Chapter 1
Introduction
Conduct of inquiry
1.1
On 4 September 2014, the Senate referred the following matter to the
Rural and Regional Affairs and Transport References Committee for inquiry and
report by 27 November 2014:
Current and future arrangements for
the marketing of Australian sugar, including:
- the impact of proposed changes on the local sugar industry, including
the effect on grower economic interest sugar;
-
equitable access to essential infrastructure;
-
foreign ownership levels in the industry and the potential to impact on
the interests of the Australian sugar industry;
- whether there is an emerging need for formal powers under Commonwealth
competition and consumer laws, in particular, whether there are adequate protections
for grower-producers against market imbalances; and
-
any related matters.
1.2
On 2 October 2014, the Senate granted an extension of time for reporting
until 30 April 2015. On 26 March 2015, the Senate granted a further extension
of time for reporting until 21 May 2015.
1.3
The inquiry was advertised in The Australian on 17 September 2014.
The committee also wrote to key stakeholder groups, relevant government
departments, organisations and individuals to invite submissions.
1.4
The committee received 51 submissions which are listed at Appendix 1.
The submissions are also published on the committee's website.
1.5
The committee held three public hearings – in Murwillumbah on 10 March
2015, in Mackay on 12 March 2015 and in Townsville on 13 March 2015. The
committee took evidence from a variety of industry bodies – including sugar
milling companies and representative bodies, local government bodies,
canegrower representative bodies and individual canegrowers. A list of
witnesses who appeared at the hearings is provided at Appendix 2.
Structure and focus of the report
1.6
Chapter 2 provides a general background in relation to the Australian
sugar industry. The chapter also provides a history of regulation in the
Australian sugar industry – with a specific focus on the state of Queensland.
1.7
Chapter 3 outlines the issues currently being faced by the Australian
sugar industry and the issues raised by industry stakeholders during the
committee's inquiry.
1.8
Throughout the inquiry, the committee was told that the issue of grower
economic interest (GEI) sugar is at the heart of many of the challenges currently
being experienced across the sugar industry. It is an issue which has consequences
for the grower and milling sectors of both the New South Wales and Queensland
industries.
1.9
It is clear to the committee that there are a wide range of views, not
only in relation to the definition of GEI sugar, but also in relation to the
transfer of sugar title and 'ownership' more generally. The contradictory evidence
received by the committee reflected a large number of different interpretations
around GEI sugar and its practical operation in the market.
1.10
Following its examination of sugar pricing and marketing generally, the
committee has found it difficult to gain a clear understanding of GEI sugar – including
who determines its value and calculates its price. Identifying a common
definition of GEI sugar has in itself proved problematic, given that some
sectors of the industry argue that, in reality, GEI sugar does not exist.
1.11
Rather than attempt to provide specific explanations or rigid
rationalisations of the way in which Australian sugar is currently traded,
processed and marketed, the committee has sought to provide some clarity in
relation to the issues currently facing the industry. The committee also sought
to articulate the impact these issues are having on stakeholders – particularly
current relationships between the growing and milling sectors.
1.12
As a consequence, the committee's report:
-
provides a brief outline of the history of the Australian sugar
industry – particularly in relation to regulation;
-
provides background in relation to the path the industry has
taken: from the 1912 Royal Commission through to the 2006 deregulation of the
industry;
-
details some of the issues that have impacted the industry
throughout its transition; and
-
presents an overview of the evidence provided by industry stakeholders,
and the challenges currently facing the industry.
Acknowledgements
1.13
The committee acknowledges the contribution of all those individuals and
organisations who prepared written submissions and those who appeared as
witnesses. Their efforts have assisted the committee considerably in the
preparation of this report.
A note on references
1.14
References in this report are to individual submissions as received by
the committee. References to the Hansard throughout the report are to
the proof transcript. Page numbers may vary between the proof and the official
transcript. The Hansard transcripts of the committee's hearings are
available on the Parliament's website at www.aph.gov.au.
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