Singapore-owned Wilmar Sugar refuses to pay cane growers fair price.
Thanks to the Liberal National Party cane farmers cannot go to arbitration because the LNP removed the clause from Shane Knuth’s bill.
19 February 2017: KAP Federal Member for Kennedy, Bob Katter and State Member for Dalrymple, Shane Knuth MP today, in the Burdekin town of Ayr, attended a meeting with cane farmers to end the sugar marketing stalemate with Singaporean based company Wilmar.
In 2015 Mr Knuth introduced into the QLD Parliament the Sugar Industry (Real Choice in Marketing) Amendment Act 2015 giving an estimated 4,500 cane growing families choice in who they market with – the Bill passed with the support of the LNP and Independent Member for Cook. It was the second KAP Private Members Bill to become legislation and came within 24 hours of passing the ethanol mandate.
“The outcome of the meeting today still does not give clarity because there is no manoeuvre by the Federal Government to introduce a Code of Conduct,” Mr Knuth said.
“The numbers in the QLD Parliament have not been secured by the LNP, as yet, to get any amendments to the sugar marketing legislation. But as I did in the past when we drafted this legislation – working with the LNP and Canegrowers – we will be doing the same to ensure effective changes can take place,” Mr Knuth pledged.
Mr Katter whose electorate of Kennedy is highly reliant on sugar, was critical of the LNP for removing the final arbitration from the KAP legislation.
“The State representatives who were there today – we are only in this hole, without any cane supply agreements (no contracts between farmers and millers), because the LNP took out the clauses for final arbitration – where the referees decision is final. That was in there and the LNP took it out. We didn’t have the numbers without the LNP so it had to go through QLD Parliament without that clause,” Mr Katter said.
“With all of the QLD State LNP seats now in serious doubt and vulnerable to attacks from KAP and PHON, we might be able to get the QLD State LNP more scared of us than their corporate masters.
“George Christensen has crossed the floor on ethanol. His crossing the floor on ethanol was an act of very great courage and I think he has played a key role in convincing the Feds to stop them from intervening and overturning the sugar marketing legislation.
“The LNP today says ‘we believe in a competitive market and when it doesn’t work we intervene’. Fancy saying that when they (the LNP) introduced the deregulation.
“Statements about ‘we believe in competition setting the market price’. What an appalling statement! Do you believe the market sets the price of milk with only two buyers in there? Or the price of apples, bananas, oranges or sugar?
“The two giant supermarket chains set the market price. Sugar has a 400% mark-up on the price for refined sugar that the industry gets paid.
“Our second underlying problem is the world sugar market price is set by Brazil and they have over the last 16-17 years received $420 a tonne, and I doubt whether we have got $360 a tonne. We can’t survive on $360 a tonne average price.
“George Christensen no doubt was instrumental in getting the Deputy Prime Minister to stop any intervention from Canberra to overturn the Sugar Marketing legislation. Farmers and every worker in Australia should be entitled to arbitration. Thanks to KAP for introducing the legislation, at least one industry now has arbitration.
“We thank the Deputy Prime Minister for listening to George Christensen on this issue,” Mr Katter ended.
The shattering of the century-old sugar pool marketing mechanism is a direct result of the Labor and Liberal Governments allowing foreign ownership of vital industries.
The same can be said of the parlous state of the cattle industry where the processing sector is largely controlled by Brazilian interests. How much longer will primary producers allow the ‘farmer’s friend’ namely the National Party get away with allowing foreign ownership of our farms and food processing industries?
Charlie McKillop, Suzannah Baker and Craig Zonca
It’s a case of another day, and another major foreign-owned milling company pulling out of Queensland’s century-old sugar export pool.
Tully Sugar, under the ownership of the Chinese state-controlled COFCO group, has announced it will follow the lead of Wilmar and MFS Sugar in cutting ties with Queensland Sugar Limited (QSL) in 2017.
Industry lobby group Canegrowers has described the move as a ‘shattering blow’.
“It is a major body blow to our aspirations to hold together the single-desk,” said Canegrowers chairman Paul Schembri.
“It’s another example of milling multi-nationals who have snubbed their noses at Australian cane farmers,” Mr Schembri said.
“After all, those farmers have real sweat, real skin and real risk in this game.”
