Grower reps explain choice and competition to Productivity Commission

Grower reps explain choice and competition to Productivity Commission
August 24 2016


Grower reps explain choice and competition to Productivity Commission

CANEGROWERS has appeared before the Productivity Commission’s public hearing in Brisbane today with serious and grave concerns about a recommendation relating to the sugar industry in a draft report on Regulation of Agriculture.

“While CANEGROWERS supports most of the recommendations, number 11.2 is flawed,” CANEGROWERS Chairman Paul Schembri said. “We reject it and its implications and it should be removed from the final report.”

“The Commission has obviously not fully understood the effects and likely impacts of the amendments to the Sugar Industry Act passed by the Queensland Parliament in December 2015.”

It’s a clear message that growers are passionate about and it will be reinforced by CANEGROWERS district offices at further Commission hearings tomorrow in Townsville.

“Those successful amendments do not provide for either the actual or potential introduction of new statutory marketing arrangements for the sugar industry as suggested in the Productivity Commission’s draft report,” Mr Schembri said. “Nor do the provisions re-regulate the international marketing of Australian sugar.”

“By formally recognising that growers have historically had an economic interest in the raw sugar produced from their cane, accepting the risks and rewards of the market along with millers, the Act actually completes the deregulation process by introducing contestability to the provision of marketing services,” Mr Schembri said. “Without the amendments, growers would be stuck in marketing monopoly run by their local miller.”

The amended Act ensures growers are free to nominate ANY provider of marketing services for their economic interest sugar – this could be services provided by the mill they supply, by the existing industry marketer QSL or in fact any other company that wants to operate in Queensland.

“Without competition businesses can become lazy or exploitative. Competition will make all sugar marketing service providers strive to continually improve their performance, lift productivity and lower costs,” Mr Schembri said.

“The only reason milling companies are continuing to lobby against these provisions is to protect their interests and attempt to stymie competition.

“It must be remembered that this situation, and the need for the Sugar Industry Act amendments, is entirely the result of the actions of three milling companies. When Wilmar, in April 2014 and without any reference to growers, decided to exit QSL it put at risk a marketing system that for decades had provided a sound platform for growers to invest strongly in our industry.”

Read the full CANEGROWERS submission to the draft Productivity Commission report on Regulation of Agriculture here: