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Water charge reset needed to lift heavy burden on sugar industry

3 April 2020: The Australian Sugar Milling Council (ASMC) will next week release its detailed assessment of the impact of the proposed Queensland Competition Authority (QCA) price increases on sugar communities. 

QCA has recommended significant increases in water charges for irrigators over the period 2020 to 2024.

On behalf of its sugar-reliant communities, ASMC is analysing the cost/benefit of a reset in the QCA’s recommended prices from a social, economic and environmental perspective.

The results show that communities reliant on sugar production stand to benefit enormously from water prices that are more affordable.

“Water costs have increased relentlessly, year on year,” said David Pietsch, Chief Executive Officer of ASMC.

“The projected additional costs are unsustainable and left unchecked, will result in further decline of the Queensland sugarcane crop and financial stress for many sugar mills,” added Mr Pietsch.

“Our economic modelling indicates that resetting irrigation prices to match growers’ capacity to pay could boost revenue for the sugar industry and Queensland communities by more than $220 million over the period 2020 to 2024,” explained David Rynne, ASMC’s Director of Economics, Policy and Trade.

“Ever increasing water bills, payable outside cane payment periods, deter growers from irrigating, especially when global sugar prices are low.

“When growers have confidence to irrigate at the right time in the crop cycle, everyone gains because fast growing cane takes up more fertiliser, better competes against weeds, and the increase in crop yield improves mill efficiency and sustainability,” added Mr Rynne.

The full results will be released next week.