Sugaronline Editorial - Clumsy fingers By Meghan Sapp

Published: 03/31/2017, 10:58:00 AM

Don't say you haven't been warned.



Don't say you haven't been warned.

 


It’s not as if they weren’t warned. For months, Australia’s federal government has made it quite clear that if Wilmar and Queensland Sugar Limited didn’t come to some sort of agreement, and that if a contract reflecting farmers’ right to choose who markets their 2/3 share of said sugar wasn’t signed by said farmers, that the government would intervene.

And so on Wednesday, it did.

The country’s deputy prime minister referred to government interference as “clumsy fingers,” knowing full well that private and public sector alike prefer when the market can just get on with its business, but that if it doesn’t, the very un-private sector-like government must get involved. And that’s what the new code of conduct for the sugar industry is all about, complete with the Australian Competition and Consumer Commission as arbitrator on sugar prices.

Or at least that’s what the government has told the media it is all about. The opposition Labour party is up in arms because they haven’t even seen it, let alone been consulted about its contents nor a public review period opened so that stakeholders can refine the proposal. It’s an as-is policy. Clumsy, but no surprises there.

Yet just two days prior to the announcement, the government said it would hold off on the code of conduct to see how Wilmar and QSL got on. Three weeks ago, the two sides finally broke a two-year long stalemate but that it would likely take six weeks to get the actual contract hammered out. Then Monday, as the government said it would be patient a little longer, Wilmar presented a draft to QSL, so all looked to be moving forward and making progress.

Then bam. Code of conduct time. It’s not just the opposition who is unhappy either. The millers don’t like it. Singapore doesn’t like it, saying that it likely breaches the Free Trade Agreement it has with Australia.

Despite the trade spat finally coming to a head, the reality is that it may be moot. At least for this season. As the deal centres around who has control on sugar sales for exports, the question will soon become how much sugar is actually available for export following the extensive damage the cane crop suffered this week from Cyclone Debbie. As much of a quarter of the crop could be lost, with current estimates pegging the damage at around A$150 million, bad enough that natural disaster funds have already been activated for Queensland growers.

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