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Innovative Policy C2 Rd 2 Australia: Farmer collective bargaining, Australia's revised Trade Practices Act

Charles McElhone

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Australia's 130,000 farmers are predominantly small businesses, 99 per cent of which are family]owned and operated. This business composition has both advantages and disadvantages. On the one hand it ensures great strength and flexibility, enabling small]scale farmers to specialise in commodities, adapt to emerging markets, identify and fill niche market opportunities, and add value along the production chain. But it can also make these farmers weak negotiators when selling to much larger, more powerful buyers.
Collective bargaining is a way of overcoming this weakness in the marketplace, and involves two or more similar competing businesses joining together to negotiate the sale or purchase of products or services with a common customer or supplier.
The National Farmers' Federation (NFF, see Box 1.1) has successfully lobbied for a new collective bargaining enotification process', making it easier and quicker for farmers to negotiate collectively with large businesses. This facility is administered through Australia's Trade Practices Act (TPA).
This report shows how collective bargaining has helped level out the power imbalance often inherent in farmer contract negotiations, ensuring that Australian farmers attain the rewards they are entitled to in producing the highest quality goods. It also shows how the recent amendments are an important example of a policy change that has enhanced market participation by small]scale agricultural producers.

This publication forms part of the Regoverning Markets project.

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