Monthly Archives: June 2014

Beef Levy Inquiry Op-Ed – “Inquiring minds call for change”

27 June 2014

In the coming weeks, the Federal Senate’s Rural and Regional Affairs and Transport References Committee will deliver its interim report on the status of the grass-fed beef levies structure.

This follows months of listening to the concerns of producers and other industry stakeholders across all corners of the nation.

As the Australian agriculture sector locks its sight towards capitalising on the increasing numbers of middle class across China and the rising fortunes of Asia more generally, both government and industry are paying closer attention to the health and vitality of the structures that underpin our farming economy.

There perhaps has never been a greater time, at least in recent history, where agriculture has been so central to the focus of the law and policy making agenda.

Both State and Federal Governments have identified agriculture as one of the economic pillars that will deliver wealth and prosperity for the coming generations, with a number of White Papers and other long term planning strategies in development.

As such, the grass-fed beef levies inquiry has been a very worthy and timely focus for the Federal Senate to commit to undertaking.

This is an inquiry that really should be carried out every decade or so to monitor how effective government and industry funds have been in delivering real outcomes and increased profitability for the red meat sector.

The sheer volume of submissions and stakeholders participating in this Senate Inquiry indicates both the concerns inherent in the existing levy structures as well as the desire of all elements of the sector to respond to and repair these issues.

For any Senator attempting to deliver potential solutions through an inquiry, high levels of participation from relevant stakeholders eases the burden of determining those keys concerns, and increases the likelihood of a committee providing relevant and workable recommendations.

Due to my role as a Senator participating in the formulation of the upcoming interim report, I am legally forbidden from publically discussing or speculating on the final outcomes of the Federal Government report.

Despite this, there are a number of observations that have trended strongly throughout the course of the public hearings process and the almost 200 written submissions.

It is worthy to consider some of these factors that each participating Senator is currently grappling with:

• Peak Industry Body Participation:

It is glaringly obvious that participation in peak industry bodies is declining and there is strong cynicism among stakeholders about their ability to deliver relevant outcomes.

It is clear that some peak industry bodies are not meeting public expectations and there needs to be more reporting of their activities and further engagement to discover what lay at the heart of these issues.

However, rather than simply walking away, the onus is equally on individual producers to take more responsibility to engage with these peak bodies to facilitate change.

• Funding of Peak Industry Bodies:

Several of the peak industry bodies have argued their apparent funding shortfalls hinder their ability to provide the desired level of representation and thus, struggle with wider industry relevancy.

Central to this problem is the capacity of Cattle Council of Australia to adequately oversee and direct Meat and Livestock Australia (MLA) using its limited resources.

There have also been accusations that the independence and oversight capacity of Cattle Council is jeopardised by its cross-funding arrangement with MLA.

Furthermore, Cattle Council’s capacity to lead and instigate national beef sector policies is extremely limited with inadequate resources.

Frankly, this current scenario can only serve to hinder farm gate profitability.

It is clear producers want MLA to be more transparent in its research and development processes and projects, as well as its decision-making when awarding tenders.

Again, the weakened and limited resources of Cattle Council, with its oversight capacity, compounds this problem.

And, as such, producers have limited opportunity to influence the decisions and direction of levy expenditure.

• Red Meat Advisory Council (RMAC) structure:

The ongoing accusations of bias towards processors, both in the RMAC board make-up as well as in the decisions made by RMAC, continue to divide the sector.

For example, it is clear that RMAC was divided on how to tackle the live export suspension in June 2011.

AMIC was clearly at odds with the production-based members of the RMAC board who represent those who profit from the live trade. 3

This rift among industry was exposed at a critical juncture, resulting in inadequate advice being provided to the minister, which, it could be argued, prevented swift and decisive action from the beef sector – leading to a time lapse that animal activists clearly benefitted from.

The beef industry does not benefit from such self-defeating and blatant politically motivated actions.

• Processors and Producers

Finally, perhaps the greatest challenge facing our beef sector is the ongoing conflicts between grass-fed beef producers and the processors, especially in how it relates to profitability at the farm gate.

Federal Agriculture Minister Barnaby Joyce has repeatedly shared his driving commitment to deliver public policy that leads to a better return at the farm gate.

As total farm debt continues to outstrip total value of farm production, industry stakeholders are right to question if their levy dollars are being wisely spent.

Both processors and producers contribute to, and share any benefits from, marketing and research and development programs.

However, processors are at odds with producers even though both are in the same game.

Processors and exporters are margin operators.

Their incentive is to reduce the livestock cost rather than focus on ways to value add and increase their margins and sale price.

As this senate inquiry has clearly established, without a willingness for all sides to better coordinate with, and compliment, other elements of the supply chain, the underlying problems inherent in the system will only serve to prevent the beef industry from reaching its true potential in this ‘Asian Century’.

Senator O’Sullivan warns Wilmar Sugar to respect the Growers’ Choice

26 June 2014

Queensland Nationals Senator Barry O’Sullivan has called on Wilmar to behave as a responsible corporate citizen and officially recognise the two-thirds economic interest cane growers hold in their product.

Rising to his feet in the Federal Parliament Senate Chamber on two separate occasions over the past fortnight, Senator O’Sullivan said growers servicing Singapore-owned agribusiness Wilmar Sugar’s eight mills across Queensland should be provided with the right to choose their preferred sugar marketing outlet.

