THE CRAWFORD FUND For a Food Secure World THE SUPERMARKET REVOLUTION IN FOOD GOOD, BAD OR UGLY FOR THE WORLD’S FARMERS, CONSUMERS AND RETAILERS? The Crawford Fund 2011 Annual Parliamentary Conference Parliament House, Canberra 14--16 August 2011 Editors: A. Milligan and A.G. Brown THE SUPERMARKET REVOLUTION IN FOOD Good, bad or ugly for the world’s farmers, consumers and retailers? The Crawford Fund 17th Annual Parliamentary Conference Parliament House, Canberra, ACT, Australia 14–16 August 2011 Editors: Ann Milligan and Alan Brown The Crawford Fund The Australian Academy of Technological Sciences and Engineering established the Crawford Fund in June 1987. Named in honour of the late Sir John Crawford, the Fund commemorates his outstanding services to international agricultural research. The Crawford Fund is a non-profit, non-government organisation, dedicated to raising awareness of the benefits to developing countries and to Australia of international agricultural research. The Fund depends on grants and donations from governments, private companies, corporations, charitable trusts and individual Australians. It also welcomes partnerships with agencies and organisations in Australia and overseas. The Fund promotes and supports international R&D activities in which Australian research organisations and companies are active participants. It supports the work of the Australian Centre for International Agricultural Research (ACIAR), the Australian Agency for International Development (AusAID), and the Consultative Group on International Agricultural Research (CGIAR) and other international research centres. The annual Parliamentary conference is a key part of the Fund’s public awareness campaign, which increases understanding of the importance and potential of international agricultural research, its achievements and needs. The Fund also runs training programs that fill a niche by offering practical, highly focused non-degree instruction to women and men engaged in agricultural research and management in developing countries. The Crawford Fund Level 3, 10 National Circuit Barton ACT 2600, Australia Phone: +61 (0)2 6188 4370 Email: [email protected] Web: http://www.crawfordfund.org/ ©The Crawford Fund 2012 ISBN 978 1 921388 21 7 Cite this work as: The Supermarket Revolution in Food: Good, bad or ugly for the world’s farmers, consumers and retailers? (Eds A. Milligan & A.G. Brown) Proceedings of the Crawford Fund 17th Annual Parliamentary Conference, 14–16 August 2011, Canberra, Australia. Transcriptions Annette Chapman Cover Stacey Phillis, Graphic Force Photographs The Crawford Fund and conference presenters Production ENRiT: Environment & Natural Resources in Text ii The Supermarket Revolution in Food: Good, Bad or Ugly? Contents Page no. ii The Crawford Fund iv Acknowledgements v Foreword The Hon. John Kerin AM The Sir John Crawford Memorial Address 1 Food security in the Asian Century The Hon. Dr Craig Emerson MP Opening address 5 Opening Address Senator the Hon. Joe Ludwig Keynote addresses 9 Markets and development Dr Haruhiko Kuroda 14 The global rise and impact of supermarkets Professor Thomas Reardon Market and supermarket issues for development 30 Enhancing farmers’ capacity to link with markets Dr Dindo Campilan 37 From farm to fork: logistics, transport, infrastructure Richard D. Lovell 44 Women farmers and market access Rufina Peter 49 Competition between supermarkets and traditional food traders Dr Daniel Suryadama 58 Accessing export markets: a developing countries perspective Dr Stephen Mbithi Innovation and the value chain 66 Innovative successes through the value chain David Shearer Supermarkets — Good, bad or ugly? 73 An international retailer’s perspective John Glover 83 Power shifts in the Australian agrifood supply chain Dr David McKinna Implications for Australian and international food policy 88 The supermarket revolution and its causes Professor Allan Fels AO Conference overviews 105 Conference summary Dr Denis Blight AO Proceedings of the Crawford Fund 2011 Annual Parliamentary Conference iii Page no. Conference overviews continued 110 Q and A sessions Monday 15 August Tuesday 16 August 135 Delegates to the 2011 conference 141 Media coverage 2011 Acknowledgements The Crawford Fund wishes to thank the Chairs of the conference sessions, and the supporters and sponsors of the 2011 Annual Parliamentary Conference: The Hon. John Kerin AM, Chair, The Crawford Fund Mr Murray Proctor, First Assistant Secretary, Sector Policy Division, AusAID, and Australian Ambassador, HIV/AIDS The Hon. Margaret Reid AO, Board of Directors, The Crawford Fund Mr Keith Perrett, Chairman, Grains Research & Development Corporation Dr Joanne Daly, Stategic Adviser, Environment Group, CSIRO Dr Julian Cribb, Julian