Tuesday, February 19, 2013

Is it time for more transparency in primary produce?

The Coles and Woolies milk battles are again in the media, with The Age reporting that the supermarket chains are putting them out of business, and the ABC reporting that there is something we can do. I agree with the ABC, and in effect it is us, the consumers, that must decide whether we want to pay for people (in this case, farmers) to get a "fair return" or not.  However, there's a key piece of the puzzle missing here - information.

Market theory rests on a number of assumptions.  One of these assumptions is that the consumer has access to all the information they need.  In today's world of complex supply chains, and questionable marketing, this assumption rarely holds true.  So whilst its all good and well for the ABC to argue (and for me to agree) that we need to be prepared to pay for what we want, it simply isn't feasible unless the information is available.

So what should we do?  I know, I know - lets regulate more, and make those evil companies tell us the right information, yes - that'll do the job.  No, we as consumers should vote with our pockets, and buy from companies that do supply the level of detail we want.  Many people are happy to be swayed by promises by coffee companies to pay a certain amount to the producer of the coffee, why are we not interested in the same question when it comes to our own farmers?  After all - when they suffer, its us as the tax payer who subsidizes them.

Let me give  couple of examples that if you've read this much, you're probably interested in:

1. Eggs
Time and time again the discussion of what constitutes free range eggs arises.  There is currently an industry managed standard that says 20,000 hens per hectare constitutes free range, like many others I think this is taking the piss, but the real objection I have here is that rather than looking for a label of "free range" we should be looking for a number, and making a decision ourselves.  Imagine filling up with petrol and finding the price on the bowser saying "cheap", only to find out when you pay that "cheap" actually means $1.90 per litre.

2. Milk
In the current debate, it would be great if on the bottle of milk, it said how much the producer was paid for the milk.  I have no idea how much this is, but if it were visible then I could make an informed decision as to whether I was prepared to pay an extra $1 per litre knowing that the producer gets half of it (for example).

The key point here is not that you must want free range eggs, or milk that doesn't force farmers to cut costs.  The point is that you are making an informed decision.  So - go away, find the brand you buy from, and send them an email requesting they put the information you want on the label.  More importantly, even if you're not happy with the answers to your questions, buy the brand that takes the time to answer them.

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