Thursday, 9 February 2017
Questions without Notice
Queensland: Sugar Industry
My question is to Senator Nash, the Minister representing the Minister for Agriculture and Water Resources. Minister, foreign-owned company Wilmar Sugar holds a monopoly on the Burdekin region in North Queensland due to its ownership of the four mills, together with 100 per cent ownership of rail lines to and from those mills. Therefore, the growers have no option but to have their crops processed by the Wilmar group. Further, Wilmar has established its own marketing company, as well as its wholly owned transport company. At present, approximately 85 per cent of farmers are reluctant to sign Wilmar's cane supply agreement without the on-supply agreement between Wilmar and QSL. My question is: what action is the minister taking to overcome this deadlock, which must be resolved by 28 February 2017 so that farmers can lock in their forward pricing contracts as well as be in a position to nominate their marketing company of choice, which is in favour of QSL rather than Wilmar?
I thank the senator for her question and acknowledge her very genuine interest in this particular issue. The government very strongly support our Queensland sugar growers—of course we do; that is a given—and we are very focused on making sure that there are good outcomes for the growers in that state.
I am advised that, in late 2015, Queensland passed legislation that should enable millers and canegrowers to work more constructively together to determine contracts, and the government does believe that the sugar industry should work within the context of the Queensland legislation to prove it can work in helping growers exercise their choice of marketer. Six out of the seven sugar millers, senators might be interested to know, across Queensland have demonstrated that that Queensland legislation can work, by locking in contracts with their respective mills, except for, as the senator indicated, farmers growing for Wilmar in the Burdekin, Herbert and Central Queensland regions.
We are really aware of growers' concerns in this area—the impact on them and on their financial arrangements and monetary commitments, obviously, in terms of pre-planting, and the certainty that they need for their businesses going forward.
I am also advised that negotiations for the on-supply agreement that the senator mentioned are still taking place between Wilmar and Queensland Sugar Ltd. The agreement provides the marketing arrangements for the cane supply agreements, and finalising that will enable growers to have marketing choice in their individual CSAs—but, as I indicated, those negotiations are still ongoing. We certainly support competition in the sugar industry, but we absolutely support a viable and strong future for our canegrowers in Queensland.
Should Wilmar continue to demonstrate non-competitive behaviour in its negotiation of both the on-sale and the cane supply agreements, will the government prioritise legal action under the fair trade legislation; and, should Wilmar not finalise these agreements in a businesslike manner for not only its benefit but that of the growers and QSL by the deadline of 28 February 2017, what action shall the government take to end this monopoly situation and the coercive actions of Wilmar forcing farmers into such— (Time expired)
Will the government introduce legislation to reflect the recommendations of the Senate inquiry report dated 24 June 2015, code of conduct for the sugar industry, recommending choice of marketer and arbitration process to determine the terms and conditions?
I understand that the government would be considering those recommendations very closely, but I am not going to pre-empt any decision of the government on that basis. I will say though what I said at the outset. This government is absolutely committed to ensuring that we have a strong and viable future for our sugar growers in Queensland. We know that our agricultural producers make an enormous contribution to this nation's economy—indeed, they drive this nation, they clothe the nation, they feed the nation and they water the nation. We are well aware, as I said, of the uncertainty that has been created and will continue to work with the industry and the sector to ensure that that very viable future is in place for the growers.