The Government has released its response to the review of the Sugar Code of Conduct. The code will be retained to provide certainty for the sugar industry.
ACFA Chairman Don Murday said that the decision to extend the life of the Code gives confidence to farmers to continue investing in their businesses. “Cane farming invests approximately two-thirds of the capital in the Australian industry,” he said.
“The Code is a light form of regulation which establishes fairness and balances market power between the many family farmers who are price-takers and large global corporations who act according to their own self-interest, in the name of their shareholders.
“Our farmer members are paid for the sugar in their sugarcane, over twelve months. They are not paid at the farm gate and so they need to be able to manage the marketing and pricing of their share of the sugar.
“They need ‘line-of-sight’ to the market and the ability to elect their marketer of choice. This allows the marketer to take delivery of a farmer’s share of the sugar, to be able to finance advances to the farmer and provide price management products.”
“The code also allows marketers to compete for farmers’ business. The alternative is for farmers to be packaged into the supply chain of monopsony millers, which does nothing for competition.
“Farmers have greater confidence when the financial side of their business is separated from milling, as contract negotiations with milling companies can then concentrate on cane supply and processing, which is what they were intended to do.”
“On behalf of our members I thank the Morrison Government for standing up for Australian family farmers,” said Mr Murday.
The code sets out a strict process for pre-contract arbitration when growers, millers or marketers fail to agree to terms of contracts or agreements with each other.
The code will be amended to make it clear that pre-contractual arbitration only applies to raw sugar and not to any other products from sugar cane.
This code is secure and any changes to it in the future will be subject to a disallowance process. Any attempts to repeal it would be subject to parliamentary oversight.
The provision that allows growers to choose their marketer will remain.
A further review of the code will be undertaken in four years’ time to assess whether the code is still needed.
The review will consider recommendations made by the Australian Competition and Consumer Commission (ACCC) in regard to penalties and investigative powers at the next review to determine if further ACCC involvement is needed.
For more information contact:
Don Murday – ACFA Chairman – 0418 774 499
Stephen Ryan – Communications – (07) 3211 0022