Higher food prices might be worth paying

OVER THE FENCE

FOOD PRICES: Paying more for food might be a sacrifice that has to be made to ensure a healthy horticulture industry.

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OPINION: Fancy paying more for your food? Of course not. But some say it may be the sacrifice we have to make to ensure a healthy horticulture industry.

Just a 10 per cent increase in fruit and vegetable prices may be all it takes to keep the growers in business. That's about $15 extra on to the average supermarket food bill.

If we don't, the doomsayers warn, then the number of growers will dwindle till just a few big operators are left in the business.

Fresh locally grown veges will be harder to come by and more will be flown in from overseas - most likely from China.

That's the inevitable result of growers being squeezed between their main outlets, the supermarkets, and the costs being imposed by an unsympathetic government, industry body Horticulture New Zealand says.

The two big supermarket chains are easy to cast in the role of villains. They control the industry - only the farmers' markets and a few independent greengrocers offer alternatives - and claims of unfair pricing abound.

The Greens launched an attack on the chains, Progressive and Foodstuffs, recently, armed with a survey of anonymous growers who made claims of markups of up to 500 per cent.

The list of complaints on the Greens' website makes impressive reading, but they are unsubstantiated.

Progressive is Australian-owned, so there's another reason to be suspicious of it, if you're the xenophobic type. And it has just announced a 17.3 per cent lift in profit, which is much more than growers can say. Foodstuffs, by comparison, is a conglomerate of local stores formed into co- operatives, but with huge buying power.

It's a shame the growers don't feel confident enough to put their names to their claims, but they say they will be persecuted if they do.

There's no doubt a fear of the power of the supermarkets permeates the industry. I remember ringing a now-former president of the grower body some years ago with questions about this only to be told: "I absolutely refuse to comment on anything to do with the supermarkets, and you can't even quote me saying that."

For their part, the supermarkets deny wielding any such power. And if they do, then that's got to be good for the shopper, doesn't it?

Well, yes and no. We should be happy if food prices can be kept down, but if the cost is fewer fruit and vegetable growers that's not so good.

Which brings me back to the idea of paying more for our food. It's not new. The latest to voice it is the European Economic and Social Commission which in May recommended that food prices be increased to reflect real costs.

Massey University agriculture director Jacqueline Rowarth is another supporter. She points out that in the 1950s farmers received half of each dollar, or pound as it was then, spent on food. Now it is less than 20c.

"With realistic food prices," she says, "farmers would be able to afford the new technologies that are vital in the challenge to create food safety and security in the face of climate perturbation (disturbances), land intensification, environmental regulation and increase in pests and diseases."

These are all issues that we tell survey-takers are important to us, but when we shop, we still buy on price above all else - that's something proved by other surveys.

Of course, lifting food prices to keep the growers afloat hasn't a show of becoming reality. It's just not practical. The cost of regulation would be prohibitive.

And imagine how popular the government that brought it in would be.

But at the least, more light should be shone on what makes up the price of food. A breakdown of the true costs and margins would better inform buyers and we would know if the claims of exorbitant markups were true or not.

A couple of months ago, HortNZ asked Commerce Minister Simon Power to launch an independent investigation into this and to set a code of conduct for the industry that would allow more transparency.

However, he refused, saying it was "not appropriate" for the Government to intervene. He said the supermarket chains were willing to work with growers and that everyone should work together on a voluntary code.

His view was that there was no evidence of a competition problem, something the Greens would no doubt challenge.

I'm told that, so far, talks between the growers and the supermarket moguls have made little progress.

The only option left is for the growers to take matters into their own hands.

They can increase their bargaining power by creating co- operatives or by forming marketing groups around their products or regions. Some areas are talking about this but the growers are reluctant to give up some of their independence - or as one grower remarked to me recently, "it's all hui and no doey".

- NZPA