Grower court ac­tion

Townsville Bulletin - - Investor - by Martin Rasini martin. rasini@ townsville­bul­letin. com. au

CANE farm­ers are set to for­malise their op­po­si­tion to a Su­cro­gen plan for grow­ers to bear $ 60.9 mil­lion in 2010 crop sugar-deal losses, no­ti­fy­ing the miller by letter of a dis­pute in a move that could lead to court ac­tion.

Grower in­ter­ests in the Bur­dekin said yes­ter­day the letter had been pre­pared and its re­ceipt by Su­cro­gen would set in mo­tion a for­mal dis­pute res­o­lu­tion process, which could see the mat­ter pro­ceed to court.

Townsville-based com­mu­nity re­la­tions man­ager for Su­cro­gen Kylie Stock­dale said se­nior man­age­ment had not re­ceived for­mal no­ti­fi­ca­tion of a dis­pute.

News of the grow­ers’ move came as ex­porter Queens­land Sugar and millers agreed on a split among millers of $ 105 mil­lion in losses in­curred when QSL failed to ful­fil sales con­tracts af­ter wet weather pre­vented har­vest­ing of much of the 2010 crop.

The losses have seen Aus­tralian Cane Farm­ers As­so­ci­a­tion call for the QSL board to have at least one grower and one miller rep­re­sen­ta­tive, and for QSL to op­er­ate its own pric­ing pool along- side those run by millers.

QSL is es­tab­lish­ing a worki ng group with i ndus­try stake hold­ers to re­view meth­ods and pro­cesses with a view to new ar­range­ments to pre­vent such losses.

The na­tional sugar ex­porter said a re­view by Ernst and Young had con­firmed its cal­cu­la­tion of the 2010 de­liv­ery short fal lcosts at $ 105.544 mil­lion and the agreed split ‘‘ is seen as the most eq­ui­table way to dis­trib­ute the costs’’.

QSL said millers had pro­posed that the costs ‘‘ prop­erly re­side in the shared pool and, i n gen­eral, will be spread over all pools in­clud­ing the US Quota, long-term con­tracts, fixed-pric­ing plat- forms and the sea­sonal pool’’.

QSL said the var­i­ous re­gions would deal with the costs, con­sis­tent with their spe­cific for­ward-pric­ing and pool ar­range­ments.

‘‘ QSL is also of­fer­ing a de­ferred pay­ment scheme so that the im­pact of these costs at an in­di­vid­ual grower or miller level can be spread over three sea­sons,’’ it said.

Milling busi­nesses that op­er­ate as co-op­er­a­tives or are largely owned by grow­ers gen­er­ally have struck agree­ments with cane sup­pli­ers on ways to meet their por­tions of the loss.

How­ever, sup­pli­ers to Su­cro­gen mills for the most part re­ject any re­spon­si­bil­ity for the costs, say­ing they con­sti­tute a trad­ing loss for which re­spon­si­bil­ity re­sides with the owner of the sugar.

The grower in­ter­ests said farm­ers be­lieved the dis­pute res­o­lu­tion process pro­vided the best av­enue to ob­tain a timely and cost-ef­fec­tive re­sponse from Su­cro­gen.

They said the process set time frames for re­sponse and ne­go­ti­a­tions and grow­ers were un­wa­ver­ing in their com­mit­ment to pur­sue legal ac­tion if the process failed to re­solve the dis­pute.

The grow­ers said Her­bert River farm­ers and those in t he Plane Creek district around Sa­rina had been in­vited to join the Bur­dekin push to re­solve the dis­pute.

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