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Sweeter water prices will boost State’s COVID economic recovery

21 August 2020 | Sugar millers have called for urgent talks with the Queensland Government to ease irrigation costs and deliver the much needed jobs and agriculture industry growth that Premier Annastacia Palaszczuk is counting on in the State’s recovery from the COVID-19 crisis.

The Australian Sugar Milling Council (ASMC) welcomed the recognition of sugar’s importance to the economy in the Queensland Government’s Economic Recovery Plan released yesterday, but hoped strategy will be actioned through more supportive water pricing.

“The Queensland sugar industry has persevered during the pandemic downturn and played an integral part in keeping the State in a strong economic position,” ASMC chief executive David Pietsch said.

“We can help Queensland back on the road to recovery and support the Premier’s focus on job creation, but not without a return to affordable water pricing levels.

“With the release of the Economic Recovery Plan yesterday, we are seeking urgent follow-up talks with the Government.

“We are calling on them to bring their economic strategy to life by ensuring the Queensland sugar industry is given every opportunity to help our State’s post-COVID recovery, particularly in regional Queensland,” he said.

A report by ASMC* handed down in April demonstrated that a 25 percent reduction in the price of irrigated water could deliver up to $220 million in additional economic activity and an additional 140 direct jobs and indirect jobs. The additional revenue would also assist mill viability given today’s low sugar prices.  

This falls within range of the LNP’s stated election commitment to reduce irrigation water prices by almost 20 percent from July next year.

Government froze irrigation water prices in May, but only for 2020/21 following an earlier recommendation by the Queensland Competition Authority for further substantial price increases in the regulated Water Supply Schemes that service the State’s cane fields.

“It is clear the severe economic impacts of COVID-19 will be with us all for years.  We need a longer-term commitment to reduced water pricing,” Mr Pietsch said.

He said about two-thirds of Queensland’s sugarcane production was dependent on irrigation and water represented more than 15 percent of a cane irrigator’s total farm costs.

Mr Pietsch said the Queensland sugar industry generated more than $4 billion to the Queensland economy each year and supported more than 23,000 jobs throughout the State, but the industry faced significant challenges from flat-lining productivity, increasing overseas competition and depressed global sugar prices.

“Lower water costs translate to more efficient irrigation use and higher cane yields which will significantly relieve the current challenges faced by many cane farming enterprises and sugar mills, as well as businesses heavily reliant on them such as local service providers,” Mr Pietsch said.

See https://asmc.com.au/qca-water-reset/