Govt to investigate sugar 'debacle'

According to Mr McVeigh, the decision of three dominant sugar millers – Wilmar, MSF and Tully Mills – to ignore long-held canegrower preferences for the industry-owned and not-for-profit marketer Queensland Sugar Limited (QSL) to maintain a marketing monopoly has created unprecedented angst in the industry.

The government is investigating potential legislative solutions to the rift, and calling on all sectors of the industry to step up their own efforts to reach resolution.

Mr McVeigh will also write to Federal Treasurer Hockey to formally request action by the federal government under the Federal Competition and Consumer Act.

“The decision of three, major internationally-owned millers to withdraw from QSL… threatens to place cane farmers in a weakened negotiating position in the future,” Mr McVeigh said.

“Their presence and investment in the industry is welcome, but their apparent disregard for long-held industry practices and understandings is of great concern.”

Mr McVeigh said the Queensland government had also referred the issue to the Agricultural Cabinet Committee to investigate if the traditional practice of growers choosing where their economic interest in the sugar is marketed could be preserved in the current Sugar Industry Act 1999.

“This is about the possibility of ensuring growers a choice in marketing. It’s not about re-regulating the sugar industry, it’s simply preserving a right that gives cane farmers a choice in who markets their sugar,” he said.

The Australian Sugar Milling Council and its members, Canegrowers and Australian Cane Farmers Association (ACFA), will be called to make submissions and present to the Ag Cabinet Committee.

Canegrowers chairman Paul Schembri said the organisation applauded the state government’s decision, as the current marketing debacle had “severely knocked around the growers’ confidence” to invest in the industry.

“This is an important step forward and we will work closely with every section of government to arrive at a solution which will rectify the potential for catastrophic market failure,” he said.

“We will be giving everything we have to getting a legislative solution bedded down as soon as possible.

“Let me be clear: we are not seeking a return to full regulation, but a set of legislative changes which would retain competition and choice for growers in a situation where the actions of large multinational corporates with regional mill monopolies could take that very basic right away.

“We are fully committed to work strongly and actively with the government and every section of the growing and milling community to reach a long term solution which works for all parties. We call on all parties to do the same in good faith.”