Background
In Australia, the acquisition and distribution of food products from farmers, manufacturers and suppliers mainly takes place, both generally and in relation to specific food categories, at a national scale (ACCC, 2021a). Practically this means much of the supply and distribution of all kinds of foods (besides exports) from their source goes to large supermarkets that operate across the whole of Australia, namely Coles[1] and Woolworths[2] as the main retailers to household consumers. A large part of the remainder is distributed and sold through smaller supermarket chains such as Aldi[3] and IGA[4]. Even distribution of food to local restaurants, cafes, hotels, clubs, hospitals and the like is carried out by larger distributors (ACCC, 2021b; Mitchell, 2021) such as PFD[5], which is now largely owned by Woolworths (Woolworths, 2021). Smaller regional (ACCC, 2021a) and local distributors are a small part of the supply and distribution system for food. These can also take the form of wholesaling to local stores or local markets (ACCC, 2021a) that sell direct to household consumers.
The economic activity of food distribution currently works so that what we have in Australia is mostly a corporatized supply chain (Evans, 2022, quoting Forbes). Around 60% or more of food provision in Australia is dominated by Coles and Woolworths (King & Mortimer, 2013). In this system it is easy for remote and many regional towns to miss out on supplies of particular groceries because supplies to Coles and Woolworths (who do not operate there) are the top priorities (Evans, 2022). Supplier then also have less choices because of reduced routes to stores and markets across Australia (Jackson, 2021), which can drive up the cost of groceries in economically disadvantaged areas. In effect, in relation to food, there is a concentration of power and ownership (Rose, 2022, 13:24-13:30 and 16:42-17:00) in the hands of a few corporations. This results in exclusion of people from food distribution (and production) decisions, which is typical of capitalist/neoclassical economics.
Unstable future and food transformation
However, the various sectors of the food industry are not isolated from national and global challenges, which give rise to food insecurity due to factors such as decline in soil quality with overuse of chemical fertilizers, decline in nutritional quality of food, decline of natural inputs (particularly water), collapse of ecosystems, loss of biodiversity, global warming and human-induced climate change (Hunter & Hewson, 2020; Orchard, 2022, 4:46-5:17). These problems are becoming so deep that some have called for a ‘Great Food Transformation’ (Charlton, 2023) that is sustainable, healthy, safe and fair to all (Rose, 2020). This transformation includes how food is produced, processed, distributed, sold and consumed, including change in consumer choices (Charlton, 2023). It also entails using less energy in production, transportation and storage, and solving the large problem of food wastage which in some cases can be up to 40% of food stocks in stores (Rose, 2020). Implementing sustainable agricultural practices is critical, with policy actions having to take place at Federal level and State/Territory level (including local government) to create a food system that nourishes Australians, but also people in other countries that rely on food grown in Australia because those countries are prone to certain natural disadvantages, e.g. China with less arable land per population and floods that have required the importation of wheat (Rose, 2022, 9:06 -9:16).
Implementing the necessary changes while remaining within natural resource limits is a daunting task. Clearly, there is a need to rethink the corporatized supply chain and to move quickly towards policies and practices that are ‘public good’ oriented (Rose, 2020) involving renewable and healthy food systems. In this regard, local, family or cooperative owned businesses have something to offer. They can provide much food to their respective domestic markets and must be heard (NAFDA, 2022). Indeed, policies that enable them to grow, and develop strong community links, will mean that communities are better catered for in having food products available (Evans 2022, quoting Forbes). This can also include ‘urban farming’ (Binns, 2013). It does, however, require a mind-shift away from producing food merely for monetary profit to enrich corporations, in a manner that is basically unsustainable and inherently unfair (Rose, 2020), towards producing food for community or consumption needs, which can include partnerships between farmers, distributors and consumers who share investments, responsibilities and rewards (CSA, n.d.). In essence, production that has a predominant consumer/consumption motive versus a profit motive.
Features of new economics of food distribution
Such a food transformation goes hand in hand with a shift to renewable energy sources and can be called the embracing of renewable food systems. Among other things, it involves regenerative agricultural practices (Orchard, 2022, 4:18-4:26) and aspects of the circular economy applied to agriculture (UN, 2021), so that resources (inputs and outputs) are capable of being recycled and by-products reused, with no waste being the design default. The same applies to distribution arrangements so that food access is enhanced for consumers and no wastage occurs. The true costs of agricultural production should also be known (Rose, 2020), so that all negative externalities and positive externalities (if any) can be accounted for. Most important is support for and expansion of local and regional food networks, the building of skills in their relevant workforces, and producer-consumer connections (Rose, 2020) being made in a cooperative economic framework. This needs to apply not only to rural economies but also in urban and remote areas.
