Townsville Bulletin/Townsville Sun (Australia) | By MARGARET MENZEL | March 8, 2004
RECENT claims that the sugar industry is "unsustainable" completely miss the cause of this industry's crisis.
Farmers have been told for almost 20 years that their future lies on the export market, that Australian farmers are going to benefit from economic minnow, Australia somehow miraculously forcing the economic giants -- the US, EU and Japan -- to abolish their huge domestic agricultural subsidies and open their markets. The reverse has occurred.
To "help" the sugar industry to be "ready" for this wonderful day, successive Labor and Coalition governments progressively abolished the $115 tariff on sugar, which had given us a premium into the domestic market, our largest market.
Then, in the name of "deregulation", they did what no other sugar producing nation has done -- they fixed (i.e. regulated) the price of sugar into the domestic market at the corrupt world price. This price is currently about US5.5 cents/lb, which is less than half the average world cost of production.
Are Australian sugar farmers efficient? Yes! Our productivity figures outstrip those anywhere in the world, including Brazil.
Despite higher wages and input costs, we remain the most cost effective canefarming sector in the world. The US subsidises the price to US22 cents/lb, the EU and Japan even higher. The only country remotely competitive with Australia is Brazil, with its low-paid, rural workforce and cross-subsidies from ethanol production.
Federal government policy has failed to have the WTO wind back world farm subsidies, or pry open the door of the US market to Australian farm products, as indicated in the recent proposals for a FTA.
Instead of recognising that 20 years of government policies have put us in the red, have driven us to near bankruptcy, the economic rationalists wrongly conclude that the industry is "economically unsustainable in the modern world".
The facts say otherwise.
MARGARET MENZEL,
Claredale.Townsville Bulletin/Townsville Sun (Australia):
