I agree with that and I think they were on the right track.

Of course, this government changed its position dramatically. Recommendation 6 says the committee recommends that Primary Industries and Regions SA and associated agencies establish formal partnerships with the state's agricultural bureaus. It is this government that cast the ag bureaus aside. Agricultural bureaus, for nearly 100 years, had a direct relationship with the Minister for Agriculture. They were direct advisers to the Minister for Agriculture, and it has been this government that has broken the nexus between the ag bureaus and the government, the minister of the day, yet now we see a recommendation such as this. Maybe the recommendation should read, 'Hell, we got that one wrong.'

There is a recommendation that talks about planning restrictions and the impacts that they have on primary industry. I have been fighting for a very long time to have the fire regulations changed when they apply to buildings outside built-up areas. I have relayed this in the house previously. There was a farmer in Keith in the Upper South-East who was producing high-quality export hay, who wanted to build and contract it to build three large hay sheds on his farm at a total cost of purchasing and construction of about $120,000 or $130,000 a pop. Then the local council knocked on his door and said, 'By the way, you have to put in standing water supply in case there is a fire.' These are sheds out in the middle of a paddock. The water supply was going to cost another $50,000 or $60,000 per shed—an absolute nonsense.

Yet this government has done nothing to address that. They made some small changes in regard to chicken sheds in the Murraylands where a Queensland investor threatened to pull out of a project there and the government came on board and made some changes, but they have not made those changes anywhere near far and wide enough to satisfy the needs of the farming community across South Australia.

Recommendation 13 relates to the South Australian bulk grain export supply chain costs. My only comment on that particular recommendation is: what do you do to help people who fail to help themselves? The grain farmers of South Australia were the proud owners of one of the best grain handling systems anywhere in the world. They were the owners and operators of it, and somebody waved a cheque in front of them and they took the cash and ran. Now they are coming back to government asking for some support. That is why, as a practising farmer, I question very seriously some of the outcomes of the work of this particular committee.

Laucke's have been mentioned. Of course, case in point: power prices. As much as this government might try to walk away from their involvement in the creation of the highest power prices and the least reliable power delivery system in the world, all the blame rests right at the feet of this government.

We have seen incredible increases in emergency services levies in this state under this government. Most of those cost increases have fallen on the farming community because it is a property-based tax. In my electorate alone we are talking millions and millions of dollars. It is the same for natural resources management levies: millions and millions of dollars have been extracted from the farming community in my electorate. These are real issues that have real impact on the viability of farmers and my constituents. There is no mention of either of those matters in this particular report. I think the committee has missed the mark on those two at least.

While talking about the emergency services levy, why did the government, in the lease of the forests in the South-East, leave it open for OneFortyOne Plantations to apply to have the whole of those forests regarded as one primary production enterprise under the Emergency Services Levy Funding Act, and therefore instead of paying something like $30,000 or $40,000 a year are now paying a couple of hundred?

Time expired.

The Hon. P. CAICA (Colton) (11:37): I suggest that it is a good time that the member's time has expired. In reality, for the life of me I should not be surprised, but I do not know how you can speak like the member for MacKillop just did on the report claiming that we missed the point of the report without having read it, or having just a cursory look over the recommendations. Had the member for MacKillop actually read the report, he would have seen those recommendations in context—not what he thinks they mean. Notwithstanding that, it was a good effort to talk for—

Mr Williams: Good try, Paul.

The Hon. P. CAICA: Well, it's true. It was a good effort to talk for as long as—

The DEPUTY SPEAKER: Order!

The Hon. P. CAICA: It was a good effort to talk for as long as you did without knowing anything about what you were talking about.

Mr Williams interjecting:

The DEPUTY SPEAKER: Order, member for MacKillop!

The Hon. P. CAICA: Deputy Speaker—

Members interjecting:

The DEPUTY SPEAKER: I am on my feet. Sit down. I have the book out now and I will start calling members to order. I cannot hear what the member for Colton is saying. I would like to extend to all members the courtesy of silence while they speak to the house. Member for Colton.

The Hon. P. CAICA: Unlike the member for MacKillop, who has not read the report, I have, but I am not going to talk too much about the report. I commend the report to the house and stand by its recommendations. What I can say is that I have enjoyed these last four years on the Economic and Finance Committee. I think we have done some exceptional work and I think this report is another piece of evidence about the exceptional work we have done.

Going back to the NBN report that we did before that—even before this term, the report that we presented on taxation in this state—the NBN report of course highlighted a lot of issues that are now, I expect, being raised by many constituents throughout the electorate offices in South Australia because we highlighted where there were going to be some problems and where what was being proposed to be delivered would not be able to be delivered. So I have enjoyed that very much.

This was another very good report, which I know the committee got its teeth into. We spoke to many people within the primary industry sector and got a greater understanding of not only what their needs were but, more importantly, the encumbrances that were an impediment to them being able to meet their own needs. That is detailed within the report as well. Some simple little things can be done to enhance the way in which those people in primary industries carry on their business.