Food systems governance then moves to collaboration between the various actors and stakeholders involved, and away from corporate hegemony. As well, First Nations indigenous knowledge can be garnered and incorporated into food production (as well as distribution and governance), with new, or rather ancient, grains being marketed as part of menus, e.g. mamadyang ngalluk or ‘dancing grass’ (Valent, 2020). The system would also reflect an indigenous relationist ethos in that care and attention is given to ethical obligations (Brigg & Graham, 2021) that go with food production and its connection to land and environment, distribution of foods across lands/country, and the relations that these create, or need to create, with communities of producers, distributors and consumers. Furthermore, embracing diversity in food production and practices (Rose, 2022, 13:00-13:09) is essential for giving food systems resilience that is needed in case of natural crises or shortages. All these are some of the measures that lead to an inclusive economy (Orchard, 2022, 3:57-4:03) so that people can participate in decisions and activities that shape their food systems (Rose, 2022, 18:46-19:10) and so that they have access to fresh and healthy food (Rose, 2022, 20:01-20:10).
Cooperative agriculture models
For the full impact of a revolutionary food transformation, what is really required is agriculture cooperatives playing a significant role in the food economy. Agriculture producer, distributor and consumer cooperatives are each a means to provide its participants with access to resources to carry out their activities efficiently. This can apply to improved seeds, fertilizers, machinery and farming know-how, and to the means for distribution of food commodities and products, and to places for food purchase and consumption. Each can be operated cooperatively, with the result that economic enterprise combines with social enterprise (McMullen, 2020) for the good of all. Members would have one vote each, and so have a real say in the relevant cooperative as compared to commercial corporations today in which a person’s votes are based on the number of capital shares held.
For local or regional producers cooperatives can also facilitate better collective market access and fair prices due to increased bargaining power with potential buyers and distributors. This is critical to reducing the vulnerability such farmers face especially when exposed to exploitative corporate intermediaries in the distribution chain. Such cooperative efforts help ensure a more equitable distribution of farming profits, not only for producers but also through to the work and economic activities of distributors and consumer cooperatives. As well, the cooperative framework can offer risk management services on a mutual (rather than merely competitive) basis, such as mutual insurance for crops and hedging against price volatility by sharing risks collectively. In addition, there is a need to share knowledge and for capacity building between participant members of cooperatives which can be achieved amicably through cooperatives and in a cooperative spirit. A good example is Oz Group, in coastal northern New South Wales, a soft fruit supplier to major supermarkets and overseas (Oz Group, 2020).
The sharing of best practices and adoption of innovative techniques, including via indigenous knowledge, to enhance agricultural production can also help improve food quality for the cooperatives’ markets and promote sustainable farming practices. These all assist in enhancing the overall welfare of rural, regional and remote communities, while giving opportunities for social and economic empowerment. It is cooperatives that can offer a stronger voice for people in these communities, and foster community resilience and social cohesion (Dennis et. al., 2021).
Conclusion: need for economic democracy
Really what is required is ‘economic democracy’ in food supply, distribution and consumption enterprises. Economic democracy as advocated by David Korten (n.d.) and others can play a significant role in ensuring food security for all people. This involves local control (as a relative concept depending on geography of a region, and so is scalable particularly in Australia) and decision-making that empowers local communities in organizing their food systems through cooperative and other participatory approaches involving farmers, distributors, consumers, and other stakeholders to meet their specific needs and priorities. In this way the local people, including through indigenous know-how, can build sustainable and resilient food systems that prioritize long-term ecological health and well-being of the environments in which foods are produced, distributed and consumed, as well as that of local communities themselves. For example, through regenerative agriculture and diversified farming (compared to monoculture), while promoting biodiversity and use of local inputs. With human caused climate change this is certainly necessary so that food systems are less vulnerable to various adverse impacts and to the global market fluctuations that will accompany them.
Fair distribution and access to food products, with shortened supply chains, are also part of the equity and social justice found in economic democracy so that everyone can have access to nutritious and culturally appropriate food at affordable prices. This involves challenging the concentration of economic and social power that exists in the food system today, and so countering the dominance of large corporations, or even converting such corporations to work as cooperative enterprises. Along with this is the democratization of knowledge and research in different agricultural sectors by open source means. Unless such policies are adopted and implemented we will not in future have the potential to transform food distribution systems into sustainable life-carrying systems.
References
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Footnotes
[1] https://www.coles.com.au/.
[2] https://www.woolworths.com.au/.
[4] Independent Grocers of Australia: https://www.iga.com.au/.
