Sugar code to stay

Sugar code of conduct retained


Agribusiness
The Sugar Code of Conduct will remain in place.

The Sugar Code of Conduct will remain in place.

Aa

The Sugar Code of Conduct will remain in place following a government review.

Aa

CANEGROWERS have welcomed the announcement that the Sugar Code of Conduct will be retained following a Federal Government review, but some are disappointed the code will not be strengthened.

Canegrowers Chairman and Mackay grower Paul Schembri said since the code was introduced in April 2017, it had helped to redress the imbalance of power that exists when growers and milling companies are negotiating.

“The distance between mills and the perishable nature of sugarcane once it is cut means growers cannot choose which milling company they supply with their crop and this puts mills in a powerful position,” Mr Schembri said.

“The code sits as a safety net in the background of our industry, preventing mills from abusing their monopoly in any district.

“No one in our industry should be fearful of this code - it requires that each party acts reasonably, fairly and honestly without intimidation and provides for an arbitration mechanism if there’s a deadlock.”

Working in parallel with the Queensland Sugar Industry Act, the code also supports competition in the provision of sugar marketing services.

“The code’s mechanisms for stability and security underpin grower confidence to continue to invest, to get on with the business of producing high quality export sugar for the global market and drive their regional economies,” Mr Schembri said.

Agriculture Minister David Littleproud and Dawson MP George Christensen on Wednesday announced the result of the review, which included 60 written submissions.

“The code came about to give sugar cane growers, millers and marketers certainty to just get on with the job and I’m happy to say it’s here to stay,” Mr Christensen said.

“Queensland is the powerhouse of the Australian sugar industry and produces 95 per cent of all sugar. If the sugar industry is strong Queensland is strong.”

Mr Littleproud said the government held public consultations across key sugar growing regions in Queensland and Northern NSW.

He said he brought forward the review, which was due to commence in October 2018, to July this year following the industry’s requests for certainty.

“This now provides certainty,” Mr Littleproud said.

“Public consultations were held in Gordonvale, Innisfail, Ingham, Ayr, Mackay, Bundaberg and Broadwater and with key stakeholders to make sure a range of views were heard.

“I acknowledge the sugar industry’s recent efforts in improving cooperation. I look forward to industry continuing to work together on the recommendation to develop a strategy to address the shared future challenges facing the industry.”

Capricornia MP Michelle Landry said the news was welcome in Mackay, where 47 per cent of the region is devoted to growing sugar cane, contributing over $460 million to the economy.

LNP Agriculture spokesman Tony Perrett also commended the decision.

“The decision is good news for Queensland cane growers as it provides a safety net against Labor’s impending moves to unwind state protections,” Mr Perrett said.

“The Federal Code alongside the State’s 2015 protections have helped to address the imbalance of power that exists between growers and milling companies.

But Hinchinbrook MP Nick Dametto said while he welcomed the retention of the code, he would like to have seen it strengthened.

”The overwhelming consensus amongst growers was always going to be that they wanted the code retained,” Mr Dametto said.

“There were several recommendations made by industry bodies and the Australian Competition and Consumer Commission (ACCC) to strengthen the code which were ignored by government.”

In their submission to the ACCC recommended placing an obligation upon mill operators to provide cane growers with choice in how a grower markets their economic interest in sugar produced by the mill operator.

Mr Dametto said it was particularly disappointing the government planned to include an amendment clarifying that pre-contractual arbitration only applies to raw sugar and not to any other products from sugar cane.

“That will effectively prevent growers from being able to negotiate value adding of their cane crop to millers and marketers instead of focusing entirely on the value of raw sugar,” he said.

“There’s been previous examples of growers making a small profit from things like sugar-derived molasses and a provision for this in the code would have provided a fairer price for the entire cane crop.”

The Australian Sugar Milling Council however, reacted with disappointment, saying they had called for the code to be repealed allowing industry to focus on commercial relationships and mechanisms to manage the production and marketing of sugar

ASMC CEO David Pietsch said they had asked for industry bodies to collaborate on the development of a whole-of-industry strategic plan, to provide a roadmap towards a more sustainable and profitable Australian sugar industry.

“Government had a chance to remove the code and drive confidence, build trust and encourage investment for the benefit of the entire supply chain,” Mr Pietsch said.

“Uncertainty is improved somewhat by the recommendation for pre-contract arbitration to apply only to raw sugar, but the Government has missed the opportunity to adopt a key recommendation of the review - namely to repeal the marketing choice provisions.”

Aa

From the front page

Sponsored by