He said Wilmar’s intention to exit the QSL single-desk marketing arrangements from 2017 ignored long standing industry agreements that cane farmers held a ‘Grower Economic Interest’ (GEI) in two-thirds of the sugar produced throughout the supply chain.

“For almost a year, Wilmar endeavoured to negotiate with QSL to make arrangements that allow them to do direct marketing with the growers’ interests,” Senator O’Sullivan told the Senate.

“During that time, the matter of grower economic interest was discussed. It was on the agenda, and the parties were endeavouring to try and make a determination that would enshrine that interest in future contractual arrangements.

“Eventually, Wilmar took the decision to withdraw from QSL. Wilmar decided that it would take not only its economic interest in the sugar that it processed but also that of the growers.”

Senator O’Sullivan warned Wilmar that its intended course of action could be in stark contradiction to its pledges to the Federal Government when seeking Foreign Investment Review Board approval in 2010.

Wilmar expanded into the sugar business in 2010 through the acquisition of Sucrogen Limited for $1.75 billion.

On 8 November 2010, then-Federal Treasurer Wayne Swan issued a press release announcing Wilmar’s FRIB approval.

The press release states: “Wilmar has informed FIRB that it does not anticipate any significant changes to Sucrogen’s operations and its management.”

Source:http://ministers.treasury.gov.au/DisplayDocs.aspx?doc=pressreleases/2010/078.htm&pageID=003&min=wms&Year=&DocType=

“I would argue that there is no greater or more significant change than what Wilmar is currently proposing for our sugar industry,” Senator O’Sullivan said.

“Just as the ACCC has been called upon by Canegrowers and the Queensland Government to investigate Wilmar Sugar’s proposal, the Foreign Review Investment Board should also investigate whether this company is operating in a manner that is entirely consistent with the undertakings it made when seeking approval to acquire Sucrogen Limited from CSR Limited.

“We should all approach this company’s public statements with caution.”

Senator O’Sullivan warned Wilmar it faced an ‘unrelenting’ public campaign from Federal and State parliamentarians until it respected the growers’ choice.

“I call on Wilmar to respect the 100-year convention of the 4000 families who have nourished them to date in my home state,” Senator O’Sullivan told the Senate.

“The growers’ choice is not a request but a demand on Wilmar that this company recognise the economic interest belonging to cane growers.

“It recognises the ability of grower-producers to harvest the benefits and expose themselves to the risks that markets produce that they and their families grow.

“Those of us who have any capacity to influence the decisions will not relent until such time as those growers’ interests are recognised.”

Media Contact: Troy Rowling 0400 386 666.

Caption: Senator Barry O’Sullivan speaking in the Federal Senate Chamber.

Public call on Wilmar to take action

25 June 2014

Senator O’SULLIVAN (Queensland) (19:28): I rise tonight to continue to speak on a matter that is, on the one hand, of great interest and, on the other, of great concern in my state of Queensland. To reference the subject of my speech, it is about the marketing arrangements that exist in the sugar industry in my home state. For over 100 years, the sugar industry in Queensland has had a single marketing desk. For a long period of time the industry was regulated but for a considerable period of time now it has been unregulated, with Queensland Sugar Ltd marketing the economic interests of sugar growers right throughout the state internationally.

QSL is a not-for-profit company that is owned by the growers and millers in that state, where any profits generated by their trading performances are returned to the growers, producers and millers in the form of enhanced and attractive payments in the pools that are offered in the year following. QSL was not formed accidentally; it was the result of a royal commission in my home state in 1912, where, with the development of QSL, an attempt was made to deal with an imbalance in market power that was held by the millers over the interests of the growers. It was created so that the rights of, and the risks and rewards to, growers and millers were equalised and balanced, producing what is now known as the economic interest of growers in two-thirds of the sugar that they deliver to mills for processing. This two-third/one-third agreement has been enshrined contractually for generations within the sugar industry through the raw sugar supply agreement between the millers and QSL and the supply agreement between growers and their mills. It is regarded as a longstanding convention and it is regarded to be in the economic interests of Queensland growers.

On 20 May this year Wilmar International, a multinational company based in Singapore, who has a substantial interest in the sugar industry in Queensland —in fact, control over two-thirds of the sugar that is processed in my home state—notified QSL that it would be withdrawing from the collective single desk marketing arrangements, effective 2017. This has resulted in a significant reaction from the growers in my state. In fact, we have established that over 1,600 —getting up towards 50 per cent—of the grower-producers in Queensland have written to Wilmar. These include, I understand, most Wilmar grower-producers and suppliers, as well as growers who are not attached to the Wilmar mills, who have indicated to Wilmar that they do not want the QSL arrangement weakened by alternative marketing options.

Before anybody challenges us in relation to free market arrangements, there is no challenge to the ability on the part of Wilmar to be able to market their share of the sugar. This is about Wilmar properly recognising 100 years of convention, where growers have a two-third interest in that product when it is delivered to their mills. Sugar is somewhat different to other agricultural commodities in that there is quite a short harvest period, where the harvest is delivered to the mills in the region predominantly by a light rail system. Unlike grains, sugar cannot be stored. Therefore, the owners of the sugar—the grower-producers—do not have the same ability as a grain producer to bide their time with respect to where and when they might market the commodity. Unlike grain, once harvested, sugar has to be processed within a matter of hours, otherwise it starts to lose moisture, and then the capacity to process the sugar content diminishes to a point where the sugar is effectively spoiled after a short period of time.

