BIG READ: Report calls for grower choice to be axed
ONE year after legislation was introduced guaranteeing cane growers choice in who markets their sugar, a draft Productivity Commission report has recommend having the law repealed.
Some sugar industry stakeholders now fear that if the recommendation is retained in the report's final version next year, it may spur the State Government, which always opposed the law, to action.
Mackay Canegrowers chief executive officer Kerry Latter said this idea was particularly concerning given the looming state election.
He said if the Labor government held larger numbers in Parliament following this next election it could act on the recommendation and have the law jettisoned.
On November 15 a Productivity Commissions inquiry report into Regulations in Agriculture was handed to the Federal Government, after public submissions into the draft report were collected.
The Federal Government will now have 25 sitting days to table the report in Parliament before the final report is released.
This is when stakeholders will rush to see whether it includes recommendation 11.2 - that the Sugar Industry (Real Choice in Marketing) Amendment Act 2015 is repealed.
The Act was introduced last December, to ensure growers could choose who marketed their sugar.
Although the State Government did not support the Act, it was passed after attracting support from the LNP, the KAP and independent MP Billy Gordon.
It was widely celebrated by the cane growing community and has since allowed growers who supply MSF Sugar, at the Atherton Tableland, Mulgrave, South Johnstone and Maryborough, to choose Queensland Sugar Limited to market their sugar, even if MSF Sugar mills it.
But negotiations between QSL and other mills, predominately Wilmar, regarding the on-supply agreements underpinning this choice reached a stalemate.
However, following a meeting between deputy Prime Minister Barnaby Joyce and Wilmar representatives last week, it is believed these talks may soon gain headway.
Otherwise, it is believed the Federal Government will introduce a code of conduct that would compel the contracts to be finalised.
Regardless, Mr Latter penned a submission urging the Productivity Commission to remove the recommendation when it hands down it's final report early next year.
"Our industry has serious and grave concerns about the conclusions drawn in your draft report with respect to regulation of sugar marketing in Queensland," Mr Latter said.
Wilmar wrote a submission welcoming the recommendation.
It also said that because of the law it had deferred investing in many significant projects and gave a number of examples.
"In December 2015, within days of the Act becoming law, and as a direct result of the uncertainty created by the legislation, Wilmar suspended planning for a new $75million, 500,000 tonne sugar storage facility for north Queensland - a project that could have improved revenue prospects for both grower and miller," it's submission stated.
Division continues to centre on whether or not the law is "anti-competitive".
While supporters of the Act argue that ensuring growers choice heightens competition in the sugar industry, its opponents argue that legislating a requirement for choice is in itself anti-competitive.
State Agriculture Minister Bill Byrne said on Saturday the State Government still opposed the legislation.
However, when asked if he would fight to have the law repealed, he offered nothing other than "our position has not changed".
State Member for Mackay Julieanne Gilbert said all the Act had achieved so far was to "drive a wedge between millers and growers".
But she said any push to do away with the law would depend on "what the industry wanted".
"We need to see how it plays out. We can't just keep swapping legislation around," she said.
Federal Member for Dawson George Christensen said the Productivity Commission had been wrong to suggest getting rid of the Act.
"They're wrong. It appears the only information they have come up with is from the sugar milling lobby," he said.
While he noted the Productivity Commission was an advisory body, he conceded that maintaining the recommendation may inspire the State Government to action following the next election.
"That is why I'm hopeful the Productivity Commission will jettison that recommendation," he said.
"You get productivity from competing interests. That's why it's very bizarre (it would recommend a repeal)."
A final report will be delivered in February or March next year.