AUSTRALIA'S grocery prices have increased more than almost any other developed nation in the past decade.
And critics have blamed the supermarket duopoly of Coles and Woolworths.
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Grocery prices have risen nearly 40 per cent in Australia since the beginning of 2000, compared with 27.5 per cent in the US and 26.3 per cent in the UK.
Yet many farmers are receiving similar prices for their produce now as in 1999.
In 2001, potatoes were selling for $350 a tonne at the farm gate, compared with $350-$400/tonne this year.
ABS figures show the average price for oranges in 2001 was $500/tonne. This year, prices varied from $80 to $360/tonne, according to an industry source.
University of NSW consumer law specialist Frank Zumbo said the duopoly was the "only reason left standing" for the increases.
"It's a simple economic principle: fewer (competitors) equal higher prices," Prof Zumbo said.
"Where they act as a cosy club, there is no incentive to compete on price ... dropping prices only cuts their profit margins."
Prof Zumbo said New Zealand, which also had a duopoly, had experienced similar price increases.
He said supermarkets imported and so were "pretty much drought- proof".
"If budgets aren't tight, consumers ... tend to favour convenience over price," the report said.
However, it conceded lack of supermarket competition could be a factor.
But a spokesman for Coles pointed to a 54 per cent increase in private sector wages as a major contributor to food-price inflation.
The spokesman also said Coles' profit margin for food items was "three cents in the dollar, so we can hardly be blamed for pushing up prices".
Chris Davison, of Morgiana Beef Composites, at Freshwater Creek, said more competition in the retail sector was needed to ensure long-term food security.
"When the Government declares that 'they will do what is required to ensure competition in the market place', does this suggest that they are going to rein in the power of the two big supermarkets, or are they just going to allow more cheap food to be imported into Australia?" Mr Davison said.
"Most primary producers have lost confidence in the political system to address the major issues.
"We feel powerless, marginalised and isolated."
However, Meat and Livestock Australia chief market analyst Peter Weeks said retail price increases reflected inflation and hadn't increased significantly in real terms.
He said rising costs in the supply chain had added to retail costs, while on-farm productivity improvements had constrained farm-gate prices, especially for beef.
A Woolworths spokesman said deflation of prices in the past 12 months had enabled the supermarket chain to pass on some savings to consumers.