Since the time that I was the agriculture minister, and even before, I have said that the young people and not so young people standing at bus stop 28 to catch the bus into town, who come into the city to do their work, are generally not aware of the importance of primary industry to our state's economy. A lot is said about mining. I have no problems with mining, but mining is boom and bust. If you get things right, agriculture and primary industry will be an underpinning significant plank in our economy today, tomorrow and well into the future. I think it was a report that was necessary.

Mr Odenwalder interjecting:

The Hon. P. CAICA: I beg your pardon? Wind it up, did you say?

Mr Odenwalder: No, the opposite: keep going.

The Hon. P. CAICA: Okay. I was a bit confused there, which is not unusual, but I will keep going for a little bit longer.

The DEPUTY SPEAKER: Only for a moment.

The Hon. P. CAICA: Confused for a moment; that is true. Quite often within this parliament, the reality is that the role of committees is underestimated by the government of the day. I guess I was no different when I was in the executive: here comes another report. What is it going to do? It is going to collect dust. I think it is important for the parliament as a whole to continue to back the role that committees play and the assistance that those committees can provide to the executive government of the day in regard to the inquiries that they undertake.

Of course, we have committees that have statutory responsibilities and they will continue beyond the next term. I do not want to get on the bandwagon about what the committee structure might look like next year when parliament resumes because I will not be here, but I still will care what they look like because they have a significant and prominent role to play. I think some work needs to be done in such a way that the parliament and all those who make up the parliament have a good look at how committees can be restructured in the future to not only meet their statutory obligations but fulfil their significant role in advising parliament on any decisions it might make.

I think I can wind up soon because someone else has come who is going to speak, even though we are all always here. Getting back to this particular report, this was a good report and I think it was a good report. My mum used to say that self-praise is no recommendation. However, unlike the member for MacKillop, who has not read it and says it is a bad report, those who do read the report will say, 'You have done some good work here,' and I am proud to have been a member of a committee that has done that good work.

In conclusion, I want to thank my fellow members of the committee. The Presiding Member, amongst others, has done an excellent job of managing the committee. Most of the projects we have done have been undertaken with bipartisan support across the committee table, and that is a good thing. I want to finish off by thanking and congratulating our committee staff. They have been as good as any I have worked with, and I thank you all for it, not just for this report but for all the reports we have done in my time on the committee. I think that you are great assets to this parliament and the role that you fulfil is a role that assists not only committee members but the parliament as a whole to be a better parliament than it would otherwise be without your input, so thank you.

Mr KNOLL (Schubert) (11:43): I rise to speak to the 'Paddock to the plate: a fair return for producers' report conducted by the Economic and Finance Committee. I was gladly surprised when the member for Light came and proposed terms of reference in this way to help look at an issue that is very important to South Australia. We know that our agriculture and food manufacturing industries are the largest employers in South Australia. They employ one in five South Australians. Happily, that is more than the level of people employed in the Public Service in South Australia. For us to help unlock the potential of this industry is extremely important.

We undertook to take evidence right across South Australia to understand and get at the heart of what roadblocks there are in the way of helping us to get better returns for producers and also for manufacturers. I want to pick up on three of the recommendations. The first of those is in relation to greater partnerships and coordination with the state agricultural bureaus.

When we were out in the Barossa and had a day's hearings in the Barossa Council chamber, a number of the agricultural bureaus came to speak to us and they were quite frank about the issues they were facing. Energy costs was an issue they talked about quite strongly, and they showed their frustration about the current energy situation and how that is impacting upon their business. Some of the dollars they were talking about where I am sure hurting the ability of their businesses to operate and grow.

But certainly our state's agricultural bureaus are an important part of helping us to grow, modernise and advance agriculture in South Australia. It is a body primarily set up to help improve and look at innovation in the production and growing of food for consumption, and they do a great job They get out and apprise themselves of what is going on in the world, so to look at having greater interaction with agricultural bureaus is extremely important.

The second recommendation is around planning restrictions. The phrase 'right to farm' gets bandied around in this place quite a lot, and I know that it gets bandied around in the council quite a lot. It is very difficult at times to understand what that means. One would consider that farmers have the right to farm. They are producing billions and billions of dollars a year worth of X farmgate value; they are able to farm.

To try to get into the specifics of the concerns of a number of farmers, many of whom exist in my community, I think the central way we can and should define 'right to farm'—and those who feel that their right to farm is under threat—is due to planning and mixed-use considerations: for example, where there are competing agricultural and farming systems that do not really work together. That is certainly an issue anywhere where you have broadacre and horticulture sitting by side—by horticulture, most predominantly viticulture.

