Sugar Package (letter)by C.J. Mackee and Dawn B. BrownNews Weekly
, July 17, 2004
De-Anne Kelly disputes Pat Byrne's claim in News Weekly
(May 22), that the Federal Government's $444 million sugar package had nothing to do with the Sugar Industry Reform Committee's two-year campaign for the industry.
Mrs Kelly says that the SIRC was nowhere to be seen when John Anderson won the day on price support for the industry. Mrs Kelly's claim is wrong.
The SIRC rallied 4,000 out of 6,500 cane farmers to an eight-point plan for the industry, and with farmers' support ran a prolonged campaign that made sugar a national issue.
This drove the Federal Government to produce a package for the industry or face the possibility of losing the sugar seats, as many political analysts have warned over the past 18 months in the national media.
The sustainability grant is the one helpful aspect of the package, but it needs to be put in context. First, it is only for one year, clearly designed to tide the Coalition over the Federal election.
Second, the sustainability grant doesn't even compensate for the abolition of the cane production area (CPA) licences. These were bought and sold with the farm and were our licence to grow cane.
Valued at 20% of a farm's value, they were recently abolished without compensation as a result of the Memorandum of Understanding (part of National Competition Policy) signed between the Federal and Queensland governments in 2002. The CPA's had been used by the banks as collateral when farmers purchased their farms.
Further, none of the real long-term industry solutions, as described by Pat Byrne, were addressed in the package. In particular, the Federal Government has refused to move on mandating ethanol in fuel.
There are other problems with the package.
Nowhere does Mrs Kelly mention the components of the package that are taxed, asset tested or have GST added.
The restructure grants of up to $7,500 per year for two years for farmers staying in the industry is an insignificant amount when it comes to diversifying and doing significant works on farm. To access most parts of the package, farmers must
show they have a costly business plan.
The package does not give families real choices to make for the future, as it appears the criteria for intergenerational transfers is too difficult and will not overcome inherent problems.
In fact, the Government policies are backfiring to the extent that young people are now leaving the farm, selling or leasing or pleading with their parents to take the farm back so that they can re-educate themselves or find other work.
The whole issue of farm debt was never considered and many young farmers can no longer bear the strain. Farmers who have bank debts don't want to pass these debts on to their children.
If the package had provided farmers a price into the domestic market and mandated ethanol, it would have addressed most of the problems within the industry, including retirement and intergeneration transfers, as profitable farms can pay their bank debt and have a commercial value.
But the sustainability grant has not gone far enough to assist in diversification and value adding. A lot of farmers will never see this money as the banks will be claiming it.
There are so many restrictions on that part of the Federal package aimed at farmers that we believe half of it will never be delivered.
While Canegrowers' leaders slept, both State and Federal governments were fed mistruths by multinational sugar milling giant CSR about farmers having to become more productive, being like Brazil etc. CSR has continually told Federal and State governments that farmers were to blame for the industry's problems, creating a smokescreen to hide their antiquated equipment and their failure to update their own mills, which are now 20 years behind Brazilian sugar mill technology.
It is a national disgrace to see farmers who have been in business all their lives, who have developed cutting edge farming technology, reduced to peasant status because of the Federal and State governments adherence to economic rationalist policies.C.J. Mackee, Dawn B. Brown,