The challenge here is to be able to accommodate Wilmar’s lawful rights to be able to market sugar but not at the expense of taking away the rights of grower-producers. Grower-producers in my home state have made very substantial investment decisions over the last 100 years, and in some cases over recent decades, based on the prospect that they will produce a commodity in which they will have a continued interest after harvest and after processing into the marketing arrangements. This affords our grower-producers in Queensland the opportunity to decide whether they engage in selling their sugar interest through a low-risk pool, a medium-risk pool or indeed a high-risk pool. They know that, no matter what the outcome, because they are shareholders along with their miller partners, they will share in any of the benefits that are developed as a result of those sales.

Additionally, in 2010, Wilmar and other millers had no difficulty at all in recognising this economic interest to the growers, when QSL, due to inclement weather that prevented the harvest from being completed, were unable to meet about $110 million worth of international contracts. This was the cost of the penalties incurred by that company. Those penalties were properly, in recognition of growers’ interests, sheeted back home to the growers and the millers. The growers in my state collectively stumped up about $66 million.

All I want for my state, and all the grower-producers in my state want, is a free market environment. For that to occur, there has to be choice, there has to be transparency and there has to be competitive tension —that is, of course, unless it is a single desk that is owned, where the interests of that single desk are owned by the grower-producers. The call has gone out to Wilmar to consider—and it has been coined as a phrase—the growers’ choice. The growers’ choice is not a request but a demand on Wilmar that they recognise the economic interest of these growers that has existed for over 100 years and that recognises the ability of grower-producers to harvest the benefits and expose themselves to the risks that markets produce for the produce that they and their families grow—and in some instances have grown for four or five decades. I have said before—and others have said it also— that, collectively, those of us who have any capacity to influence the decisions that will result from this departure of Wilmar from QSL will not relent until such time as those growers’ interests are recognised.

I understand that our agricultural minister in the state of Queensland has urged Wilmar to consider this. I understand that our federal agricultural minister has made like statements and intends to elevate his rhetoric in relation to this matter in the near future. I call on Wilmar simply to respect the 100 year convention of the 4,000 families who have nourished them to date in my home state.

The ACTING DEPUTY PRESIDENT ( Senator Gallacher ): Earlier Senator Waters sought leave to table some documents. Now that the documents have been circulated, is leave granted?

Leave granted.

Senate adjourned at 19:38

AHUS and Bianca Scott

24 June 2014

Senator O’SULLIVAN (Queensland) (20:30): I rise tonight to continue a discussion I started in this place last week, regarding a vulnerable group of Australians who suffer from the medical condition of atypical haemolytic uremic syndrome. This condition is a very aggressive medical condition that promotes organ failure in patients who are exposed—in particular renal failure followed by liver failure and in many cases the patients will go on to suffer brain damage. The condition is often measured in a patient’s life in weeks rather than months and certainly not years. For many this condition is ultimately life-threatening and for some fatal.

For those who do not surrender their life to this condition they often confront a lifetime of living with the results of organ failure—many of them not eligible for corresponding live transplant arrangements because of the condition. I said last time and I will continue to repeat each time I take to my feet that I stand here to speak for those who do not have a voice —for the grandparents, parents, brothers and sisters, uncles and aunties and the patients themselves, who have been engaging with me and other senators and members of the House of Representatives.

There are estimated to be 70 Australians who suffer from the condition, with 22 of them in acute stages of this disease. Not only are their voices silent, but there are very few of them to give momentum for those voices to be heard. Without people like myself and others in this parliament putting forward their case, the condition of their lives will remain in the balance. There is a solution and that has to do with a drug called Soliris. It is a very expensive drug; it costs about $. million a year per patient. The trials are yet to determine whether these patients need to remain on the drug for life or whether exposure to the drug over set periods of time is beneficial. Various time iterations have been presented but up to 12 months may tide them through, protect their organs and their lives until the condition goes into some form of remission. The drug was the subject of an application to the former government, but it was rejected on the basis of clinical trials. Another application was lodged in late 2013 and considered by the PBAC in March 2014. The PBAC have in principle approved the drug for use and have broadly agreed, as I understand it, with the cost impost of the drug, but there are some delays due to negotiations between the health department and the company about the terms and conditions of the managed entry scheme that will apply to Australian patients.

Broad trials for these boutique drugs for rare disorders cannot be conducted and so some trial and error is involved. This particular drug has only been used in the treatment of this condition for three and a quarter years internationally and so there is much more to be learnt both about the performance potential of the drug and any long-term negative impacts it might have on patients who are exposed over longer periods. The difficulty is that, whilst the Department of Health has agreed with man of the terms and conditions of the manufacturer from the United States, there is disagreement over the government’s resolve to ensure that this drug is accepted on terms that meet the national interest and the requirements of the patients. I think some of the conditions that the department is negotiating are very fair and reasonable in the circumstances, but they are asking the company to enter into arrangements where if the drug proves to be unsuccessful with particular patients —and I understand patients react differently to the performance of this medicine—then Australia reserves the right to withdraw from the arrangements. I think that is perfectly reasonable.

