Fed: Sugar farmers close to $300m industry package

AAP General News (Australia)
04-20-2004
Fed: Sugar farmers close to $300m industry package

By Shane Wright

CANBERRA, April 20 AAP - Sugar producers are close to getting an almost $300 million
federal government package that will pay farmers to leave the industry.

Federal cabinet is expected to consider the package at its meeting in Melbourne on
Thursday, with the details to be announced in Queensland early next week.

It follows the failure to have sugar included in a free trade agreement with the United States.

The government pledged to help the industry, a victim of a corrupted world market and
inefficient practices in Australia, become more efficient and find new markets.

The peak Queensland industry organisation, Canegrowers, had been hoping for a package
worth $600 million that would include some type of direct payments to farmers to cover
the shortfall between the prices they receive and those on offer to subsidised competitors.

But government sources have told AAP it will be much closer to $300 million, with so-called
"separation packages" worth around $100,000 on offer to farmers willing to leave the land.

Prime Minister John Howard, who last month made a trip to some sugar cane communities
in northern Queensland, today declined to reveal any of the detail of the proposed package.

"As to the size of any support package, well when we are in a position to announce
the package we will," he told ABC radio.

"It is getting close, but I'm not going to speculate at this stage about the amount of it."

The industry has already welcomed a government backdown on the excise treatment of
ethanol, a biofuel that can be derived from both sugar and grain.

The government has also unveiled a $21 million income support program, but this has
come under attack from the industry because of its tight eligibility criteria.

Proposals being considered for the new package, which will be discussed with industry
leaders in coming days, include incentives for farmers to amalgamate properties into larger
commercial enterprises.

One of the problems with the sugar industry is its small-scale nature, with families
existing on small properties that have low economies of scale.

Last year the government put together a $120 million sugar industry package that is
being financed by a tax on sugar sales.

But the low take-up rate has undermined the package's support in the industry.

The Australian Manufacturing Workers Union is this week swinging through key sugar
towns, including Townsville, Tully and Mossman, to drum up support for a large industry
assistance package.

AAP sw/lb/de

KEYWORD: SUGAR

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