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B2004/33 - Boswell condemns Monday morning quarterback professor

The author of a new report on the sugar industry released by the Centre for Independent Studies is nothing more than a “Monday morning quarterback” at university with no experience in the real world, the Leader of The Nationals in the Senate, Ron Boswell, said today.
The report, entitled “Sweet and Sour Pork Barrelling: the case of Queensland Sugar”, was done by Australian National University economics lecturer Dr Alex Robson who argues against a further federal assistance package.

“These sorts of ill-informed and unsubstantiated reports are nothing but academic codswallop.

“The current hardships faced by the sugar industry are beyond the industry’s control - largely a result of lower returns on sugar brought about by a corrupt world market and world subsidies worth about $18 billion.

“Dr Robson’s criticism of single desk selling, which allows a mill to capture a premium and prevents 24 mills competing the price down against each other, shows a complete lack of understanding of primary industry.

“Perhaps it would be more productive for Dr Robson to work out some model that will tell Australian growers how to compete against $18 billion worth of subsidies.

“Despite all this, in productivity terms such as sugar per hectare and milling efficiencies, the Australian sugar industry is ranked number one or two in the world. Our growers are competing against subsidies, up against the treasuries of the EU and America, and yet they’re exporting 90% of the product overseas. No amount of deregulation will change this.

Dr Robson’s claim that “The size and location of individual farms, as well as the amount and type of cane that can be grown, are determined collectively” has not been the case for ten years.

“The area under cane in Australia has virtually doubled in recent years with the only restriction on growing cane being the capacity of the mill to process it.

“The Australian Government recognises the vital contribution the industry makes in many regional communities, particularly in Queensland, and we are working closely with the sugar industry to develop a substantial assistance package to help secure a viable future for the Australian sugar industry.

“The sugar industry recognises that it needs to reform. The Australian Government and the industry agree that reform is needed for the industry to become more competitive in the global market, with the industry recently agreeing on a model for regulatory reform with the Queensland Government.

“On the federal side, we are committed to providing further assistance to the industry to help manage the change process and the realities of a less regulated environment.

“With many growers struggling financially, the industry needs assistance if it is to reform quickly
and explore new opportunities for diversification, restructuring and rationalisation.

“What the sugar industry would welcome from academia would be some alternate uses for sugar cane, some use of byproducts, or some constructive ideas rather than using an expensive and flawed economic study to kick an industry when it’s down.”