I am satisfied that great progress has been made in these discussions. I think they are at a very advanced stage. The difficulty now rests in convincing the pharmaceutical company to give access to some of these patients—and there are 11 Australians who are in critical, immediate need of this drug to maintain their health. If negotiations with the PBS are to go on, as I anticipate they might, and are measured in months, then indeed we will have young Australians—beautiful young Australians like Bianca Scott of the Gold Coast in my home state of Queensland—who will suffer from organ failure, from which they might not return. It may well—and I hope I do not bring Bianca or her family any distress in saying this—put her life at risk. In fact, it will put her life at risk.

That family has spent $235,000 with this company to buy the drug, at a personal level, to this date. They have run out of the capacity to do that. I stand here tonight, as I did the other day, and I call upon this pharmaceutical company. This company is engaging with our country, which is giving favourable consideration to entering into arrangements with that company for tens upon tens upon tens of millions of dollars of Australian taxpayers’ money to subsidise and fund this important drug. This is a company that has a turnover of $1.5 billion. This is a company where the CEO has an annual salary of $14 million and $168 million in share options. I call on them tonight to give consideration to extending access to this drug to these 11 Australians who are in critical need of it at the moment, until such time as we have properly and sensibly worked through the issues associated with the terms and conditions for access to this drug.

I say to the CEO of Alexion tonight—who is, as we speak, I suspect, lying warm and fair in his bed in the United States: tomorrow morning he should ask himself a question; he should close his eyes and give consideration to what he would want his company to do in these circumstances if this were his daughter who faced this terrible plight in life. I am prepared, if he does that in a fair manner, to live with the decision that he takes. (Time expired)

Op-Ed – “Ron Boswell Tribute”

23 June 2014

In the coming days and weeks there will be a significant shift in the nature and fortunes of agri-politics in Federal Parliament with the departure of that almost irrepressible Queensland Senator, The Honourable Ron Boswell.

Boswell, who currently holds the affectionate title of the Father of the Senate, is the sixth longest serving Australian Senator since Federation.

Not bad for a self-confessed paint brush salesman from the Brisbane bayside suburb of Wynnum.

Without fear of contradiction from any side of politics, I can safely say that Boswell is one of those politicians who made it through their entire career without ever seeming to compromise their core base principles.

In his case, it was strong Christian values matched with an unshakeable belief in the traditional family structure, which served as his moral compass.

Over three decades of service, Ron Boswell’s adamant style of political doggedness has earned him the reputation of being an uncompromising advocate for small business operators and primary producers.

Whether it was defending the interests of a canegrower, professional fisherman or beef producer, Boswell provided a strong voice for the community on economic issues that impacted rural and regional Australia.

For many of us, the hallmark of Boswell’s service was the continuity of his courage as he voiced ongoing opposition to the tyrannies of extremist fanatical individuals and political groups – where Pauline Hanson and the League of Rights immediately spring to mind.

Senator Boswell was often a lonely and singular voice at the beginning of some difficult campaigns against the emergence of policies that he considered to be against the national interest.

Many of us have witnessed people of great intellectual prowess try and dissuade the old warrior from his chartered course of action only to be dispatched unceremoniously by the famous Boswell saying: “You’re off with the fairies if you believe that!”

He was a pioneer when in opposition to major ‘ticket item’ policies, such as the Emissions Trading Scheme (ETC), which he immediately understood (and was later proven correct) would have a debilitating economic impact on the household budget with no positive outcome capable of being measured – pain without the gain, if you like.

Ron Boswell showed an almost savant like ability to read the tea leaves when it came to the impact of Senate-preference arrangements across the federal polls.

There are a number of conservative Senators over the last 30-odd years who never would have seen service had Ron not secured the preferences of some of the minor parties.

There remains a strong argument that Ron was the only one who could negotiate the support of those minors, because they held him in such enormous respect.

I know it is a view held by former Prime Minister John Howard – another wily man who knew that the currency of decency and integrity still mattered to influential sectors of the nation’s political landscape.

Boswell’s Christian-based compass and his love of family, coupled with his inherent belief that all of his decisions needed to be tested against a central barometer of a civilized and productive society – led this outstanding man to make an outstanding contribution to Australian life over the past 30 years.

Ever the master of knowing ‘right’ from ‘wrong,’ this old school politician never allowed himself to make compromises that challenged his core beliefs and principles.

The Senate, and indeed the nation, will be poorer for his retirement on July 1.

Ron’s biggest challenge in retirement will occur if he sees a petite little thing in a pink dress with transparent wings and a star adorned wand running around the flowers in the garden.

He won’t recognise the creature for what it is, because his political pragmatism has prevented him from floating to that fairy-tale level of elevation, where these darlings reside.

It will be one of the only times I will have an edge on the great Senator Boswell when I tell him with some expertise that they are fairies – and they’re up there in their thousands.

