Australia’s chicken farmers cry fowl with claims of unscrupulous trading practices by processors

Australia’s chicken farmers cry fowl with claims of unscrupulous trading practices by processors
  • PublishedApril 6, 2024

As the cost of living continues to bite, chicken is the most affordable meat in Australia. 

But growers say they are going backwards because of what they describe as “unscrupulous” behaviour by powerful processors in one of the nation’s most highly concentrated markets.

Every Australian, on average, eats about 50kg of chicken a year — a figure that has doubled over the past three decades.

The Australian Chicken Growers Council (ACGC) argues chicken’s popularity has come at a great cost to farmers.

Hundreds of white baby chickens flocked together in a shed.
Baby chickens at a poultry meat farm at an undisclosed location.(ABC Central Coast: Mary-Louise Vince)

“180 million chickens go into consumers’ mouths a year … but of that $14/kg that you’re paying for your breast meat or thigh meat, the grower gets around $1,” ACGC chief executive Joanne Sillince said.

While the two big supermarkets control 65 per cent of the grocery market, Australia’s chicken meat industry is dominated by two major processors, Ingham’s and Baiada Poultry, which control 70 per cent.

Woman wearing a pink shirt and scarf stands opening farm gate, with green rural setting in the background
Australian Chicken Growers Council acting CEO Joanne Sillince.(ABC Central Coast: Mary-Louise Vince)

“You’re trapped by a contract that is unconscionable, inequitable, and puts all the risks onto yourself,” Dr Sillince said.

“It’s getting harder and harder to be a chicken farmer nowadays.”

Worsening conditions

Gary Ekert was a chicken grower in the New South Wales Hunter Valley for two decades before being forced out of the industry.

Man with grey hair and a navy shirt standing in front of green trees and shrubs.
Former chicken grower Gary Ekert says he was forced out of the industry about 14 years ago.(Supplied)

“What the growers are on now is probably considerably less than what we were on when we got out 14 years ago,” he said.

“The [processors have] got the power to do what they want, dictate price, and screw the growers down.”

Mr Ekert was one of several growers who took legal action against their processor over a contract dispute.

The farmers won but Mr Ekert said those heavily involved in the case, including himself, paid the ultimate price.

“At the end of that 10-year contract, those three growers who were involved were also told their farms were surplus to the processor’s needs,” he said.

Farmers cry fowl

Some chicken farmers are too afraid to speak out publicly for fear of reprisals.

Those who spoke to the ABC on the condition of anonymity recounted experiences of unfair contract negotiations, unreasonable penalties, and low returns.

“The power of the big two is a constant threat over our head” one grower said.

“Growers need processors but we need to be remunerated … to make the growing side of things more viable,” said another.

One farmer, in the process of exiting the industry, likened it to living in a “dictatorship”.

“Apart from the financial burden, it’s emotionally and psychologically unhealthy … you are at their mercy,” they said.

Powerful processors

Unlike Australia’s other meat industries, poultry farmers do not own their chickens.

The processor owns the birds and their genetics, hatcheries, plants, and distribution networks while the growers own the physical assets such as land, shedding, and equipment.

Hundreds of white chicks in a shed, feeding from red grain troughs.
Farmers in contracts with processors do not own their chickens.(ABC Central Coast: Mary-Louise Vince)

In 2022, the Australian Competition and Consumer Commission (ACCC) said the companies held too much power and the contracts could cause “significant financial harm to growers”.

The processors were asked to make some of their contracts with farmers fairer but growers say little has changed.

Calls for industry code of conduct

The National Farmers Federation (NFF) maintained a mandatory code of conduct was the only way forward for the industry.

The NFF has been investigating the issue over the past 18 months and its final report was released on Wednesday.

“This report’s research and stakeholder engagement identified a widespread lack of market transparency, misuse of market power, and economic harm,” the report said.

A proposed code was also included in the report, which the NFF said would provide “a regulatory framework to ensure confidence and fair-trading for all participants of the poultry meat supply chain”.

In a statement, Federal Agriculture Minister Murray Watt would not commit to a mandatory code but said the final report would be “carefully considered by the government”.

Mr Watt said he was aware of price and market transparency concerns and said: “Farmers deserve a fair price for their hard work.”

Supermarket shelves with packets of processed chicken meat.
Farmers only receive around $1/kg for chicken meat.(ABC)

In a statement, the Australian Poultry Meat Association (APMA) said the long-term viability of the industry was “of national significance”.

“All stakeholders continue to work together to ensure it continues to grow.”

There are at least 25 poultry farms on the market across Australia and Joanne Sillince said she feared for the industry’s future unless there was action.

SOURCE: ABCNEWS

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