Sugar industry code of conduct to survive largely intact following review – ABC Rural
The Australian sugar industry will retain its code of conduct after the Federal Government agreed to accept a review, that found the code should remain in place.
The code, established in 2017 after a dispute over rights to choose a sugar marketer broke out among industry, will be reviewed again in four years.
Agriculture Minister David Littleproud made the announcement in Mackay, flanked by representatives from Canegrowers, the peak body for sugarcane farmers.
“The Australian Government has accepted all of the recommendations bar two in that review,” he said.
“Those we don’t accept is that the code should be extended for two years, and the grower marketing mechanism should be removed.
“We will also now extend the sugar code for four years, not two, we believe that we have to give the industry confidence and certainty.”
Millers address concerns
The Australian Sugar Milling Council (ASMC) represents eight separate mill owners, the largest of which are Thai-owned MSF Sugar, Australian-owned Mackay Sugar and Singaporean food conglomerate Wilmar.
It has vigorously opposed the code since it was announced, citing political considerations rather than commercial reasons as the push factor for governments.
CEO David Pietsch said the milling sector was disappointed by the Federal Government’s decision to reject two key recommendations from the review.
“Our members are certainly very frustrated at the Government’s response,” he said.
“Our fundamental position remains that there should be a repeal of the code of conduct, but as a next step of moving this industry on to a more commercial footing.”
Mr Pietsch refuted claims the decision would create certainty for industry, saying that low productivity growth and underinvestment was a concern.
With choice in marketing also guaranteed by the Federal Government, Mr Pietsch said the decision was short-sighted and lacked whole-of-industry understanding.
“We believe the Minister should adopt all the recommendations, and that includes the removal of the marketing provisions,” he said.
Peak body for Queensland’s sugarcane farmers, Canegrowers, has welcomed the decision, with chair Paul Schembri saying the code prevented an ‘imbalance of power.’
“The distance between mills and the perishable nature of sugarcane once it is cut means growers cannot choose which milling company they supply with their crop and this puts mills in a powerful position,” he said.
“The code sits as a safety net in the background of our industry, preventing mills from abusing their monopoly in any district.”
Canegrowers thanked the Australian Consumer and Competition Commission (ACCC) for its support of the code, as well as the Senate Rural and Regional Affairs and Transport References Committee which also backed the code.
Farmer Owen Menkens from Home Hill, 100 kilometres south east of Townsville, said the code gives certainty to the growing sector into the future.
Three-year rolling on-supply agreements are generally made between the farmer and the marketer of choice, which can be Queensland Sugar Limited (QSL) or a mill-owned entity.
“The code gave us some clarity and it allowed us to choose our marketer and stop the blockade that was happening between [miller] Wilmar and Queensland Sugar Limited.”
Mr Menkens said the four-year period of certainty allowed growers to plan the next cycle of cane supply agreements with the local mill.
“It gives us a few years to make sure we can bed down a proper contract. It’d be better if it’s longer, but four year is pretty good,” he said.