Alexion Pharmaceuticals

19 June 2014

Senator O’SULLIVAN (Queensland) (18:32): I rise tonight to speak on what is a significantly important matter. As I lead into my speech, I want to briefly reflect on what I think is one of the most powerful honours attached to being a senator in this federal parliament. That is to give voice to someone who does not have the capacity to give voice to an issue for themselves. This evening I stand to speak on behalf of Ms Norma Hamawi, who is a grandmother. I stand here as a grandfather speaking on behalf of a particular grandmother, but indeed in spirit on behalf of many grandmothers, grandfathers, mothers and fathers around the country who are in a most anxious phase of their lives as their children and their loved ones—their sons, their daughters, their brothers, their sisters and, indeed, themselves in some instances—are suffering from a very severe and debilitating condition called atypical haemolytic uremic syndrome.

This disease seems to particularly strike young women in their teens and early womanhood. It is a violent disease. It is a disease that attacks their organs, in particular their kidneys, their livers and eventually their brain. Without treatment, they can suffer from complete organ failure in periods as short as three or four months. But there is a solution to their plight. The solution to their plight is a drug called Soliris, manufactured by Alexion Pharmaceuticals in the United States. Soliris has been here in Australia for a long time and is available through the PBS scheme for a particular condition, but not the condition that I have mentioned. Soliris is available today for patients in this country who suffer from another rare and disabling disorder called paroxysmal nocturnal haemoglobinuria. That the drug is not available to Australians who are suffering from aHUS.

Returning to where I started, Ms Hamawi is the grandmother of a beautiful young woman named Bianca Scott. Bianca is an 18-year-old student or immediate past student who graduated from her high school in 2013 with all of the wonderful promise that comes with that phase of our lives, as we finish our term of education and go out into the world to explore and to grow. Only that was not Bianca’s experience. Within a very short period of Bianca found herself on full-time treatment for an attack of this condition on her kidneys.

Because the drug is not available through the PBS at this time, her family set about trying to do what every parent and grandparent would do, and that is to supply their child with a chance at life—a chance at life in the same way that all of us in this chamber tonight and our colleagues in this entire parliament enjoy as I speak. The family have invested $234,000 of their money in purchasing the drug for young Bianca up until today. They have nothing left. This family has nowhere to go. They have no chattels left to sell. They have no friends or support in the community any longer, after they have enjoyed massive support from friends and family in being able to supply the drug to young Bianca for these past months.

The tragedy is that Bianca’s family went to the pharmaceutical company, Alexion Pharmaceuticals, with $15,000—their last $15,000—of the $24,000 required to buy these vials of life that last for two weeks. Twelve thousand dollars every week is the cost to this family to keep this little girl alive and to keep and protect her from long-term and debilitating organ failure. After paying the company $234,000 just in this calendar year, they expected that the company might, on a humanitarian basis, have provided their little girl with the drug this once, even though they cannot pay the full amount.

I do not intend to spend a lot more time on Alexion Pharmaceuticals tonight, because I have put a proposition to them, and I am hoping that somewhere in the world tonight it is under active consideration. They have an application before our federal health department. That application is making its way through the system, through the due diligence, as it should. To their credit, the company have a current humanitarian trial in this country where they are supplying this drug free of charge to 11 sufferers of aHUS. But the tragedy is that there are another 11 souls, as best I can research, who currently are in need of this drug.

I am calling upon the company to consider extending their humanitarian trial until such time as our health department has completed the due diligence required to make a decision with respect to the acceptance of this drug. I understand that that is at an advanced time. I also understand that there will be further negotiations in the coming weeks. I understand that progress has been made. But, if we are unable to get a positive solution with respect to this drug within the next couple of months, people like Bianca Scott will not be with us—or at least they will by then have suffered such extensive damage to their organs that it will not be able to be reversed.

I understand that Alexion are not a charity. I understand that they cannot go all around the world putting their drug, in which they have had considerable investment, out there for nothing. But I put a proposition to them that they do so, for free, as an investment in being a good corporate citizen in our country until such time as our health department has had the chance to properly and carefully navigate the path that is required to have this drug approved.

And I say this: I intend to rise to my feet at every opportunity I can over the coming days and the coming weeks and the coming months to progressively continue my call to Alexion. I will try and garner support from any quarter that I can by any method that I can until such time as they provide us with the relief that is required for these people whilst our government looks seriously at approving their drug on terms and conditions that are very financially favourable to them.

Ron Boswell Valedictory

17 June 2014

Senator O’SULLIVAN (Queensland) (18:30): Firstly —and briefly—to Senator Bishop, I have not served with you here for any length of time. But, as your name has been mentioned amongst colleagues, they have treated your character with great respect. It is often when those conversations happen without you— and particularly in this place in opposition—that you can take that with you. You are very well regarded, and I wish you and your wife the very best. I can see that your service to this nation will continue through another prism, and I wish you the very best in your retirement.

Whilst I have so much to say about Senator Boswell, I realised that time would not allow that. So I have afforded my chance to speak to Senator Boswell’s beautiful wife, Leita. Whilst it is my voice, it is Leita’s words that we will hear for the next couple of minutes:

“Love” was the instigator of Ron’s life into politics spreading across some 50 years. It was our love for one another and our marriage that started the journey.

My father, Bill Beattie, was a fruit and vegetable grower, later becoming the then Chairman of the Fruit and Vegetable Growers. He was an active member of the then Country Party.

The very first political activity that Ron and I attended together was when Dad was awarded Life Membership of the then Country Party.

