The root causes of the
problems for Australian sugarcane producers are the subsidies and tariffs implemented
by the Europeans, Brazil and the USA.
Sugarcane farmers are price takers
not price setters. To be able to solve the problems of sugarcane growers, it is
critical to be able to identify them.
In real terms Australia is
considered the second most efficient sugarcane producing country in the world, but
they cannot hope to compete against corrupted markets. Our politicians naively
still believe in the level playing field and they let everyone come here
and play for sweet FA at our expense.
How Australian sugarcane
producers can be held accountable for that situation is beyond
understanding. It is way out of sugarcane growers’ control. The Europeans
started this madness with subsides and tariffs for primary industries because
of their recent history of two world wars where many of their population
starved. This is deeply ingrained in their psyche.
Of course, European farmers
play on this situation and are more militant than our docile mob here in
Australia who allow themselves to be shafted from pillar to post.
Australians have never starved and
they presume sugar and other primary products will simply be there on the
supermarket shelf for them to consume at the lowest possible price.
The Brazilian government has
the expressed aim of being the dominant sugar producer in the world. To this end
they financially support their sugar producers to achieve this objective. They
deliberately flood the market with sugar to force naive players such as
Australia out of it so they can dominate and hopefully dictate price at a
later date. Brazilians have a coordinated effort from government, farm and mill
level. For example, the Brazilians will not outsource or purchase any equipment
or technology from overseas for their mills. If they cannot source what they
need from Brazil they will work their way around the situation using their own
products and resources.
As for the Americans, well,
they look after themselves and to hell with the rest.
The Australian government and
sugarcane growers needs to be more proactive by:
||Getting some redress at international forums and courts of law to
eliminate these tariffs and subsides promptly. It is time to stand on some
big toes! If not, Australians will have to bite the bullet and look after
our own sugarcane interests using all means possible, fair and foul. eg.
Tying trade agreements directly to defence contracts and support for wars.
dovetailing the sugarcane industry with other future industries and technology
such as compostable plastics and ethanol. Oil companies are in bed with the
automotive industry and car clubs. Unlike Europe, Canada, USA, Brazil and
others, Australia is the only developed country with a fledgling
ethanol production .
Even New Zealand is pro-ethanol! Government mandating of 10% Ethanol
(E10) is an obvious environmental advantage.
crux of the problem is that our efficient sugarcane farmers are expected to
compete against competitor nations who subsidise their industry. This is an
unrealistic and unfair expectation. How can you expect to compete against
a whole of government approach adopted by our competitors while our
governments pretend it is simply market forces at play? Sugarcane farmers
pay Australian wages and other cost inputs and are expected to compete on
a corrupted subsidised world market. This is not a level playing field!
Providing temporary price support for local sugar as has recently been
done with the current 3c per kg levy on sugar sold domestically is
minimally helpful. This is only a small % of the sugar produced in
Australia as we export far more than we consume and a result does not
increase farm incomes dramatically. This is helpful to a small degree but
expect fierce resistance from the confectionary industry who have been
accustomed to paying bottom dollar for a top product.
more equitable (government enforced) payment system to farmers by
millers. Millers will only pay sugarcane farmers on the sugar content of the
sugarcane delivered to the mill and not other products that they use and
produce from it. Once the miller has the product they "wrongly"
assume ownership of all other products made and used from the sugarcane.
Eg. a by-product called bagasse is used as "free" fuel for
the mill; the nutrient rich "mud" left over from the
crushing process is sold back to the farmer; Molasses extracted is sold as
a stock feed. It is the mug sugarcane farmer who gets paid zero for all
these products and as indicated earlier even pays the mill to get it
the current single desk selling arrangement is abolished and
de-regulation is introduced, this would reduce the price farmers obtain
for their product even further. Eg. How are individual farmers going to be
able to negotiate a fair price for their product if CSR or any
other company are the only miller in a sugercane-growing region?
Millers have a monopoly and are able to dictate price. No wonder they
vigorously support “de-regulation”.
farmers must arrive at a single position on their industry. Sugarcane
grower representatives have to present to government and
Australian community a coherent workable solution. Disunity and apathy have
come about as result of the "brain drain" suffered by all
rural industries as the cream of the youth have gravitated to where
real opportunities are offered in the “subsidised” capital cities. Who
in their right mind would be a primary producer in Australia today
under present conditions? However, a single, strong and professionally presented
position is a must.
a decentralised population is desirable with all the social and economic
benefits that flow from that, a coherent plan has to be in place to
encourage people to move to centres other than capital cities. This means
jobs for the bush to attract people. This includes sugarcane farmers. Look how
underpopulated and underdeveloped the north and west of Australia is
after 200 plus years of settlement. For progress to be made government
assistance is initially needed to provide the services and infrastructure
necessary to make things viable. The only real development that has
taken place is in the capital cities. This is one reason why the
creation of new states as has happened in the USA over the same period of
time is important. Minimal tax zones should be created for the more
isolated areas of our country. People living there are doing us all a
service by simply being there. This will help make up part of the way for
the lack of services and infrastructure in the bush.
I don't pretend to have the
answers but I do want the message to get out that Australian sugarcane farmers
simply want a fair and just price for the product that they already efficiently
The prices have collapsed not
because of farmers' incompetence but because of corrupted world
markets that have been subsidised for years. How sugarcane farmers have survived for
this long is a miracle in itself. They should be rewarded and congratulated not
restructured out of the industry.
This is economic rationalism. The one ray of hope they had was the FTA. This
was taken away from them by their own kind. As Shakespeare wrote, "…
this was the unkindest cut of all".
Sugarcane farmers are at the
mercy of the decisions of foreign governments and the misfortunes of others.
They are the new 'peasantry'.