SUGAR DEREGULATION: by Patrick J. ByrneNews Weekly
Beattie to abolish single selling-desk
, December 3, 2005
The Queensland Government's move to abolish single-desk marketing for sugar will greatly disadvantage canegrowers - the weakest group in the sugar supply chain, reports Pat Byrne.The Queensland Government has moved to abolish the single selling-desk for sugar, removing the last vestige of market power farmers had to gain a premium return on sugar produced from their cane.
The Bill to abolish the single-desk marketing agency, known as Queensland Sugar Limited, and to deregulate the market for sugar is expected to go before the Queensland Parliament as News Weekly
goes to press.
Losing the single desk means that, rather than QSL being the single marketing agency onto the domestic and world market, where its market power allows it to gain a premium price, Australian sugar-mills will compete with each other to sell their sugar into the same market. The effect will be to see mills bid down the price of sugar into Australia's traditional markets. Then farmers will receive less for their cane.Not required by NCP
Abolition of the single selling-desk was not required by the 1996 National Competition Policy review of the sugar industry. It found that there was a public benefit in keeping the desk, whose function was due for review in 2006-07.
But the Queensland Government has proceeded with deregulation, regardless. It has the joint support of the Milling Council, representing the sugar mills and, astonishingly, the Canegrowers Board, which is the largest farmer group in the industry.
In 2003, the board insisted that defending the single desk was "a die in the ditch" issue for farmers. But instead of a sustained campaign to defend the interests of its farmers, it has rolled over to deregulation.
With no arbitration system to guarantee farmers a fair price and no single desk, farmers - the weakest group in the sugar supply chain - stand to see their share of the sugar price diminish further.