Queensland National Party moves to stop sugar deregulationby Patrick J. ByrneNews Weekly
, May 3, 2003
Eight months of protest by sugar cane farmers have stalled moves to deregulate the Queensland sugar industry.
Now the National Party state member for Hinchinbrook, Marc Rowell, has moved a Private Member's Bill aimed at halting deregulation by freeing-up some Queensland sugar industry practices and providing avenues for sugar cane growers to be released from the obligatory arrangement of using their product only for the manufacture of crystal sugar.
Regulation of the industry is by Queensland's Sugar Act. One of the arguments for deregulation of the industry is that the Act required farmers to sell their cane to sugar mills only for the production of sugar, preventing them from using sugar cane for other potentially higher value added products like ethanol, sweet juices, drinks and medicines.
While it is not strictly true that the Act prevented such industry diversification, the Bill will clarify the situation by allowing individuals to apply to Queensland Sugar Limited (QSL), the statutory marketing authority for sugar, to produce products other than sugar.
Applicants may seek exemptions for a certain period or indefinitely, depending on the particular venture that is proposed.
The Bill also tackles the issue which has frustrated cane growers since 1996 when the then Queensland National Party Government, under National Competition policy, introduced what is known as a "Ministerial Directive" that commanded QSL to sell all sugar for domestic consumption at the ruling world price on the New York Coffee, Cocoa and Sugar Exchange plus the value of any regional premiums. On the change of Government, Labor continued the practice.
The result of this action is that Queensland growers and sugar millers have been receiving a "dumped" sugar price for domestic sales. Yet, high levels of subsidies paid to sugar producers, especially in the EU and USA and some other nations, has created a world sugar surplus which is financially detrimental to producers from other countries, especially Australia.
The Bill also addresses two other problems.
First, under current legislation, the owner of a sugar mill can close it without any prior notice to growers of cane which is supplied to the mill. Mr Rowell's proposal will make it compulsory for a mill owner to notify every grower whose lands are attached to his mill, to give notice not later than May 1 in any year that he intends to close the mill after the next harvest. This arrangement will ensure that the growers are given the opportunity to harvest their standing crops and are not left with production which no one wants and which the growers could not otherwise sell.
Second, farmers are paid for their cane up to a year after their cane is harvested and distilled into sugar, when the sugar is finally sold. Should a mill close in that time, the farmers become unsecured creditors.
The Bill proposes that each grower will have a charge on the payment made by the sugar marketing authority, Queensland Sugar Limited, and the growers payment would be secured through the payment provisions of his contract with the mill.