THE Australian Competition and Consumer Commission is set to allow cane farmers to collectively bargain cane supply and related contracts with millers and sugar marketers.
In response to a request from the ACCC, CANEGROWERS clarified that the proposed collective negotiations would be conducted by local CANEGROWERS organisations on behalf of growers supplying cane to their local sugar miller.
CANEGROWERS also intends to share information with growers across growing regions about common cane supply issues. CANEGROWERS also confirmed that it did not intend to negotiate a single, state-wide cane supply agreement.
ACCC commissioner Mick Keogh said the competition regulator had approved many collective bargaining arrangements involving groups of farmers supplying their local processor.
“This is another matter where collective bargaining can provide an opportunity for growers, millers and sugar marketers to negotiate mutually beneficial contracts,” Mr Keogh said.
“The proposed arrangements are likely to result in public benefits from transaction cost savings, by facilitating more effective and timely grower input into negotiations with mill owners.”
Mr Keogh said under the current industry framework where growers had a right to choose a marketer for their ‘grower economic interest’ (or GEI) sugar, the ACCC also considered there were benefits in allowing growers to collectively bargain with mill owners and marketers over terms relating to cane supply and the marketing of GEI sugar.
“This is likely to facilitate grower choice, and therefore competition, when growers choose GEI sugar marketing services,” Mr Keogh said.
“The ACCC does not consider that the proposed arrangements are likely to result in significant public detriment given that collective negotiations are voluntary for growers, millers and marketers and will continue to reflect regional differences.”
The ACCC is now seeking submissions from interested parties in relation to its draft determination before making a final decision, expected by March 2017.
Since 1999, the Sugar Industry Act in Queensland has allowed cane growers to collectively bargain certain terms and conditions of their Cane Supply Agreements with their local mill.
