Qld Government steps into sugar marketing stoush in support of compromise and choice for growers

http://www.abc.net.au/news/2014-07-15/nrn-mcveigh-sugar-marketing-approach/5598860

July 15, 2014 at 11:06 AM


Last month John McVeigh offered to work as 'marriage councillor' to feuding sugar millers, trying to coax them into an industry compromise that would not jeopardise the future of the single marketing desk, Queensland Sugar Limited.

However foreign owned millers, Wilmar, MSF and Tully, have stood by their decisions to withdraw the lion's share of sugar from QSL from 2017.

It's a move that's left QSL with a dramatically reduced pool of sugar and a question mark over the future of Australia's last agricultural single-desk system.

 

Canegrowers have lobbied that growers should have a choice about how their sugar is marketed, either through their miller or elsewhere.

The Government has now launched a 'three-pronged approach' in an attempt to give cane growers that choice, essentially helping to guarantee QSL's future.

Mr McVeigh says the plan is also investigating what some have labelled 'competition concerns' in the industry.

He says the Government will formally request action by the Federal Government under federal competition and consumer law provisions.

The second part of the plan involves the State's agriculture committee looking to preserve 'grower choice' under the existing Sugar Industry Act.

"It's been known as the 'grower's choice' provision, in other words the growers being able to chose where their sugar is marketed," said Mr McVeigh.

However the mills argue the sugar is theirs to market.

Minister McVeigh has ruled out changing legislation to guarantee growers' title over their two-thirds share of the sugar that goes through the mill.

"We have said that new legislation is not something that the State Government, from a state perspective, would be keen on.

"We do recognise that there is an existing Sugar Industry Act 1999, which already outlines very clearly that there needs to be a supply agreement between growers and millers.

"We are simply looking at options within that Act to preserve the traditional practice; the customary approach of growers being able to nominate how their two-third economic interest of the sugar is marketed."

He says the third part of the 'new approach' is to get industry leaders back to the table to reach a compromise.

The last attempt failed but Mr McVeigh says the Government will persist.

"As Queensland Minister of Agriculture, as a representative of the government in relation to the sugar industry, I can either sit by and do nothing, or we can roll our sleeves up and exhaust all options."

Meantime, Queensland Sugar Limited remains optimistic despite now having just 600,000 tonnes of sugar locked in beyond the 2016 season.

 

CEO Greg Beashel says QSL's future is 'now certain'.

"We've got Isis Sugar Mill, Bundaberg Sugar and Mackay Sugar all choosing to renew their arrangements with us for the 2017 season.

"We see it as a vote of confidence."

Mr Beashel denies that Mackay Sugar's link with the world’s largest sugar exporter, Copersucar, will be detrimental.

"That sugar still flows through QSL, so we're quite pleased with that arrangement.

"The free market's got to be allowed to work."

 

Mackay Sugar's CEO Quinton Hildebrand has conceded the company's fallback plan of selling through Copersucar may need to be adopted more broadly by QSL and the remaining pool participants.

But Greg Beashel won't be drawn into a 'hypothetical' scenario.

"I think the first thing we've got to resolve is happening with grower economic interest sugar and whether a grower choice model can be agreed to and implemented in the industry.

"As far as placing that sugar, and which parts of the sugar market trade we work with to do that, that's a second step in the question about how we work from going forward from 2017 season."

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