A proposal for a bio-energy mill and a bid to control rail access have polarised cane growers in Ingham. MARTIN RASINI Reports
A GROUP of Herbert River canegrowers with a vision for the future of their Ingham-centred community are battling vested interests in a bid to make it a reality.
More than 200 of the district's 600 growers are understood to have committed to taking stakes in North Queensland Bio Energy, a public, unlisted company formed to develop a $400 million, 2.5million-tonne mill about 4km south of Ingham in which sugar is complemented by ethanol production and energy generation.
Many supporters believe they must take control of milling and benefit from cane's byproducts if the cane industry is to have a future in the Herbert River district.
NQBE director and chairman canefarmer and accountant Robert Carey says the mill scheme grew out of concerns about growers' reliance on a single product and the huge price variations in the raw sugar market.
He says the company hopes to be in a position to start construction by June next year and complete the project ahead of the 2013 crushing season.
The mill will contract with growers for cane supplies and needs access to the Herbert River's cane-rail network for delivery of the feedstock.
However, this has been refused by Sucrogen, operator of the system which holds two mills in the district, Victoria and Macknade, and NQBE is seeking a declaration from the National Competition Council.
A declaration would give third parties the opportunity to negotiate access conditions with CSR, setting a precedent that changes the commercial landscape in which millers operate.
The competition council intends to bring down a draft ruling within days, with the declaration expected soon after the close of a 30-day period for comment.
Sucrogen, Australia's principal sugar miller, is being divested by CSR and some speculate that, if the competition council rules in favour of the applicant, the new mill's shadow could impact on the value of the Herbert River assets.
Access to the rail network is one of two hurdles faced by NQBE, with the second being water.
The State Government on January 18 imposed a moratorium on water use from Crystal Creek to the Daintree while it maps out a usage plan for the future.
NQBE is working with the government to find a solution and Mr Carey says there appears to be scope in the moratorium legislation to allow access to water.
Grower body Canegrowers has become entangled in the mill issue, with some supporters feeling aggrieved about a lack of debate on the proposed facility at local committee meetings.
Renzo Di Bella, a Canegrowers' member for 55 years and a local committee member, has resigned over a perceived lack of support for the mill.
Mr Di Bella says he is astonished the organisation has not seen fit to support the project and is disappointed with the actions of local committee chairman Alf Cristaudo whom, he claims, has gagged debate on the project.
‘‘What mill proponents want to know is whether his allegiance is to growers or to the incumbent miller,'' said Mr Di Bella.
‘‘We want to see our sons and grandsons remain in the business and, with the high cost of growing cane, we see diversification and multi-product mills as the way of the future.
‘‘Canegrowers does not meet the expectations of many members.
‘‘We are very concerned about its submission to the competition council, which was done without consultation and we want to see it withdrawn.
‘‘People such as myself, we must look to the futures of our families and our community and Canegrowers must look take a good hard look at itself and support its members.
‘‘A new mill is a must for the Herbert River district.''
Fellow farmer Erroll Cantamessa believes that, if the new mill does not eventuate, canegrowing in the Herbert River district has no future.
‘‘Growers need more return from their crops,'' he says.
‘‘The industry is set up on the basis of a 100-year-old formula where the miller owns any byproducts, and the system makes it hard for growers to make a dollar.''
Mr Cantamessa says farmers need a strong Canegrowers, and he and others want a change in structure at local level whereby its affairs are run by a management professional on contract.
‘‘This is what big corporations do and if executives don't perform they don't stay.
‘‘At the moment we have people who have been in roles for many years and with set ideas.
‘‘What we need is new blood, people who think outside the square.
‘‘When the mill was first mooted there was a meeting and, as a grower, I wanted to see Canegrowers representatives ask questions on my behalf.
‘‘Growers pay levies to keep these people in jobs, but it didn't happen.''
Mr Cristaudo, who is chairman of Canegrowers as well as of the Herbert River committee, says the floor is open for debate on any issue at branch committee meetings.
‘‘The proposed mill is a commercial project and it must be sold to the community by its proponents.
‘‘Canegrowers cannot influence, and cannot be seen to be influencing, any grower in relation to such a matter.
‘‘What we have said is that it is up to the proponents to put a full blown proposal and a prospectus to the community, whose members can then make their own judgments as to whether it is viable and a good investment.
‘‘We also have offered to negotiate supply contracts with the mill's owner on behalf of growers and said that, while we cannot give financial advice, growers should not make commitments or contractual arrangements with any party without full knowledge.
‘‘When we have the detail-who will own it, what will be its structure and so on-Canegrowers can do an assessment and there can be talk.
‘‘Our responsibility is to all growers, including members who are proponents of the mill, and we cannot become involved in providing financial advice on commercial projects.
‘‘We must look at such matters dispassionately.''
Mr Cristaudo says once the National Competition Council makes a declaration, it stands.
‘‘Anyone who then wants access to the cane-rail network must negotiate with CSR and if the parties cannot reach agreement the matter goes before the courts,'' he said.
‘‘A declaration would set a precedent for the industry.''
Canegrowers' submission to the competition council says the grower body does not ‘‘at present, have any particular knowledge or insight into the business case for constructing a new mill and, while supportive of competition for the crushing of cane, would not wish to see the establishment of an enterprise that cannot compete with the strong incumbent diverting resources away from more productive investments''.
Chief executive Ian Ballantyne says the submission was requested by the competition council and takes a neutral stance, with the statement reflecting a genuine concern for the interests of members.
‘‘This response is an objective commentary as to the issues arising from a third-party access arrangement,' he says.
‘‘Commercial investment decisions are for individuals to make and certainly not the role of a membership-based organisation.''
