The Australian Greens today called on Coles to make clear how its price agreement with farmers will ensure that farmers can be profitable and stay productive on the land.
"If Australia is to remain a country where farmers can earn a decent living, stay on the land and continue to feed us, we need to balance the needs of consumers for cheaper fresh food with the need for fair prices for farmers," Australian Greens Acting Leader, Senator Christine Milne, said.
"Coles must make clear what its price arrangement with growers is, how long it will last, and what evidence they have that it won't hurt growers' ability to stay productive on the land.
"The key question is what happens when the current glut is over? Can farmers renegotiate or are they locked in to a low price agreement while Coles restores a higher profit margin?
"Coles has said that, in exchange for an agreed price with growers, it will take as much of their produce ‘as it possibly can'. Does this mean that growers have locked into a low price but Coles has not locked into taking all of their produce?
"What must Coles' profit margin have been previously if it can afford to halve prices now? And what is its margin on other, not discounted, fruit and vegetable lines such that it can continue to make a profit in that section?
"Unlike Coles, farmers do not have the capacity to offset losses against other areas of their business.
"Australian farmers are under increasing pressure because they can no longer direct fruit and vegetables during a glut to the processing sector or the export market. The high dollar and the free trade agreements have meant that processors have gone out of business and cheap imported produce are undercutting them.
"The only hope for Australian farmers is that they get a fair farm-gate price for what they produce and that is why this supermarket price war could potentially be so damaging in the long term for Australian producers."