Primary producers are faced with a "tilted playing field" when dealing with supermarket giants, with an inquiry hearing farmers are being forced to accept low purchasing prices for fruit and vegetables.
The conduct of grocery giants have come under the spotlight at a parliamentary committee examining supermarket prices, which got under way in Hobart on Thursday.
The inquiry comes as supermarkets have been under pressure for alleged price gouging as cost of living pressures increase and shopping bills go up.
The duopoly of Coles and Woolworths having large amounts of influence over prices being paid to farmers for products were majorly impacting the industry, said Jeremy Griffiths from the National Farmers Federation's horticultural council.
"At this stage, every grower in this country feels they have almost no choice but to accept the price that is put on the table," he told the inquiry.
"It's a very, very tilted playing field and this has had profound impacts for the entire sector."
Mr Griffiths used the appearance to call for the consumer watchdog to have powers to examine the data surrounding prices set by supermarkets for purchasing and selling produce.
The Australian Competition and Consumer Commission is undertaking a year-long inquiry into whether consumers are paying too much.
The federation member said the low prices set by supermarkets for the purchase of produce had led to many growers looking to quit the industry.
"The average age of every grower is getting way too old, because the next generation simply do not see a future in going into the agricultural sector, and that's a massive issue for the whole industry, and dare I say, the whole economy," Mr Griffiths said.
"The ideal policy solution is that you want policies in place to stop duopolies forming in the first place. Unfortunately, for us that boat has sailed."
Mr Griffiths told the inquiry the limited shelf life for fresh produce often meant growers were forced to accept prices offered by supermarkets.
"The growers are essentially flying blind because they only have the data that's in front of them," he said.
"The issue for our sector is our product's perishable. Once it's picked, once it's ripe, the clock starts ticking. If it's not sold within a certain time frame, it rots and it becomes worthless.
"The supermarkets are acutely aware of this issue, and it allows them to offer rock bottom ... and offer take it or leave it prices, knowing full well that the growers have almost no choice but to accept the price that is on the table."
Prime Minister Anthony Albanese has rejected calls for big stick divestiture powers to force compliance, likening such policies to the old Soviet Union.
Supermarkets played a vital role in Australian communities and the broader economy as they provided essential goods at competitive prices and employed hundreds of thousands of workers, the Business Council said.
Profits were important for a business to remain sustainable as "unprofitable companies do not invest and hire for long", it said.
Instead, there needed to be policies that tackled inflation and didn't add undue burdens and costs to businesses.
Woolworths, Coles, Metcash - the owners of IGA and Mitre 10 - and Aldi are already signatories to a code of conduct despite some calls to make it mandatory.
Coles has defended its prices, saying they're dependent on seasonal conditions and are a result of supply and demand, while Woolworths said it worked to strike the right balance between high quality produce and giving suppliers a fair price.
The inquiry will later hear from representatives from the Australian Beef Association and TasFarmers on issues they are experiencing with major supermarkets.
Australian Associated Press