The two competing systems do not always work well together, whether that be burn-offs that the broadacre farmers do from time to time—which is not advantageous and is potentially dangerous towards grapegrowers—and, by the same token, some spraying that grapegrowers undertake that may damage broadacre farmers' crops, and spraying also undertaken by broadacre farmers that may damage grapegrowers' crops. That is an issue that needs to be dealt with, and it is something in an evolving space.

I look at the work that Biosecurity SA has done. I also look at, especially in the Barossa Council area, the way that they have tried to advance new planning decisions to help take account of these things with the use of buffer zones and screening, essentially to try to find a planning solution. There are broader planning issues. We know in the Barossa that if you want to set up a cellar door, that is okay, and if you want to set up a tourism venture, that is okay. But as soon as you want to set up a retail outlet selling the food you grow on your farm, that becomes a lot more difficult from a planning perspective.

To set up small-scale production that value-adds your on-farm produce also has some difficulties. That is why I am glad that, even though this is a majority government committee, the committee was mature enough to talk about the fact that there are current planning restrictions that place an undue burden on farmers. We need to preserve their right to farm so that they can continue to grow the produce that helps to deliver export dollars into South Australia. If we are lucky enough to win next year, it is something that I will certainly be pushing hard for, because I think that my community in the Barossa is at the coalface of growing residential development butting up against broadacre farming, butting up against viticultural operations.

We need to find ways to make these all work in harmony and that there is greater understanding between the different groups and greater acceptance that we live in a broader community that needs to be mindful of what others are doing in and around that community. So I very much support recommendation 8, as it seeks to highlight and give voice to an issue that has frustrated many in the farming community for a long time. The last recommendation I want to talk about is in relation to the grocery code of conduct. I note that the recommendation is worded in such a way as to be as soft as possible, and I certainly supported that. Recommendation 9:

…suggests that [a] statutory review of the Grocery Code of Conduct, to be conducted at the request of the responsible Commonwealth Minister in 2018, should consider recommending that the Code be mandatory in nature.

I think this is about as soft a way to put a recommendation. I am happy to support it in this context. It is written in a very sympathetic and soft manner because what we are talking about is a huge dilemma in that we know that there are issues around major supermarkets not always dealing fairly with their suppliers. The ACCC has undertaken some very significant investigations that have resulted in multimillion-dollar fines against major supermarkets. We want that problem to be fixed because markets are not always perfect, especially in the grocery sector where there is a concentration of power that leads to an imbalance of power, and it is always the smaller player in that negotiation that comes under fire.

As a community, we want to get to the right answer whilst still preserving the rights of businesses to undertake vigorous negotiations to deliver the best value produce at the cheapest price for its customers. A mandatory code of conduct in and of itself goes to a step that Australians have not been willing to go to up until this point. The idea of trying to have a court decide where the line is between fair and vigorous negotiation and undue market influence is a very fine line to achieve and one that I think is quite difficult.

Essentially, what we are trying to express through this report is that there is still an issue there, that there is still an imbalance of power and that it needs to be dealt with and fixed. A mandatory code of conduct for the grocery industry is a very extreme step, but we have to look at all options on the table. We need to keep applying pressure on those who exert or have the lion's share of the bargaining power in any two-way negotiation. They need to be responsible. We are watching them and watching their conduct and, if we see that there is a further misuse of power, we may have to go to a stage where we talk about contemplating a very draconian step.

We want to make sure that our food industry grows and prospers. It is extremely important that that happens. I look at South Australia and I look at Foodland, for instance. Foodland is a great supporter of South Australian produce. I believe that one of the key reasons we have as strong a food industry in South Australia as we do is that we have a grocery supermarket chain that has been willing to support local producers to help them to develop economies of scale, which helps them to tackle other markets, such as dealing with other major supermarkets and also growing markets interstate and then growing markets overseas.

The reason I know this works is that I spent 20 years of my life before coming in here doing just that with the family business. It is why this report is so important and why I am happy to support it. I look forward to a better way of operating for our food industry into the future so that we can grow and gain more of those desperately needed jobs for our state.

Mr ODENWALDER (Little Para) (11:53): I want to thank the house and the whips this morning for their forbearance and their indulgence in allowing us to bring this matter forward. It was a pleasure to be part of the preparation of this report and this inquiry.

First of all, I want to mention the staff again. I will not embarrass them any further, but it has been an absolute pleasure working with them over the last four years. As I said before, we always receive an excellent report and excellent support from the staff. I want to thank members for their contributions today. I want to thank all the members of the committee, particularly the member for Schubert, as I said before, who has ensured that, unlike some other inquiries, this has been quite a bipartisan exercise and one that I think has yielded some pretty good fruit as a result.

In closing, I mention again the member for Light, who is an excellent local member. He drove this inquiry and he puts lie, as he alluded to in slightly stronger terms, to the idea sometimes put forward by the other side that we on this side do not represent the interests of rural and regional South Australia. We do, the member for Light particularly does—he has been doing it for the last 12 years, day in and day out—and he has been a major driver of this report and I commend it to the house.

Motion carried.