The ACCC's grocery price inquiry - and the mainstream media's reporting of it - has missed the point that farmers have been making: while grocery prices are going up, farmgate prices often are not. So what is happening in between?
It must first be remembered that the inquiry itself was created as a result of Prime Minister Kevin Rudd's election campaign last year, in which he promised to address the rising cost of living - ie fuel and food.
As Mr Rudd - and those who voted for him - has found, hollow rhetoric about 'easing the squeeze' for 'working families' is not the same as actually addressing the problem.
On both fuel and food Mr Rudd has launched expensive government inquiries that came to the same conclusions as similar inquiries conducted under the Howard government.
And so the mainstream media, whose focus is ordinary consumers, has focussed on the political dilemma for Rudd and the on-going hip-pocket problem for disappointed voters.
It was through this prism that the ACCC inquiry was structured: looking at why grocery prices were on the rise and what could be done about it.
The ACCC blamed the drought, global markets and natural disasters for rising food prices.
The question of competition between retailers was looked at through in terms of pushing down prices and the presence of the third player Aldi was found to have a marginal effect.
But the question that needs to be answered though, is what impact the extra buyer - if it were competing nation-wide - would have on bidding up the farm-gate price?
Not surprisingly the ACCC found a lack of evidence to support claims that supermarkets were pressuring farmers to supply goods at low prices.
These claims have always been hard to substantiate due to the shadowy way in which the pressure is applied. But where there's smoke ... the anecdotal evidence from farmers is too regular to be ignored.
Granted the ACCC did recommend a strengthening of the horticulture code of conduct governing transactions between farmers, agents and wholesalers/retailers in that sector.
But that ignores the fact that in other industries farmgate prices have not shifted while retail prices have soared.
If drought and global markets were the prime cause for supermarket price rises, surely then farm gate prices would also be high.
But grocery prices started soaring well before this year's global commodity boom, which could, in fact, flow through to farm gate returns. Heaven knows what this will then do for retail prices.
What do you think?
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