But Tully Sugar CEO Alick Osborne defends the move.
“We will be trying to provide services to growers that give them the choice of different products, and potentially different providers of those products, to be able to price their sugar effectively.
“We’ve made the difficult decision [because of] the uncertainty surrounding the future of QSL.”
Mr Osborne says he is confident that COFCO can offer growers competitive finance.
“They already market large volumes of sugar through offices in Hong Kong and in Beijing so we have the ability to tap into that network.
“We will absolutely make sure that our growers continue to have access to world market prices.”
Time for government action
Paul Schembri is unconvinced and wants the Federal and State governments to intervene.
“We believe there’s a commercial imbalance.
“We need to right a wrong and we need government involvement to sort this out,” Mr Schembri said.
Only a week ago, Canegrowers, millers and QSL attended a so-called ‘crisis meeting’ organised by the Queensland Agriculture Minister John McVeigh.
Mr Schembri is now calling on Mr McVeigh to take legislative action, rather than seeing the Minister become the ‘marriage counsellor’ for the industry.
“It could well be legislation that ensures growers have a right to a formal say about QSL and that grower economic interest is represented.”
“The mills might well be relying on a legal standing but I’d say this; ‘they don’t enjoy the support of growers’.”
Mackay Sugar says it will stick with QSL
Mackay Sugar is standing by its commitment to Queensland Sugar Limited (QSL) but has a ‘fallback plan’ which involves marketing sugar through a foreign owned co-operative.
Despite the ‘trend’ of the bigger millers pulling out their sugar, Mackay Sugar CEO Quinton Hildebrand says he’s convinced QSL remains the best option for the entire industry.
“We’re going to stay within QSL, we support the QSL model and on the strength of that we believe it serves our best interests to stay and give it the best chance that we can,” Mr Hildebrand said.
“We can push for our number one prize which would be an industry solution supporting QSL, we think it’s better not to fragment the industry.”
However, the miller is taking an each-way bet in the marketing game.
Earlier this year, Mackay Sugar joined with Brazilian sugar giant, Copersucar, to create a marketing arm which will sell the mill’s economic interest of sugar from 2017.
“We’re very fortunate to have a ‘first prize’ [staying with QSL] and then a fallback position, so that’s why we’re confident,” Mr Hildebrand said.
“We’ll be aligned with the world’s biggest marketer of sugar [Copersucar] and we’ll be in a strong position.”
Mackay Sugar will sell its one third share of sugar through the arrangement, and could possibly sell growers’ two thirds if QSL isn’t viable.
“If the industry is fragmented due to the actions of others we’re in a good position to compete with them on the world market [because of deal].”
22 May 2013: KAP Leader and Federal Member for Kennedy Bob Katter says the Qld Government would have been right at home in the days of the privateers following yesterdays revelations of a secret deal to deliver a foreign-owned corporation sole rights to sell Australias $1.7b raw sugar pool.
“Our ALP-LNP governments almost seem to support monopolies,” said Mr Katter following news reports on a confidential signed agreement for marketer Qld Sugar Ltd to contract out its sugar supply to multinational giant Wilmar.
“Government has failed to make any declaration against this outrageous proposal for Wilmar to take control of the single desk seller, which would give them total monopoly powers at the farm supply end and at the international retail end.
“The fact that it could even be discussed meant that it had to have tacit government approval from the LNP State Government.
“The government would have been at home in the days of the privateers of old, since they seem to be happy that the corporation is allowed to rape, pillage and enslave at will.”
Mr Katter said the secret deal behind growers backs makes infinitely more imperative initiatives such as the Pentland project* with Mackay Sugar, in order to put Australian farmers and co-operatives in a powerful position in the international marketplace.
Mr Katter said the fears of local farmers, that their economic interests would not be best served if foreign-owned millers operating in Australia also took control of their own marketing, had been demonstrated by the recent defection of Atherton Tablelands canegrowers from supplying their local foreign-owned miller Maryborough Sugar Factory (which sought to sell its sugar through its parent company rather than QSL) to choosing to instead supply the Australian-owned rival Mackay Sugar Co-operative Association.
“We praise our Mareeba sugar leaders on their strong stance in this situation, and strongly urge other growers around Queensland to take a leaf out of their book,” said Mr Katter.