19 October 2010: R&D booster for sugar: One-off fee a necessary impost say cane growers

The proposed one-off fee hike for sugarcane growers in 2011 is a big ask – but one that sugarcane growers across Queensland have said ‘has to happen’ to underpin the very future of the Australian sugar industry.

This was the overwhelming feedback from growers who attended the CANEGROWERS roadshow last week. Over 800 growers and stakeholders attended the 10 locally hosted forums, covering off on the big issues in sugarcane – from marketing to regulation to the new Ravensdown fertiliser offer. But the topics dominating the agenda were the more positive world sugar market in the next few years, the ability to capture better prices through forward selling options, and the biggest of all - rejuvenating the research and development (R&D) function of the industry.

Australia’s sugarcane industry enjoys an excellent reputation internationally, something it attributes to the resources it has invested into R&D over many years. But government funding for R&D in food production has been continually cut in recent years, and CANEGROWERS says reducing the industry’s lifeline to finding ways of ‘doing things better’ is incomprehensible if Australia is to retain its market edge.

The industry’s key R&D provider, BSES Limited, is heavily investing in GM sugarcane and SmartSett technologies which have the potential to yield significant benefits to the industry in the medium to long term. “It is forward-thinking strategies like these that have put Australia on the map - contributing to our international reputation as being at the cutting edge of raw sugar production. Our competitors are increasingly putting money into this area, and we must too, if we are to stay ahead of the game,” says CANEGROWERS CEO, Steve Greenwood.

In a forward thinking stance, the industry is embarking on a large scale rejuvenation of their entire R&D function. CANEGROWERS and ASMC have jointly commissioned a wholesale review into strategies for maximising the potential of BSES, SRDC and other research and extension providers to the industry. “We are directing a significant investment towards coming up with a new sustainable model,” says Greenwood.

The research review, already well under way, is being undertaken by independent specialist consulting firm Port Jackson Partners. It has been funded 50/50 by growers and millers – so critical does the industry collectively view protection of the very thing both groups are relying on to ensure a bright future for the Australian industry. “A full report detailing a restructured business and funding model to be progressively implemented is expected early next year,” says Greenwood.

In the meantime, the industry is looking at a much needed cash injection for cash-strapped R&D body BSES. Funding the sugarcane smut disease incursion response in addition to seasonal issues that have reduced crop size and resulting revenues has left the R&D provider with funding shortfalls. The industry has stepped up to bridge the gap. Mill owners, via ASMC, have committed an extra 10¢ per tonne, half to be levied in season 2010, the other half in 2011. After intense negotiation, CANEGROWERS conditionally agreed to an 20¢ per tonne additional contribution in the form of an increase in the BSES service fee next year, increasing the fee by 20¢ for one year only, in 2011

“This will keep the critical services provided by BSES going and ensure the DuPont GM joint venture can continue, before the review and full restructure can be rolled out,” says CANEGROWERS Chairman, Alf Cristaudo. “We are backing ourselves to the hilt. Make no mistake, R&D is critical to the future of our industry, and whilst a bitter pill to swallow, the industry is stepping up because it not only wants to survive, but thrive,” he says.

Media Comment: Steve Greenwood, CANEGROWERS CEO, 0488 721 156. Alf Cristaudo, CANEGROWERS Chairman, 0418 181 204.

Click here to download photo > Caption:  Peter Breguet (Queensland Sugar Limited), Matt Kealley (CANEGROWERS Environment Manager), Thomas Ballard (Czarnikow), Alan Wood (Czarnikow), Alf Cristaudo (CANEGROWERS Chairman), Steve Greenwood (CANEGROWERS CEO).