QSL and the 2010 crop
The unseasonable weather which closed the 2010 crush resulted in a sugar supply shortfall cost, which QSL is obligated to refer back to its suppliers.
Although Mackay Sugar has sorted out the exposure for itself and its suppliers, some other regions are talking to the media about legal action to prevent their mills form passing any costs on to farmers. This is a serious issue which has quickly grown contentious, as each region has its own supply contracts and suppliers have differing ideas about what constitutes marketing/administration costs. QSL, for its part, has attempted to explain the matter to farmers in local meetings but many voices are muddying the waters. QSL has also commissioned a review by auditors Ernst & Young to examine the effects of the 2010 season.
QSL rightly says that the industry must now consider how to develop improved pooling systems and processes, including crop forecasting.
ACFA fought to retain farmer directors of QSL and therefore farmer oversight of its operations. Greater than two thirds of QSL’s pricing is for farmers’ share of sugar that they do not own. As with the directorship of QSL, ACFA opposed the aspect of sugar industry deregulation which handed ownership of sugar to milling companies. On both counts, ACFA was opposed by the other grower organisation. The 2010 experience highlights the need for farmers to have a say over aspects affecting their livelihood which until now how been opaque at best, while other aspects have been totally hidden.
The 2010 season has also highlighted that grower/miller interests and grower/grower interests are now less aligned; where getting the crop off to meet forward pricing commitments was the modus operandi; wrecking fields and stressing equipment under appalling conditions. As CCS declined the process became a vicious cycle of diminishing returns which will significantly affect future crops.
The result is a mess that can only be planted out over the next several years. We now desperately need months of sunshine to salvage existing crops and a reliable sourced of planting stock for a successful 2011 planting program.
ACFA AGM & Conference
I encourage all ACFA members to attend the 2011 AGM and Conference on Wednesday 23rd March 2011 at the Pacific International Hotel in Cairns. This event promises to be informative and interactive with plenty of time allowed for questions. Members are encouraged to invite non-member cane farmers.