Sugarcane farmers in far north Queensland have welcomed the resolution of a bitter long-running supply dispute with their local sugar mill after more than 18 months of wrangling.
Tully Sugar Limited, owned by Chinese company COFCO, had sought changes to a three-year long cane supply agreement that growers objected to, saying it would hurt their profits.
A contract setting out terms for the 2020-2023 sugarcane crushing season has been agreed to based on the arbitrator’s award, which largely resembles the previous 2017-2020 cane supply agreement.
Tully Canegrowers chair James Dore said he believed the instigation of provisions under the Federal Government’s Sugar Industry Code of Conduct resulted in a positive outcome for his members.
“The arbitration process is not for the faint-hearted. It cost a lot of money, it’s not the preferred position.”
A planned Supreme Court action challenging the arbitration mechanism in the Sugar Code of Conduct and scheduled for March 20 was dropped by Tully Sugar.
After more than a year of negotiations failed to reach a resolution on a new cane supply agreement for 2020-2023, Canegrowers invoked the Code of Conduct in late 2019 to have an arbitrator, dispute resolution lawyer Russell Thirgood, appointed to determine an outcome.
Mr Thirgood handed down his award in Brisbane after 60 days of arbitration, which made no changes to the previous 2017-2020 cane supply agreement in the majority of the areas of dispute.
The operative award rejected a proposal on season length allowances that Tully Canegrowers said would potentially lengthen the crushing season, currently set at just over 20 weeks, risking weather-related delays and financial hardship for growers.
But provisions in the contract requiring growers to pay $2.60 in harbour dues per tonne of sugar marketed through Queensland Sugar Limited, instead of COFCO’s marketing division, will remain in force.
“Queensland Sugar Limited and other marketing entities are negotiating with millers all the time, there’ll be room for improvements in on-supply agreements and sugar pricing and in sugar marketing and pricing agreements.”
Enthusiasm for new codes
Mr Dore said despite the mixed outcome, the successful resolution of a long-running impasse under a code of conduct would give faith to many other groups embroiled in legal disputes.
“It’s not like Santa Claus comes and gives everyone the presents that they want, both parties are probably disappointed with the outcome in some ways,” Mr Dore said.
“There’s another mandatory code of conduct being announced in the media space, the dairy code of conduct, [which] was brought into fruition a couple of months ago.
“These codes of conduct are becoming more prevalent, and we see that it’s usually where there’s a market imbalance.
“The code of conduct delivered and gave us an outcome.”
Tully Sugar and the Australian Sugar Milling Council have been contacted for comment.