Millers reject threat of 'sugar strike' and more federal intervention as marketing divide deepens

31.01.2017

The Australian Sugar Milling Council has labelled talk of a 'sugar strike' as disappointing, and threats of more government intervention in the ongoing marketing dispute as 'unhelpful'.

His comments came as Deputy Prime Minister and Federal Agriculture Minister Barnaby Joyce warned he would intervene if the sugar agreements were not finalised.

Australian Sugar Milling Council chief executive Dominic Nolan said progress was being made in the commercial negotiations between the country's largest sugar producer, Wilmar, and its 1,500 or so growers in north Queensland.

Mr Nolan said the fact Wilmar remained the only milling company to not reach an agreement with growers or marketing company, Queensland Sugar Limited (QSL), was no reflection of a lack of effort or good will on its part.

He said, instead, blame should be attributed to the flawed legislation passed in the Queensland parliament more than one year ago.

"It has cost this industry millions of dollars in terms of negotiating new commercial arrangements.

"I don't think it's created any greater certainty, it has certainly been a disincentive for investment… and there's no surprise there are different drivers, different risk issues and business models and a different approach by milling companies.

"(But) all are opposed to the legislation. They were when it was passed, they still are but all of them want to get beyond the current challenges that we've had and get on with business."

With crushing season only 20 weeks away, growers in the cane districts of Herbert, Burdekin, Plane Creek and Proserpine who remain without a cane supply agreement with Wilmar are running out of time.

Canegrower representatives recently threatened some growers were willing to leave their cane in the paddock rather than be forced to sell their economic share of sugar through Wilmar (the default position should an on supply agreement not be reached with QSL).

    "I think talking about these sorts of extremes, about withholding cane supply is a very unfortunate tactic to be putting forward. I think that sort of an outcome is hugely detrimental to everybody," Mr Nolan said.

"There is no question we are in very challenging times... my understanding is that there is progress being made around commercial negotiations but these things can only be resolved at a regional level between growers and their mills and our great concern from the outset — and we certainly failed in terms of the Queensland legislation — is to keep government intervention out of it."

Barnaby Joyce reads the riot act but is Wilmar listening?

Growers are not the only ones losing patience at the Singaporean sugar giant's inability to break the impasse with its growers.

Deputy Prime Minister and Federal Agriculture Minister Barnaby Joyce has threatened "consequences" should Wilmar not act lawfully in its dealings with growers, an accusation the company's chairman Kuok Khoon Hong has refuted.

Mr Joyce said he met with Wilmar executives late last year to advise he was "fair dinkum" about pursuing a mandatory 'Code of Conduct' in the sugar industry, an option that has been unpopular with some of his LNP colleagues.

He said even if it meant making it "a condition of the Coalition" agreement between the Federal Liberal and National parliamentary parties, he was determined to do it.

"We can raise the bar if we want to but we'll raise the bar way beyond, way beyond, where you would be if you actually fixed it up yourself and (Wilmar) have had the discussion and know how to do that.

    "If this thing is not resolved, if I have to continually have briefs come across my desk, I will move and when I do, you won't get in my office, you won't get in my door to complain about what I'm doing because basically I'm sick of having the discussions trying to get people to move and they're not moving so I'll just move myself."

Peak body, Canegrowers Queensland, also has welcomed the Australian Competition and Consumer Commission's proposed approval for growers to be able to collectively bargain with mill owners and marketers, including a seat at the table during on supply negotiations.

But Mr Nolan said that interpretation of the ACCC draft determination was wrong and premature, with an "pre-decision conference" set down for next week between all parties to deal with submissions on the proposed ruling.

Wilmar Australia declined to be interviewed, but in a statement indicated the company was focussed on working through outstanding issues with QSL with several meetings in the past fortnight.

It said individual agreements and temporary pricing arrangements had also been offered so there was "no reason for any grower to be without a cane supply agreement or access to forward pricing".


abc

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