The sugar industry, that has kept the town of Proserpine alive and prosperous for well over a century is on the brink of a $140 million debt, around $10million of which rests in the Proserpine area.
Due to what local farmers are calling a "sweetheart deal" between the Proserpine Sugar Mill and Queensland Sugar Limited (QSL) over shortfalls in sugar from 2010, approximately two-thirds of this debt could be passed to the growers – a debt they say is not theirs to pay.
General Manager of the Australian Cane Farmers Association (ACFA) Stephen Ryan said, “The issue is that some people are going to go bankrupt over this”.
Manager of Canegrowers Proserpine Mike Porter said, “I wouldn’t like paying $10 million either. “Yes the growers are starting to complain and quite rightly so. They need to have answers about what went wrong”.
“What this comes down to is who owns that debt. The mill is prepared to accept some but not all of it.
“Who is to blame? Is it the growers because they couldn’t deliver? Or is it the mill because they overstated or didn’t reduce the estimate down? Who is responsible for a weather event?”
Mr Porter said his organization had been dealing with the mill for around eight weeks to try to resolve the issue of ownership of that debt.
“We have yet to receive legal confirmation that that the growers are responsible for that debt.
Local cane farmer Bob Bennett maintains the debt should belong to the mills and QSL.
“This debt has come about through non-delivery and poor forward estimates by the mills coupled with an aggressive forward selling regime by QSL. We as growers had no access to the Raw Sugar Supply Agreement (RSSA).
“We’ve basically got a non-disclosed contract overriding our supply contracts that could cost us the shirts off our backs if the mills have their way.”
Fellow farmer Trevor Biggs asked, “At what point does the responsibility shift to the mill? If you can go back to your supplier at any time to recover your losses you can’t go broke. This is unconscionable conduct at its worst.
“We believe the capital reserves on balance sheets at the mill should be utilized for this bill. There’s too many marginal growers that can’t sustain this sort of a hit,” Mr Biggs said.
CEO of the Proserpine Co-operative Sugar Milling Association John Power held firm that this was an industry debt and the industry as a whole should be prepared to pay.
“They (the farmers) get two-thirds of the revenue and they get two-thirds of the risk,”
“This has been a constant for many years. Unless people want to change the split of revenue sharing why would anyone in the milling industry take on more risk?
“The risk has always been there, but it took the terrible rainfall of 2010 to bring it out.
Mr Power said QSL have committed to discussions, starting next month, which will look at how the pools operate both now and in the future.
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