October 5th 2002

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Articles from this issue:

COVER STORY: Hurdles to the sell-off of Telstra

Queensland sugar protests grow

Turnbull contradicts Costello's new agenda

GERMANY: Floods, Iraq help Schroeder scrape back

STRAWS IN THE WIND: Goodbye to all that? Surely!

ECONOMICS: Globalisation: where is it going?

MEDIA: September 11: media's 'greed for tears' writ large

LETTERS: Vietnam commitment right (letter)

LETTERS: On our own terms (letter)

LETTERS: Democrats' suicide (letter)

LETTERS: Singapore (letter)

HISTORY: When we dead awaken

OBITUARY: Heroic Vietnamese cardinal Van Thuan dies in Rome

BOOKS:Demon of the Waters, by Gregory Gibson

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Queensland sugar protests grow

by Patrick J. Byrne

News Weekly, October 5, 2002
There is strong opposition from sugar cane farmers to the Federal and Queensland governments' package for the suffering sugar cane industry.

While more details of the package are gradually being released, rallies organised by a farmer action group with Bob Katter MP on the platform, have attacked the package and strongly supported an alternate eight-point plan for the industry.

According to Mrs Margaret Menzel, from a leading Burdekin region cane family and one of the action group members, "The government proposals are too little too late, and appear to be just another attempt at deregulation.

"First and foremost, the industry needs income relief for thousands of farmers who have had little income for several years due partly to bad seasons, but more due to the industry being forced by the Federal government in 1996 to deregulate and sell into the domestic market at the corrupt world sugar price, which has often been well below our cost of production. There is no adequate income relief in the proposed package.


"Since our first public meeting of farmers in Babinda, we have been inundated by farmers wanting to support the eight-point plan, without which the industry will not be returned to profitability. Farmers all along the Queensland coast have been asking us to run public meetings in their area to support the plan.

"A $30 income million relief package for 6,000 farmers amounts to $5,000 each whereas the industry income this year will be $600 million less than in 1994-95, despite producing the same amount of sugar.

"To date, the governments have not declared their support for keeping single desk selling of sugar. But there is a real fear this may happen.

"To surrender single desk selling would be the end of the industry. It would mean that food processors and retailers could bid down the price of sugar even lower than the corrupt world price. That would put the industry out of business.

"What's more, both governments need to understand that losing single desk selling would see the price of sugar bid downwards, undermining the benefits of the sugar levy they are proposing for the industry."

Meanwhile, the oil companies, sugar manufacturers and retailers have been waging a relentless media campaign against all aspects of the limited package so far announced by the Federal and Queensland governments.

For example, an editorial in the Australian Financial Review recently attacked the proposal to mandate an ethanol content in petrol. The editorial claimed that, as ethanol burned with less energy than petrol, "motorists would have to buy more and pay more for it."

This is simply not true. Ethanol by itself burns with one-third less energy than petrol. However, ethanol has a high oxygen content, such that when mixed with petrol it makes petrol burn more efficiently. So much so that the mix delivers the same power to a motor vehicle as petrol.

Further, by doing away with the need for some other fuel additives, the mix provides a cleaner burn with fewer toxic emissions.

Critics have also claimed that ethanol will increase the price of fuel to motorists. This is unlikely. Ethanol will replace other additives in petrol. To date, the oil companies have not revealed the current cost of additives to the customer.

Until recently, ethanol was exempt from the fuel excise. The government has now applied the excise and plans a "green rebate" to Australian ethanol producers, which is permitted under World Trade Organisation (WTO) rules.

This rebate has been misrepresented by the opponents of the ethanol proposal as a "production subsidy", which the opponents claim would be subject to challenge in the WTO.

Again, critics have attempted to undermine the ethanol package claiming it will not help sugar cane farmers greatly as most of Australia's current ethanol production comes from grain, not sugar cane product.

This claim is true, as far as it goes. What the critics have ignored is that a significant area of sugar cane farm land can produce crops other than cane, more suited to ethanol production. Some crops like sorghum are cheaper and easier to produce than cane and will allow cane farmers to restructure for an ethanol industry.

If the Federal government is prepared to mandate ethanol in fuel then it will provide significant economic benefits. It will give the banks an assurance that cane farmers have a future, allowing the banks to confidently extend credit to farmers again.

Ethanol is a vital organic base material for the chemical industry. Domestic production could save on imports of ethanol and boost the chemical industry.

The Federal Treasury will benefit from the fuel excise applied to ethanol and from the considerable company tax a profitable cane industry and ethanol industry will provide.

  • Pat Byrne

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