A valid question has been posed in recent media regarding cane-farming families and just what they are asking from governments and why indeed they are “different” from other small business owners.
The simple answer is that governments do not dictate to small business owners the price at which they must sell their goods. Nor do they dictate a price that is less than their cost of production, and in fact less than half of the average world cost of production.
Sugar producers, however, are forced to accept such a price under National Competition Policy, by ministerial directive. In other words, since 1996, they have been forced to accept a price that has no bearing on their cost of production or the Australian input costs they must address.
No other country in the world directs that their sugar producers accept such a price on their domestic market. Moreover, other sugar producers worldwide receive up to four times the price our growers are paid, with many also sharing in value-added products, such as co-generation of electricity, molasses, ethanol, bio-plastics, pharmaceutical waxes, etc. Queensland cane-farmers are paid on their CCS (sugar content) alone, with the milling companies profiting from all additional products.
Does the consumer benefit? No, because there is no requirement that the lower prices be passed on to the consumer. In fact, since 1996 the prices of sugar and manufactured sugar products have risen substantially while cane-farmers have received less.
From last season’s crop, the average Queensland cane-farmer received around 11 cents per kg of sugar, the refiners charged up to 80 cents per kg, and packagers received between 15-25 cents per kg (just to bag it). On the shelf, sachets of sugar were sold at up to $6.38 per kg.
Cane-farmers are not asking for handouts from taxpayers: they are asking for government policy to reflect similar policies to those imposed on our competitor nations, with similar considerations given. If we are being asked to live on a level playing-field, then “level” it should be – not remunerated at one quarter of the price of our major competitors.
Our cane-farmers are more competitive and cost-effective than those in any other nation on earth. No business should be forced to sell their product at less than a third of world prices by government diktat, but cane-farmers are!
Claredale, North Queensland