Another episode in the drama of Victorian dairy farmers supplier pricing has the Murray Goulburn Co-operative reducing prices paid for milk at the farm gate without consulting the farmers affected. The co-operative was brought into play to stop the gouging of dairy farmers by the market dominant retailers. Instead, their own co-op is the one now screwing them over. Given that Murray Goulburn has been partially listed on the ASX, its status as a co-op is in doubt.
These events point to two failures of the social contract between producers, manufacturers and consumers. The first is to fail to see that the participants in this drama are all humans who have (I would say) an equal right to share in the benefits of the productive economy we are all engaged in. Manufacturing and distribution, in the form of Murray Goulburn, principally its managers, but also its shareholders, have treated the farmers instrumentally by preferring their own welfare over the welfare of the farmer’s and their families. (I would say they have not seen the farmers as creatures made in the image of God) Management has done this by accepting high salaries and plush accommodation and the shareholders by accepting dividends and capital growth of their equity while allowing the managers to force prices down. Consumers are complicit by accepting low prices and giving the their business to retailers which participate in the price gouge. Political commentator Waleed Aly has pointed to this problem in his call for consumers to pay a few cents per litre more for their milk and to eat more of other locally made dairy products. Incidentally, such a move would help Murray Goulburn too.
The second failure is that business and consumers have not seen the whole chain of production, manufacturing and distribution as an organic part of society that needs to be nurtured to ensure that it is sustainable as a key component of our food system. Bleeding the farmers dry will break that system and destroy community, especially small, fragile rural communities.
This problem needs us to respond as active and committed consumer activists, as Aly suggests.