It was Dad and I who mentored Ron into the understanding, ethos and structure of the then Country Party. Now it is Ron who mentors others.

Ron joined the Country Party in 1974 and like everything he does became fully involved at every level. We both remain committed to the Party— although with a changed name, some 40 years on.

His passion outside of his immediate family, Cathy, Stephen and me and competitive yachting, was to advocate the needs of small business and fruit and vegetable growers to government.

With our blessing, he was a candidate for the 1982 Senate election, taking his seat in 1983 when Cathy was 15 and Stephen 13. Since then we’ve supported him on 6 separate occasions as a candidate for the Senate, and more generally with 15 Federal campaigns and 14 State campaigns. We truly were and are his “true believers”, his cheer squad, and unofficial advisers.

Stephen as a young lawyer had a big role in helping Ron with his advocacy for small business. He explained to his father, the intricacies of the then Trade Practices Act—particularly Section 45 D—and the meaning of ‘unconscionable conduct’ in the context of small businesses.

Across the 31 years, we have not measured Ron’s political life in the number of speeches, deputations, meetings, visits to towns and communities or the extensive advocacy work but in terms of our family milestones—exams passed, graduations, jobs secured, yachting, birthdays, anniversaries, holidays, weddings, the birth of three darling grandchildren, Tom, Sophie and William, and, the tragic loss of our beloved Stephen to Heaven.

Like all husbands and fathers involved in the Parliamentary Service of our State and Nation, duty frequently calls them away at the time of special occasions. And, there have been many such occasions when Ron was elsewhere and we wished he was with us.

Although absent, we knew that wherever he was in rural and regional Australia, whatever he was doing, it was a worthwhile cause. Likewise, Ron knew that the family always stood firmly behind him.

The political journey is ending—and for us, it is with pride in Ron’s role as a Senator for Queensland. We, Cathy, Kent, Tom, Sophie and William and I, proudly, lovingly and sweetly welcome Ron home.

But, I suspect, that the inner eye of the champion and competitive yachtsman will espy another challenge. In this case I will not be the instigator. Whatever it is, we will love and support him.

They are Leita’s words, Ron.

Defending Grower’s Interests

17 June 2014

Senator O’SULLIVAN (Queensland) (21:50): I rise tonight to speak on a matter of quite significant importance relating to the sugar industry, predominantly in my state of Queensland. I do so in support of federal colleagues, the members for Hinkler, Capricornia and Dawson, and 4.000-odd sugar grower producers in their electorates spread out along the eastern seaboard of Queensland east of the Great Divide, stretching from Bundaberg in the south through to Cairns in the north.

For over 100 years—102 years in fact—there has been the equivalent of a single desk for the marketing of the commodity of sugar in this country. Given the bulk of that industry is in Queensland, I can say that there are no generations of sugar growers in my home state who have not practised the marketing of their commodities, the economic interests they have in their commodities, through a single desk. That single desk is operated through a corporation known as Queensland Sugar Limited. Queensland Sugar Limited is a not-for-profit tax-free company owned by the millers and grower producers in the sugar industry. There are seven milling companies and their canegrower suppliers in Queensland who have an interest in QSL and it supports the 4,000 sugar growing businesses that I mentioned earlier.

Within the scope of being the single marketing desk, QSL provides those growers and millers four key value offerings in the form of finance, pricing, marketing and logistics—the logistics involved with the efficient export of that commodity all around the world. The net sale proceeds and profits that are created by QSL when available are returned back to those growers and millers through the pricing pools through which they market their sugar and have done so—might I say again, to reinforce my earlier statement—for over 100 years.

Apart from those other services, QSL provides the industry with the option to conduct forward pricing through QSL’s books and offers a range of pooling options where pricing decisions are made on behalf of millers and growers within agreed risk parameters. This in turn provides both growers and millers with choices that allow them to take low risk, medium risk or high risk or any other hybrid pool for them to place their commodity for sale on the world market. It is a very efficient method; it is a very fair method; it is a cooperative method; and it is a method, might I say once again—and I will repeat myself a number of times during the course of this speech—that has lasted over 100 years.

There is a thing called the economic interest of the grower. In effect, a canegrower, when they harvest their commodity, takes their cane to a mill for processing. Very few growers have a choice of mills. The natural geographic structure of the industry is such that growers have to take their commodity to a mill. It is a commodity that spoils very quickly after harvest and the harvest has a very short concentration period. In some 11. to 12 weeks all growers within their season have to have their cane off and delivered to the mill. Those who have been through canegrowing areas would know that the commodity is transported in small light-rail networks to their local mill. It is not as if they get a choice—as we might see in grain, where they can store their commodity and wait for market conditions to change where they might get better price conditions —or have the ability to transport it by road or rail to take to, in this case, a choice of other millers. So there is a very special longstanding and unique relationship between a grower and their mill.

Historically, these mills were owned cooperatively by the growers themselves. However, for various reasons —and time does not allow me to go through these tonight—that tended to go out of trend in the eighties and the nineties. In fact, it could be argued that, during that time, there was insufficient investment in this sector by growers and millers in their own interest and it made the sector very vulnerable to investment. It in fact attracted a considerable amount of foreign investment. Those foreign investors need to be complimented. They came into our state, into our country, and invested large sums of money. There is an argument that, without them, the industry would have lagged behind best practices across the world, and there is no doubt that that would have ultimately had a negative impact on the industry and the marketing of this commodity.

