Farmers could benefit from a return to collective bargaining, according to a report by Australia's Rural Industries Research and Development Corporation (RIRDC).

The Australian Broadcasting Corporation's report was released on Tuesday to inform the co-operatives of a pilot program in the Federal Government's recent Agriculture Competitiveness White Paper.

Professor William van Caenegem from Bond University in Queensland led the collective bargaining research, saying opportunities to collaborate existed for medium-sized farms in particular.

"While a majority of Australian agricultural output is produced by the top 25 percent of farms, there is a real untapped opportunity for medium-sized farms to collaborate and increase the importance of their contribution to Australian agriculture," he said.

Farmers in Europe, the United States and New Zealand have a history of collective action, but Australian co-operatives have declined due to economic, socio-cultural, structural and legal factors, the report stated.

"Competitive farmers who see that they are doing a really good job in their farm business tend to be somewhat reluctant to throw in their lot with their neighbors who sometimes they perceive as being less effective than them," Professor van Caenegem said.

"There's also an aspect of some element of disillusionment with the level of managerial skill and the difficulties in generating enough capital with traditional co-operatives, but that obviously has had the detrimental effect of reducing their bargaining power with the big players."

"If growers can get together and agree on quality standards and agree on the kind of volumes they can produce, then they are in a good position to deal for instance with a supermarket. We found that it's something that can really work well for both sides."