Sugar stoush sours
‘ Marketing’ costs at crux of legal argument
BATTLE lines are being drawn as the result of $ 105 million in losses incurred due to exporter Queensland Sugar being unable to fulfil sales contracts due to 2010’ s extraordinarily wet harvesting season.
Cane farmers are threatening legal action over calls by Sucrogen for them to put forward a $ 40 million contribution, following an agreement with QSL for Sucrogen to bear $ 60.9 million of the losses.
Sucrogen claims the losses are marketing costs, to which growers contribute, but farmers say the losses are from trading activities, for which they bear no responsibility.
About 20 representatives of cane districts from Bundaberg to Mossman met in Townsville last Wednesday with a view to ensuring growers received payment for cane supplied to Sucrogen mills.
‘‘ Representatives left the meeting with a joint intent to contest any failure to pay on the part of the miller and to garner support from individual growers for legal action,’’ one grower said.
The Townsville meeting came ahead of Sucrogen informing growers by letter on Friday that QSL intended to deduct ‘‘ the extraordinary marketing costs’’ from proceeds of the 2010 season crop otherwise payable to it, and that, as there had been no agreement on sharing losses, there would be no payments to growers this week.
QSL exports on behalf of seven milling companies and its chief oper- ating officer John Bird said yesterday agreements were expected by tomorrow with some millers to enable payments to occur.
Sucrogen yesterday met with industry body Canegrowers to discuss the grower contribution – about $ 5 per tonne of cane.
There is disagree ment a mong millers as to whether it should be allocated only to forward-priced tonnage or be spread equally across all tonnage, a position held by Sucrogen.
Mark Day, executive general manager for cane products, said Sucrogen was committed to an equitable outcome.
‘‘ Sucrogen hopes . . . to resolve the cost allocation issue and develop an optional deferred payment scheme so that a cane pay can be made soon,’’ he said.
‘‘ Also, we are in discussions to identify how sugar marketing can be improved to ensure it is able to better cope with adverse crop fluctuations.’’
Townsville lawyer Evan Sarinas said in event of a court stoush, much would hang on the intent of the parties in use of the term ‘‘ marketing costs’’.
Mr Sarinas said for a class action to proceed ‘‘ there needed to be seven or more people with claims that arise out of similar or related circumstance and that give rise to a substantial issue of fact or law’’.
‘‘ If this condition is satisfied, they can appoint a representative applicant to take on the case on for all and people can opt out by advising the court,’’ he said.
Mr Sarinas said by comparison a test case, when won, allowed others to seek recompense on the basis that the judgment set a precedent. FEES CONTESTED: A bad season and natural disasters like Cyclone Yasi have left cane farmers reeling and looking for answers