TULLY cane growers will start the crush with more certainty after a 18-month-long supply contract stalemate with Tully Sugar Limited was resolved.
In a landmark move for the industry, the federal government appointed an independent arbitrator under the Mandatory Sugar Code of Conduct last December to resolve a contract supply dispute.
The appointment came after Tully Canegrowers and Tully Sugar Limited failed to agree on the terms of a cane supply contract for the 2020 season and beyond despite more than a year of negotiations.
At the heart of the dispute was a proposal for the Tully Sugar Mill, owned by Chinese agricultural giant COFCO, to transfer a harbour cost for sugar shipments on to growers, along with plans to extend the crushing season.
Tully Canegrowers chairman Jamie Dore said growers were relieved to start the 2020 harvest with a workable contract to supply their local sugar mill.
Mr Dore said the 60-day process with an appointed arbitrator was arduous and the outcome, in terms of the detail of the outstanding issues, was mixed.
"What we got was a determination and a resolution. The deadlock with Tully Sugar Ltd was broken via a fair process and that provided the certainty that we all need to get on with the season ahead," he said.
"Without recourse to the code we would still be sitting here, five weeks from the start of the season, without an acceptable aane supply agreement for members to consider.
"The code has delivered for growers and given us an outcome. Our experience shows that the code extremely valuable and it works."
Mr Dore said when making his determination, the arbitrator made clear that he did not want to upset the existing commercial balance between the mill and growers.
"Very much maintaining the status quo was a guiding principal and he considered it a commercial agreement that had been negotiated and did not wish to take financial gain from one party and penalise another.
"Tully Canegrowers Limited is looking forward to resuming a normal business relationship with Tully Sugar Limited, with both parties successful and profitable."
The cane supply agreement is now being presented to Canegrowers Tully members to sign.
Canegrowers Chairman Paul Schembri said the organisation had argued strongly for the code when it was under consideration by the federal government in 2017 and defended it strongly during a review last year.
"What the Tully outcome shows is that the code does work, it does what it was designed to do - provide a mechanism to resolve dispute between growers and millers," Mr Schembri said.
"Since our industry code was put in place, codes have been developed for dairy, horticulture, grain handling.
"Most Australians believe that Australian farmers need a fair go and that codes help to deliver that in situations where there is a power imbalance in negotiations."
