Nationals sour over sugar sales

DEBATE over Australia selling-off the farm to foreigners has erupted.

DEBATE over Australia selling off the farm to foreigners has erupted, with federal Nationals and the Newman government pushing to overturn an Asian food giant’s dumping of a century-old deal to export Queensland sugar.

Singapore-based conglomerate Wilmar — which produces almost half of Australia’s raw sugar in its eight Queensland mills — is planning to sell the sugar through its own trading arm despite canegrowers wanting to stick with the collective marketing pool, Queensland Sugar Limited.

The move to go it alone — despite Wilmar’s assurances it would stay with QSL when it bought the mills in 2010 — has sparked an unprecedented complaint by the state government of anti-competitive behaviour and a push for federal intervention led by Queensland Nationals senator Barry O’Sullivan.

Since 1912, Australian canegrowers have been guaranteed two-thirds of the profits from all sugar sold through QSL’s deregulated but virtual central desk, which sells about 90 per cent of Australia’s 3.2 million tonnes of export sugar.

Senator O’Sullivan said Wilmar’s decision to abandon QSL and take 60 per cent of its sugar volume would “damage or destroy’’ the centralised marketing system and QSL, potentially putting hundreds of canegrowers, who operate on small margins, out of business.

“This is a like a gorilla stomping through canefields of Queensland,’’ he said. “We need foreign investment in Australian agriculture. But when a decision by a foreign company has such an adverse effect across an entire sector, then we have a big problem ... it’s not in our national interest.’’

The 1500 canegrowers who rely on Wilmar to crush their crop in the Burdekin and Herbert regions north and south of Townsville have almost unanimously opposed the changes despite Wilmar claiming it would secure them higher prices than QSL.

Queensland Agriculture Minister John McVeigh has complained to the Australian Competition & Consumer Commission about Wilmar’s decision and written to the company’s chairman, Kuok Khoon Hong, calling for the miller to stick with QSL.

“The current approach of marketing through QSL allows for the benefits of economies of scale to be enjoyed by all industry participants,,’’ Dr McVeigh said.

“A reduction in QSL’s tonnage will diminish the choice of pricing pools available to smaller mills and growers.

“I am concerned this will dilute returns to ongoing members of QSL and our cane farmers.’’

Federal Agriculture Minister and Nationals deputy leader Barnaby Joyce said last night that he feared the Wilmar move would lead to lower prices for growers.

He said he supported central or single-desk marketing of bulk commodities such as wheat or rice, and could perceive no good reason — unless it guaranteed better returns to growers — to not maintain QSL’s strategic marketing advantages.

“If Wilmar removing its sugar from QSL means a lesser return to farmers — and that’s what I’m inclined to believe it will — I don’t believe it should happen,” Senator Joyce said.

But he added there was not much the federal government could do to stop Wilmar, short of legislating for a return to a compulsory central selling system.

QSL chief executive Greg Beashel said yesterday that as the political furore grew over the Wilmar move, he became more convinced a “negotiated outcome” was the best result for all concerned. Mr Beashel wants the 1600 growers who sell their cane to Wilmar’s mills to have a choice whether they sell their sugar through QSL or Wilmar.

But Wilmar Sugar’s general manager of marketing David Burgess said last night he had heard no mention of that compromise solution from QSL since Wilmar announced in early May that from 2017 it would sell all of its 2.2 million tonnes of sugar itself.

“This has been a major decision and we knew it would create community angst,” Mr Burgess said.

“But Australia is supposed to have a voluntary deregulated marketing system for sugar, and Wilmar is simply exercising its right to leave that (central QSL) system if its wishes to.”