LNP leader Tim Nicholls said the impasse was having a detrimental effect on up to 1500 growers in North Queensland cane growing districts.
“If Wilmar Sugar and Queensland Sugar Limited can’t agree or don’t resolve the dispute by February 28, the LNP will act and amend the Sugar Industry Act,” Mr Nicholls said.
“Everyone in the industry is sick to death to this and it needs to end. Both parties need to grow up, bury their egos and sort this out, otherwise growers will lose out.
“Wilmar and QSL need to provide an iron-clad guarantee within 48 hours that negotiations will be finalised for supply and on-supply agreements by February 28.
“If not, then the LNP will introduce amendments to state parliament compelling millers and marketers to go into arbitration.
“The LNP is serious about this issue. Drafting instructions have already been given to parliamentary counsel and we’ll be speaking with Wilmar, QSL, CANEGROWERS and the Australian Sugar Milling Council today and giving them a very clear message – get a deal done.”
Wilmar is the only one of seven sugar milling companies not to have signed a cane supply agreement. Despite this, Agriculture Minister Bill Byrne said the LNP threat was an act of desperation.
“In 2015 the LNP claimed it had solved sugar marketing disputes with its amendments,” Mr Byrne said.
“The only legacy of its intervention has been increased antagonism, frustration and huge legal costs for all sides and crippling uncertainty for the growers.
“Today’s announcement is an admission the legislation we opposed has failed.
“Our position has been consistent throughout. There is no place for political intervention in negotiations that should be settled by commercial agreement.”
Despite the threat of a mandatory arbitration process, Wilmar’s North Queensland general manager John Pratt said continual political intervention delayed an outcome.
“We reiterate that no grower supplying cane to Wilmar need be without a Cane Supply Agreement or access to forward pricing,” Mr Pratt said.
“Growers are not being forced to choose Wilmar as their marketer. Under our Marketing Nomination Transfer Agreement, growers have the ability to forward price now and then transfer their nomination and pricing to QSL once a raw sugar sales agreement has been signed.
“Those growers who sign a CSA after a raw sugar sales agreement is complete will of course have the opportunity to choose Wilmar or QSL as their marketer at that time.
“While we understand concerns for an outcome, we caution that further legislative intervention will only frustrate the situation and damage the future prospects of the industry. A commercial agreement will only be achieved when both parties are satisfied with the terms and willing to commit.”
Mr Pratt said the Federal Government should release a report from the Productivity Commission, which spent over a year looking at the issues in the sugar industry. He said media reports suggested that report recommends repealing the Queensland legislation, “just as the Queensland Productivity Commission did in 2015."
Peak farm body CANEGROWERS urged Wilmar Sugar, QSL, the Queensland Government and the community to remember that mostly family farming businesses were at the heart of the current impasse.
CANEGROWERS chief executive officer Dan Galligan said it was about the small businesses contributing to the economies of Queensland’s regional areas, that supply the eight Wilmar sugar mills.
“Without them, their hard work and capital, there is no sugar industry in Queensland,” he said. “This drawn-out process is taking its toll.”
Mr Galligan said in April 2014 Wilmar Sugar had pulled the rug out from under growers by deciding to force them to market their economic interest sugar through its own channels, cutting them off from the industry-owned not-for-profit marketing company QSL.
QSL managing director and chief executive officer Greg Beashel said since the implementation of marketing choice legislation in Decembe 2015, QSL had successfully negotiated supply agreements with six of the seven Queensland sugar millers.
“However, like the Wilmar growers who cannot access our marketing and pricing services for the coming season, we have been immensely frustrated by the slow rate of progress of Wilmar’s On Supply Agreement negotiations,” Mr Beashel said.
“While our door remains open to a commercial resolution with Wilmar, we welcome the LNP’s announcement today that it intends to initiate moves to enable arbitration on this important matter.”
Deputy Opposition Leader Deb Frecklington said while the dispute had been at times heated, senior managers from both organisations needed to shoulder responsibility and come to an agreement, especially after the LNP warned the companies last December that if they failed to reach an agreement it would act.
“The LNP made common sense changes to the Sugar Industry (Real Choice Marketing) Amendment Bill in Parliament on December 2, 2015 and since then, the vast majority of milling companies have successfully negotiated with QSL regarding on-supply contracts (between millers and marketers) and provided growers with cane supply contracts which offer real choice in marketing,” she said.
“Maryborough, Bundaberg and Isis, Mackay and Tully mills have all been able to work through the new marketing contracts to provide their growers with genuine choice in marketing for their grower’s economic interest sugar.
“It’s past time for Wilmar and QSL to finalise agreements so that the remaining 1500 growers in the Burdekin, Herbert and Central districts can have contracts for the coming season.
“No existing agreements between growers, millers and marketers will be affected by these changes, but in the future, growers with current agreements which expire will have greater protection and a clearer dispute resolution framework.”
“We have listened, planned and are now acting to ensure growers are not disadvantaged.”
Australian Sugar Milling Council chief executive officer Dominic Nolan said rather than speed up the negotiation process, the introduction of arbitration would further delay the likelihood of the two parties reaching agreement.
“Arbitration is a step back further into the past,” Mr Nolan said. “The legislation we have now has already cost the industry millions and all stops should be pulled out to get rid of it as soon as possible.
“The only hope of shortening the negotiation process is to allow Wilmar and QSL to agree on commercial terms.”