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   Vol.66/No.43           November 18, 2002  
Australia sugar farmers demand
government relief from price slump
(front page)
INGHAM, North Queensland--The sugar mill owners "want farmers to work longer and harder and to shorten the harvest season" said sugarcane grower Max Menzel at a protest meeting of 600 people here on October 9. The meeting was one of a number organized by Queensland farmers to demand relief from the slump in sugar prices and to protest government plans to carry out a new round of deregulation of the industry.

The meetings have attracted thousands in towns and communities up and down the state’s "cane coast." A group of farmers who call themselves the "gang of eight" have initiated the gatherings and presented an eight-point plan to those in attendance.

The plan demands that the government set a minimum payout to the farmers of A$300 per metric ton of sugar (A$1 = US 55 cents). It also demands the maintenance of the existing centralized selling system, organized through Queensland Sugar Limited--a body that is subject to government oversight. This setup is targeted by the Liberal-National Party government for deregulation.

A third point backs the processing of ethanol from sugar and proposes that the government set an official target for its production, to be set as a proportion of the petrol currently used in Australia.

Menzel was one of a number of working farmers at the October 9 meeting who spoke tellingly of the untenable situation they face. Small farmers are threatened by the crisis in the industry by the government’s moves, and by the greed of the millers. "They’re squeezing us to death," he said. He noted that in the area around his farm "the mill is already pushing for people to work at night."

Before early state Labor Party governments enacted laws to stabilize prices and quotas, Menzel added, "The growers were at the mercy of the mills." Following the removal of a number of these protections in 1996, he said, all farmers "have left in the legislation" are binding production contracts "and the single desk [selling structure]. We have to fight for that, it is nonnegotiable."

Bernie O’Shea, who helped organize the meeting, reported a "bleak day" in the town of Mossman. The National Australia Bank had threatened to close the local sugar mill, he said, unless growers put up $3.5 million.  
Cane growers face huge debts
Most cane growers in Queensland State are classified as being either small--with an annual cane crop of 5,000 to 6,000 metric tons--or medium, producing 6,000 to 20,000 tons. On average, small producers rely on off-farm jobs for half their income.

Queensland farmers in all agricultural sectors owe a total of A$6.6 billion to the banks, which averages out to A$370,000 per farmer. Some 70 percent of these debtors are reportedly having trouble paying the interest on these loans. Of these, indebted cane growers are the most vulnerable.

Since the government relaxed retail price controls and carried out other "reforms" in 1996, the price received by the farmers has fallen by one-quarter. Meanwhile, the supermarket price of sugar has shot up 26 percent. Adding to farmers’ woes has been a simultaneous 40 percent average drop in the value of their land. Farmers reported that at least six farms near this rural town have closed in the past 12 months.

Three exceptionally wet seasons between 1999 and 2001, followed this year by the worst drought in 50 years, have exacerbated farmers’ problems.

"Growers can ride through one or two bad seasons, but four in a row has an impact," said Ian Ballantyne, the general manager of the Australian Cane Growers Council, in the September 9 Sydney Morning Herald. As many as 2,000 of Queensland’s 7,000 sugarcane farms could be forced out of operation, he said.

Farmers also face the consequences of the sharp increase in international competition as more sugar has come onto world markets, frequently colliding with local protectionist barriers. They point out that the price for Australian export sugar has plunged from $345 a ton in the early 1990s to about $250 today. Such prices, they say, have been further undercut by the huge Brazilian crop, the price of which has plummeted in the wake of a 60 percent devaluation of the country’s currency over the past year.

The organizers of the Ingham meeting distributed a pamphlet noting that the commercial value of raw sugar production in Australia has dropped from A$1.94 billion in 1994–95 to an estimated A$1.35 billion in 2002.The current world price for sugar is just under US 6 cents per pound, or 50 percent below the level needed for Australian cane growers to meet costs and survive, it stated.

Various protectionist ideas were presented at the meeting. O’Shea backed extending the proposed sugar levy to imported sugar products to "ensure that there was no discrimination against our local manufacturers." In addition, there were propoals for direct price subsidies to farmers.

Most sugar markets in the advanced capitalist countries are heavily protected, stated the pamphlet. It reported that growers in the countries of the European Union (EU) receive US 28 cents a pound for sugar, while their counterparts in the United States garner 17 cents. Nearer Australia, the EU pays Fiji about double the world price for half its sugar. Cane growers in Queensland are alone in receiving the bare world price, the "group of eight" pamphlet claimed.

The meeting organizers are now discussing calling a protest in Townsville. They have also organized pickets of meetings of the federal cabinet in Cairns and of the Queensland parliament in Townsville.

Brendan Gleeson is a member of the Australasian Meat Industry Employees Union. Ron Poulsen is a member of the Maritime Union of Australia.  
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