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Chairman’s comment
SECTION 6 AUSTRALIAN CANE FARMERS 2019 This section brought to you in association with
Don Murday, Chairman.
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n By Don Murday – ACFA Chairman
THE past year has been another eventful one with developments on many fronts, including unfavourable weather, sugar markets and yet more reef regulations. We have also seen the sale of three former growerowned sugar mills – two now exiting majority grower ownership and one re-entering. These sales reflect decades of the erosion of profitability, mostly due to subsidised sugar flooding the export market. The World Trade Organisation and multiple Free Trade Agreements have not been able to resolve the issue of producer support in the world’s sugar industries. With most of Australia’s sugar destined for export markets, our unsubsidised farmers and millers can do little more than play the agonising role of spectators to a spectacle of corruption and drawn-out legal processes.
WTO dispute
Late 2018, the Global Sugar Alliance called on governments to take action in the WTO to initiate formal actions against Indian sugar subsidies.
Australia’s counter‐notification of India’s illegal sugar subsidies, lodged in the World Trade Organisation (WTO) and supported by thirteen WTO Members increased global pressure on India to bring its sugar policies back into line with WTO rules and its commitments.
Australia, Brazil and Guatemala jointly lodged a request with the World Trade Organisation’s Dispute Settlement Body to establish a WTO Panel to investigate and rule on whether India’s high sugarcane prices and export subsidies exceed its WTO obligations.
Seeking a WTO Panel was an important escalation of the issue first raised by Australia in 2018 and follows failed consultations with India earlier in 2019. It was the next step in bringing India to account for its trade-distorting sugar policies, which have driven down global sugar prices and adversely impacted the livelihoods of Queensland’s cane farmers and sugar mills, and the regional communities they support. The action has the strong support of all sectors of the Australian sugar industry. The request for a Dispute Panel was to be discussed on July 22, 2019 at the WTO Dispute Settlement Body Meeting.
Then, astonishingly, on August 29, the Indian government approved an export subsidy of AU$216 per tonne, totalling AU$1.3 billion, to assist its sugar industry to export more than 6 million tonnes over the next year.
India, in eight of the past 10 years, has produced a quantity of sugar in excess of its domestic requirements. This is mostly due to its regulated cane prices.
India’s high cost sugar producers require generous export subsidies to compete with lowcost exporters like Australia.
Indian raw sugar production is expected to be around 29–30.5 million tonnes in 2019–20 while its domestic raw sugar consumption requirements are approximately 26 to 27.5 million tonnes.
Market information suggests that India is currently holding over 14 million tonnes of raw sugar in storage.
Reef regulations
In February 2019 the Great Barrier Reef Protection Measures Bill was introduced into the Queensland Parliament. The Bill was passed in September with the new laws proposed to come into effect on December 1, 2019.
ACFA’s view
Under this legislation the government is regulating what is considered voluntary, industry best practice. For example, methods for nutrient management, which are effective in providing positive outcomes to growers and the industry. We are concerned that such action by government will only serve as a disincentive to the voluntary adoption of and the continuing improvement of best practice. We do not accept that a regulatory approach is the best mechanism to achieve a high standard of environment stewardship in a diverse, complex and climate-exposed ecosystem.
The loss pathways for Dissolved Inorganic Nitrogen (DIN) are various and are difficult to predict – but farmers know that DIN represents dollars and the objective of farmers is to use management practices which result in the maximum amount of nitrogen entering the sugarcane plant and the minimum amount escaping into the environment; whether it is the atmosphere or water systems. We look to our research organisation Sugar Research Australia to make continued progress with this.
We argue that accredited sustainability programs such as Smartcane BMP and Bonsucro provide the right mix of stewardship and market-led incentive to bring farmers into more sophisticated and finer-scale management practices, including nutrient management.
To facilitate trust, it would be helpful for water quality data to be more readily available to farmers and their advisors, with assistance available to interpret the data. The new legislation will impose costs on farmers, both initially and on an ongoing basis. n