But at the very heart of what I am speaking about tonight on behalf of these growers is the fact that there is a radical change at hand. In 2010 a company called Wilmar International invested about $1.75 billion in the cane industry in Queensland and, in doing so, they acquired significant control over about two-thirds of the commodity that is produced. Initially, at the time that this transaction occurred, Wilmar were familiar with the terms and conditions associated with the marketing of sugar in this country and in fact indicated to the Foreign Investment Review Board that they did not anticipate disturbing any of the significant arrangements that were in place with sugar in our state.

I do not want to make any comments that draw any inference that Wilmar are anything but a respected international corporation, to whom our industry, I think, is somewhat indebted given the timing and the extent of their investment in our country, particularly in this sector. They are a very significant company, headquartered in Singapore. They rank amongst the largest listed companies by market capitalisation in Singapore. They have operations in more than 20 nations, employ more than 80,000 staff and have some 300 processing plants around the world—not just in sugar but also in palm oil cultivation, edible oils refining, oilseed crushing, consumer pack edible oils processing, speciality fats and biodiesel manufacturing. In fact, they have made a considerable investment in ethanol processing in Sarina in Queensland—and for that they deserve our thanks and our support. However, Wilmar have decided to step away from the 100-year convention of marketing sugar in our state to go to their own direct marketing arrangements. This will truly have a significant negative impact on QSL, Queensland Sugar Limited. There are those who have expressed the opinion—and I am not equipped to determine whether the statements are accurate or not—that it will eventually mean that QSL will no longer be able to operate. Wilmar have a relationship with 1,500 of the 4,000 growers in the state, and their decision will impact directly on those growers, in the first instance, but it will then have an impact collaterally on the balance of the growers in the state.

It is at this point that the most significant note needs to be taken with respect to the core of the issue. For 102 years—I repeat, 102 years—these growers have had an economic interest in their sugar, and it has been on a two-thirds, one-third basis. What happens is that the grower takes their sugar to the mill, and it is recognised that two-thirds of that sugar, processed, belongs to them and one-third of the sugar belongs to the miller. These things have been enshrined in contractual arrangements—in cane supply agreements, which are the contracts between the growers and their mills, and in the millers’ raw sugar supply agreements; that is, the agreements between the millers and QSL.

Not only has this economic interest been recognised in these various contractual arrangements but, in 2010, Queensland Sugar Limited faced penalties of $110 million when it was unable to fill forward contracts that it had sold internationally. In line with the convention of economic interest, QSL—properly, in my view— put the burden of the $110 million penalties for failure to supply, which was a result of inclement weather conditions in my state that did not allow for the harvest to be completed, back onto the millers and onto the grower producers, the many thousands of small family-owned farms. The grower producers did not blink. They took up their share of the burden—about $66 million, I am instructed—and paid that through so that QSL could offset the penalties that it had incurred by its failure to be able to deliver on behalf of these growers and millers in the international marketplace.

So, again, just for the purposes of refreshing memory mid-speech: we have an economic interest by the grower producers; it is enshrined in their contract with their mill; it is enshrined in the contract between the mill and the marketer—in this case, QSL—and it was truly tested when the growers had to share the burden of the penalties that were incurred for the failure of supply in 2010.

For almost a year, Wilmar endeavoured to negotiate with QSL to make arrangements that allow them to do direct marketing with the growers’ interests. During that time, the matter of grower economic interest was discussed. It was on the agenda, and the parties were endeavouring to try and make a determination that would enshrine that interest in future arrangements, particularly contractual arrangements. Eventually, Wilmar took the decision to withdraw from QSL. Wilmar decided that it would take not only its economic interest in the sugar that it processed but that of the growers. There are those who are satisfied now that Wilmar is breaching all of those covenants and contractual arrangements that have existed for over 100 years.

Wilmar now refuse to even recognise the economic interest of the growers. In comments they have made, they said that this was a major decision on their part and they knew it would create community angst. They talked about the deregulated marketing system for sugar and said that they were exercising their own rights. But, in the course of this, they have declared the growers have no economic interest in their sugar. They have stated that the sugar, when delivered to their mill, belongs to Wilmar and that they will not recognise these conventions, these contractual arrangements, that have been in place now for so long.

Tonight’s speech, as much as it is about supporting my colleagues in those sugar seats, and as much as it is about supporting those grower producers—those thousands and thousands of proud small family farm operations right up and down the eastern coast of my state—is also about giving a message to Wilmar.

I believe Wilmar is a responsible, very respected corporate citizen, both in our state and, it would appear, internationally, on the matters that are before me. I am certain that we will be able, between us all, to sit down, break bread and resolve this issue.

