Sugar pricing probe hopes to correct ‘ failed system’
CANEGROWERS is poised to launch an investigation into sugar pricing following dispute over a $ 105 million hole in 2010 season sugar export income which, it says, shows the present system has failed cane farmers.
C h i e f e x e c u t i v e S t e v e Greenwood said yesterday the investigation aimed to resolve issues at dispute bet ween cane f armers and millers so that they could not arise in the future.
Millers and growers are at odds over the $ 105 million in losses incurred by Queensland Sugar, which was unable to meet sale commitments after the 2010 wet harvest season, which cut sugar content and left millions of tonnes of cane in paddocks.
Millers have called f or growers to bear liability, claiming it is an extraordi nary marketing cost t o which farmers are required to contribute.
However, growers view it as a trading loss for which they bear no responsibility, and moves are afoot to launch legal action.
Mr Greenwood said, after months of negotiation and countless dollars spent to secure advice, resolution of the issue continued to evade the sugar industry.
Millers and growers also are split as to whether the loss should be borne solely by growers who forward-
Steve Greenwood priced or by all growers.
Mr Greenwood said the dispute showed present pricing arrangements were immature.
‘‘ Many cane farmers are feeling angry, frustrated and let down by what they understood was a forward-pricing system they could rely upon t o b e t t e r ma n a g e t h e i r risks,’’ he said.
‘‘ It would now appear that this is not the case.
‘‘ Canegrowers is committed to taking charge of this issue and fixing it so we will not be faced with it in the future.
‘‘ The investigation is about identifying workable sol- utions and driving necessary changes to build a more robust system.’’
Issues for review include grower access to the Raw Sugar Supply Agreement; grower involvement in QSL marketing, selling, pricing and crop estimate decisions; continued grower access to future pricing programs; and full transparency of the marketing and pricing system.
Mr Greenwood said Canegrowers, within a fortnight, woul d c a n v a s members’ views as to what they wanted from an amended pricing system, work further with pricing specialists and advisers, and participate in a QSL working group.
QSL chief executive Neil Taylor announced formation of the group last week, saying the industry needed to adopt a robust, system-wide approach to reviewing pricing and risk options so that changes would deliver results for all.
Mr Greenwood said Canegrowers would examine the pricing system, the actions of all industry sectors including QSL and millers, and identify changes that must be made.
‘‘ After the investigation, Canegrowers will clearly articulate and aggressively pursue changes that need to be made to fix the sugarpricing system,’’ he said.