Cribb & Associates ACIAR (The Australian Centre for International Agricultural Research) AusAID (The Australian Agency for International Development) Australian Government Department of Agriculture, Fisheries and Forestry CSIRO Grains Research and Development Corporation Industrial Research Limited McKinna et al Strategic Insight Global Outloook Rural Industries Research and Development Corporation The University of Adelaide School of Economics and Waite Research Institute World Vegetable Centre iv The Supermarket Revolution in Food: Good, Bad or Ugly? Foreword The Crawford Fund’s first Parliamentary Conference was in 1993. We have re- assembled almost every year since to focus on vital food security issues. For 2011, the topic was somewhat outside the range of subjects of previous conferences. Past topics had usually lent themselves to analyses that pointed to the need for increased resources and production, mostly for biological research priorities. ‘The Supermarket Revolution in Food’, by contrast, was obviously about the operations of markets and food chains, and the program of speakers addressed a wide range of the issues impacting on markets and access to them. For this conference we were particularly fortunate to secure President Kuroda of the Asian Development Bank to provide a high-level overview of the issues of social and economic development facing the region — the context in which the supermarket revolution is taking place. We are grateful that he found time in his busy program to visit Australia at our request. We like to think that his visit is in recognition of the importance of the heritage of that other great economist, Sir John Crawford, whose mission, of research for development for poor people, the Crawford Fund seeks to encourage. Keynote speaker Professor Thomas Reardon, also an eminent economist, has authored much of the extensive socio-economic literature in refereed journals and has worked with CGIAR centres on the conference topic. This conference followed the Government’s response to the Independent Review of the Australian Aid Program, which gave high priority to investment in agricultural research and development. The Government is to be congratulated on the lead it has given in moving Australia’s aid budget towards a target of 0.5% of Gross Domestic Product by 2014–2015 and of allocating priority to research for food security for the rural and urban poor of the developing world. These sentiments continue to be a matter of bipartisan political support in Australia. The program of the conference included two Question and Answer sessions — opportunities to link issues of markets, research and new directions for the Australian aid program in response to the Aid Review. We were fortunate that the Hon. Margaret Reid, a former colleague, a member of the Aid Review Team and Chair of the Crawford Fund’s ACT Committee, was at the conference and part of the Monday Q and A panel to help with review questions. This conference produced numerous outcomes, including interesting and useful pointers to the way ahead for the agenda in international agricultural research. The Hon. John Kerin AM Chair, The Crawford Fund Proceedings of the Crawford Fund 2011 Annual Parliamentary Conference v SIR JOHN CRAWFORD MEMORIAL ADDRESS Food security in the Asian Century* The Hon. Dr Craig Emerson MP Minister for Trade Abstract This Sir John Crawford Memorial Address touches on aspects of the balance between demand for and supply of food, and on visionary approaches to food security that emphasise the importance of markets as well as production itself. Sir John Crawford had the vision of Australian economic integration with Asia. We need to draw on his vision and do the right thing by Australian farmers, the nation and the region by meeting the food security challenge head-on through rational economic policy making. The Sir John Crawford Memorial Address has been held since 1985, in honour of the distinguished Australian civil servant, educator and agriculturalist in whose name the Crawford Fund was established. Sir John was a remarkable Australian who contributed at the highest levels, and was a passionate supporter of international agricultural research for development. Sir John Crawford was a mentor of mine at The Australian National University when I was undertaking my PhD course under the supervision of another great Australian, Professor Ross Garnaut. Sir John was always available to give me guidance about positioning Australia to take its place in the Asian region. In delivering this oration just a day after returning from leading a 100-strong business mission to China, I am strongly aware of the boundless opportunities for further economic integration between our two countries. In the second decade of