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The Wilmar dispute for dummies

CANEGROWERS CEO Dan Galligan provides the background on the Wilmar sugar marketing dispute. Sugar marketing has made national headlines this week but for those outside the industry, the issuecan be difficult to grasp.
Nanjing Night Net

We asked CANEGROWERS CEO Dan Galligan to give us the background.

In April 2014, milling company Wilmar Sugar indicated it would end its sugar marketing arrangement with the industry-owned, not-for-profit marketing company QSL from the end of the 2016 season.

Tully Sugar and MSF Sugar also took that decision meaning new arrangements would be required before the commencement of the 2017 crush.

The decision meant:

Growers supplying those companies would be forced to market their economic interest sugar through the milling company’s channels. As grower earnings are calculated on a formula which links the export price of the raw sugar to the price of their cane, they have a direct financial link to the marketing outcome.Millers would extend their regional milling monopoly power to include marketing. In December 2015, amendments to the Sugar Industry Act 1999 were passed by the Queensland Parliament. These amendments required mills to offer marketing choice to growers and therefore provided for competition in the provision of sugar marketing services. Two agreements are required to make this happen. Agreements which comply with the legislation have since been negotiated and signed by six of the seven milling companies operating in Queensland, including Tully Sugar and MSF Sugar with QSL.

The mills in the Bundaberg, Isis and Mackay regions all maintained existing agreements with QSL.

Wilmar Sugar is now the only milling group yet to finalise the two agreements required to make marketing choice available for the 2017 season.

Until Wilmar and QSL conclude their On-Supply Agreement, Cane Supply Agreements with the CANEGROWERS groups in those districts cannot be finalised and those growers who wish to do so are unable to choose QSL as their sugar marketer.

What does this mean?The lack of a milling contract for the 2017 season is causing significant stress to the 1500 hardworking farming families in the Wilmar Sugar milling districts of the Burdekin, Herbert, Proserpine, and Plane Creek.

This uncertainty, stress and anxiety has to end now.

This $2 billion export-focused industry is vital to the economy of North Queensland and the sooner this impasse over agreements is resolved the better.

Pathways to a resolution- Dan Galligan, CANEGROWERS CEO

This story Administrator ready to work first appeared on Nanjing Night Net.

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