Co-operate or perish

SPC-Ardmona has a long history in Australia. In the early 1920s Ardmona had began its life as a co-operative enterprise. SPC also began as a co-op in the 1900s. They merged to form a united co-operative enterprise in 2002. For a period the merged companies operated as a workers' co-op. But In 2005 SPC-Ardmona agreed to a takeover by the multi-national corporation, Coca-Cola Amatil.

Yet the high Australian dollar spelt disaster for SPC-Ardmona, as well as for fruit growers who could not compete with cheap imports. And those same pressures have had a devastating impact on other industries, including automobile production, agriculture, tourism and air travel, education, and manufacturing more broadly.

Here there are the usual arguments about free-trade, and letting the market guide us so as to focus on 'our economic strengths'.

But there are problems with the laissez-faire strategy.

Firstly, over the long term the high Australian dollar is probably an anomaly driven by the mining boom. Yet once these disadvantaged industries relocate it will likely be permanent. There will be tens of thousands of jobs lost in these industries, with approximately 6,000 to go as a consequence SPC-Ardmona's closure – directly and indirectly. Shepparton will be devastated.

Hence there are arguments for fixing the dollar temporarily – 'as an emergency measure'. Though the gains here need to be considered alongside the losses, and tightly targeted assistance may be a better policy than a 'scattergun' approach.

Furthermore there is an argument to the effect that food security is a matter of national security. A nation which cannot feed itself is dependent upon other nations for this most basic of needs. And as Australia's population grows domestic demand will grow – providing new opportunities

The Abbott Coalition government has no robust industry policy to rescue affected regions. And it has no interventionist industry policy to promote 'sunrise' industries more generally.

On the theme of assistance: In the course of the 2013 Federal Election, Rudd Labor had promised SPC-Ardmona $25 million in assistance to help with 'modernisation'. In the wake of the Federal Election loss, with the announcement of impending job losses at General Motors Holden, Labor also came out in favour of continued assistance for the car industry.

All this is better than letting strategic industries 'wither and die' without any plan for the future.

Importantly, there is a 'multiplier effect' to the Australian economy and specific regions - with many additional jobs lost when core manufacturing industries die or relocate.

And all those lost jobs result in falling tax revenues, the cost of which must be factored into the balance sheet when considering assistance.

This is why Labor has talked of assistance as a 'co-investment'.

But arguably there are better forms of 'co-investment' than a straight handout to multinational corporations.

Instead of providing a simple 'bailout' or 'grant' for the multi-national corporation, Coca-Cola Amatil, the Federal Government should make a $25 million genuine long term public co-investment – in tandem with the Victorian State Government, which could provide an additional $25 million. In this way the public could become a genuine stake-holder in SPC-Ardmona – helping to source the investment for the business to modernise and expand.

And crucially: such measures would be taken in partnership with the SPC-Ardmona workers. The Federal Government could provide a low-interest loan to the SPC workers, enabling them to reacquire the assets and the brand collectively, and run the business again as a democratic co-operative. Tax-breaks could also be applied over a transitional period: helping the restored co-op 'find its feet' again.

Potentially growers could also join in as part of this process of re-establishing and re-financing a co-operative enterprise. That is: SPC-Ardmona could form a united workers/farmers co-operative.

All this could be sustainable in a context where current wages and conditions continued to apply, but all dividends were directed for a period towards repaying the loan.

Importantly: As enterprises grow they generally need to source investment externally in order to fund expansion of production. This can be a problem for co-operative enterprise – as it gradually undermines the co-operative and democratic nature of such businesses. But with support from the Federal Government, an SPC-Ardmona co-operative could source passive investment from the public. And the workers affected could enjoy democratic control over their labours, and over the fruits of their labours.

Variants on the 'co-operative/co-investment' model could also apply in other strategically important sectors of the economy – for instance, automobile production.

And perhaps anti-dumping measures might also result in a 'fairer marketplace' for SPC-Ardmona.

But what the government should not do is to demand a grinding down of wages and conditions. Especially for workers already on below average wages. (ie: SPC workers receive in the vicinity of $50,000 a year). Apparently the Conservatives see intensifying exploitation as some kind of 'competitive panacea' to be imposed on us by militant employers.

There are better alternatives than this.