1,500 Queensland farmers with lives and businesses on hold

1,500 Queensland farmers with lives and businesses on hold
February 1 2017

1,500 Queensland farmers with lives and businesses on hold

Peak sugarcane farming organisation CANEGROWERS is urging Wilmar Sugar, QSL, the Queensland Government and the community to remember that 1,500 mostly family farming businesses are at the heart of the current impasse over contracts for the 2017 season.

“This is not just about contracts and sugar marketing, this is about families. It’s about the small businesses contributing to the economies of Queensland’s regional areas, that supply the eight Wilmar sugar mills,” CEO Dan Galligan said. “Without them, their hard work and capital, there is no sugar industry in Queensland. This drawn-out process is taking its toll.”

In April 2014 Wilmar Sugar pulled the rug out from under growers by deciding to force them to market their economic interest sugar through its own channels – cutting them off from the industry-owned not-for-profit marketing company QSL.

While legislation to preserve competition in sugar marketing and choice for growers passed the Queensland Parliament in December 2015, Wilmar Sugar is yet to finalise agreements for the harvesting season due to start in less than 20 weeks.

Burdekin growers Aaron Linton (right) and his wife Amy have had their farm, south of Townsville, for just over six years and are very worried.

“We fear that in June we won’t have a contract, we’ll be needing to cut cane and Wilmar is expecting us to give in to their terms because we have no option,” Aaron says. “We will try to hold off until the bank tells us we can’t any longer.

“We have mortgages and bills that need to be paid and a young family that we need to feed. It’s not just for one year but for the next 20 to 30 years, we’re in this for the long term and are trying to see the big picture.

“We shouldn’t be forced into a position where the Wilmar offering is all we can take. For the 2016 season, their marketing and pool price offer was $100 less per tonne than QSL.

“We’re worried that if we sign the deal directly with Wilmar to do our marketing, we will never know how much we are losing and who is taking the profits – there’s nothing to stop them selling to their own refineries for whatever price they like.”

Joe Grottelli (left) farms 485 hectares near Ingham in the Herbert River district with his parents and brother.

“We’ve invested $4 million over the past five years expanding our business and upgrading the farms we’ve bought,” he says. “It makes my blood boil that the focus has all been on miller investment in the sugar industry but growers take on a bigger risk and, proportionally, sink a lot more into their businesses.”

“Without a contract, we have no guarantee of return on what we’ve spent so we’ve put a stop to it. We won’t be doing any more significant investment until there’s a decent outcome,” Joe says.

“Mentally this situation does get you down, it is affecting us personally, but we have to run our business and find the best outcome in the scenario that we’re faced with. For us, that means looking at growing other crops because we have to remain profitable.”

Brian Stevens (right), who sends cane to the Plane Creek mill at Sarina, says that  after 54 years growing sugarcane farmers around him are losing heart.

“These are very stressful times,” Brian says. “Growers are disappointed, despondent and disgusted.

“Banks are starting to get toey because growers don’t have a contract to underpin their financial position this year.

“All of our money is invested in this year’s crop, we’ve taken a big risk with it but we are absolutely determined that we won’t let Wilmar walk over us.”

He says one of the long-term impacts is the loss of trust between growers and the miller.

“When two parties are dependent on each other, some trust is needed but it’s dissipated in this current dispute.”

Joe Grottelli agrees and, like many growers, he is not providing Wilmar with his crop estimates.

“I’ve got about 10 emails sitting there from Wilmar asking me for farm maps for the next 12 months but we have no agreement so why should I be telling them how much cane I have – it’s got nothing to do with them at this stage.”

“Sugar is a $2 billion a year industry for Australia and a significant proportion of it is at risk because key agreements are not finalised,” Mr Galligan said.

“Cane Supply Agreements for our members can’t be concluded until Wilmar Sugar and QSL reach an On-Supply Agreement (OSA). That OSA is now the critical thing. Without that, there is no marketing choice for growers.”

In a bid to resolve the current deadlock, CANEGROWERS has invited Wilmar Sugar and QSL to a three-way meeting.

“We keep our growers, their families and businesses, at the forefront of everything we do at CANEGROWERS,” Mr Galligan said.

“Ensuring choice in marketing is the best way to counter Wilmar’s regional milling and marketing monopoly power and ensure growers can invest in their farms, their businesses, with confidence for the long term good of our industry.”