AGRICULTURE: by Patrick J. ByrneNews Weekly
Factory closure linked to stalled sugar reforms
, July 12, 2003
Last week the Industry Guidance Group (IGG) appointed by the Federal Government to recommend reform plans for the sugar industry was due to sign off on an agreed strategy.
However, it is widely believed that a sizable number of the IGG have not signed off on the plan, as they believe it will be detrimental to the industry.
The IGG is a 16-person committee made up of 12 people from within the industry and four from outside it.
The Federal Government had made its $150 million sugar industry package conditional on the Queensland Government legislating to deregulate the industry, and on the IGG agreeing to an industry reform plan.Current status
Given the dissent within the IGG, it is not clear where the whole deregulation process now stands.
Meanwhile, indicative of the current state of the sugar industry, New Holland industries has announced the closure of its Austoft cane harvester manufacturing plant in Bundaberg, costing 200 jobs.
The factory is to relocate in Brazil, Australia's largest sugar competitor.
Investment in the Australian sugar industry has collapsed.
Up until five years ago, the industry was annually buying 160 new cane harvesters from the three harvester producers Case, Austoft and Cameco.
In 2001, 15 new harvesters were sold. In 2002, only 9 were sold. In 2003, so far less than 20 have been sold. The slight upturn this year is only because of the rundown of old harvesters.
Policy formation for the sugar industry has suffered from seriously flawed research by a number of consultancies and inquiries.
All have recommended deregulation, yet none has seriously analysed the future international price trends for sugar, which require sophisticated econometric analysis, or properly analysed the future cane production plans of Brazil, the world's largest sugar exporter.
How can proper policy be formed unless such hard analysis is demanded by policy makers in government?