But the message for Wilmar is very clear: there is an extremely deep political resolve, amongst federal members of the Liberal National Party who represent sugar seats and agricultural seats in my home state of Queensland, amongst at least seven members of the state parliament who also have sugar seats up and down the east coast, within QSL itself and within the peak bodies that represent these growers, and there are quite a number of them in my state—and it is consistent with statements of my state agriculture minister and encouraging statements from both the federal Minister for Agriculture and the Deputy Prime Minister, who has weighed in, in a very light way, at a very early stage—to tell Wilmar that we will continue to battle for these constituent farmers, to enshrine, in whatever form is necessary, the guarantee and security that their economic interest in the product that they produce and that, in some cases, their families have produced for generations upon generations, will remain with them. If that requires us eventually to consider forms of regulation or legislation, then that case will be taken up at a later time. In the meantime—and I know that Wilmar are watching tonight—Wilmar needs to take home the message that it will not matter how long it takes, we will continue to support these farmers and their families to ensure that their ownership rights and their economic interests in their cane remain with them in much the same way as they have for over 100 years.

Bush Matters Op-Ed – “Free market free-fall”

13 June 2014

There is a secret club that speak only in hushed tones within the hallowed walls of Federal Parliament.

Fearful of being ‘outed’ by our coalition colleagues, we have considered creating a secret handshake, a secret password and a secret code of ethics.

I am speaking about those members of the coalition that do not blindly salute the flag of the ‘free markets.’

We are certainly no strangers to this debate. The pros and cons of economic rationalism have been debated for several decades.

However, while in its ideal, it refers to the reduction of government intervention in the economy in favour of enabling ‘market forces’ to organise economic activity, the reality has seen the biggest players get bigger at the expense of the remaining supply chain.

While it may be uncomfortable territory across the political divide, it is a fundamental dispute that must be debated in the push for a strong agriculture sector that is positioned to capitalise on the burgeoning overseas opportunities.

In recent weeks, some commentators have argued that stances taken by The Nationals, especially in regards to selling state assets and collective models of ownership, is hypocritical and wrong footed.

But to suggest that ‘market forces’ should simply be allowed to dictate the trajectory of rural industry and, with it, public policy, ultimately becomes a disservice to people across the agriculture sector.

More than a decade of deregulation across several agriculture sectors has not resulted in the monetary gains at the farm gate level that were promised.

Instead, it has emboldened many multinational corporations to stifle competition and, with it, any criticisms of their unbalanced and unprecedented market power.

It has enabled large, multi-national corporate gorillas to break free of their zoo cages, tip over the pie van and climb up the flagpole.

Whether it is rural representative groups or the Australian Competition and Consumer Commission or multiple Senate Inquiries – there are many trying to clean up the aftermath from the gorilla’s ongoing rampage, but no one is ever going to convince it to get back in its cage.

Philosophically, a free market can only exist when there is freedom of choice, transparency of transaction and the existence of true forces of supply and demand.

Proponents of free market policy in agriculture simply like to go to bed and not think about what is happening so that when they wake up in the morning, it is done.

The winner is the last man standing. Disregard that there was no transparency, no choice and no freedom.

Can anyone seriously claim that Queensland dairy farmers currently enjoy an open, transparent and most importantly, free market – one indeed with freedom of choice?

Dairy farmers wanting to provide their fresh product to the general marketplace realistically only have one choice – they can supply their milk to (mostly) foreign owned processors that will most likely place the cartons on the shelves of either Coles or Woolworth.

There is no transparency, there is no freedom of choice and there is certainly no tension of market demand.

If farmers challenge or protest the price they receive, the supermarkets can always just truck milk from the southern states into Queensland.

Currently Queensland Nationals are vocally opposing Wilmar Sugar’s proposal to remove itself – and 60 per cent of Australia’s sugar – from the century-old national marketing system.

Due to deregulation, Wilmar can claim its participation with Queensland Sugar Limited (QSL) is only voluntary.

Wilmar does not need to concern itself with the impacts its decision will have on the family cane farms that do not supply its mills.

Wilmar does not need to concern itself with the long term viability of the Australian sugar industry.

Of course, business should be encouraged to make its own decisions and profit should be both the focus and the reward for sound management. Government should always work to encouraging this situation.

But when the collective fortunes of any industry are so intrinsically linked as is the case with agriculture, businesses also have an ethical responsibility to ensure viability across the supply chain.

Our rural industries are facing the challenge of maintaining competitive advantage and driving productivity gains within rapidly expanding and changing global markets and operating conditions.

Australia’s future productivity and prosperity is closely tied to our ability to maintain our position as a world leader in the management and production of our sustainable resources, especially across the agriculture and mining sector.

The dual imperative of raising productivity and workforce participation is fundamentally changing the required skills and knowledge required for the agriculture industry.

If industry is to achieve these imperatives, workers will require new skills and deeper knowledge, including higher level technical and innovation skills.

This requires money – at a time of falling profits at the farm gate.

Australian farmers are price-takers. This means their futures are often tied to the whims of the supply chain oligarchs that deregulation has spawned.

The market does not always get the balance right. Responsible policy debate should recognise this and adapt accordingly.

If that means critics will accuse me of being an agrarian socialist, then I suppose it is a flag that I will proudly salute.

Open Letter to Wilmar Sugar

13 June 2014

We, LNP Federal Members of Parliament and Senators, are writing to express concern over Wilmar’s decision to exit the current industry-owned export marketing arrangements and set up its own commercial model from 2017. We ask Wilmar to reconsider its position.

At a series of Canegrowers meetings, impacted Queensland growers have unanimously voted to oppose the move, which would take 2 million of the 3.2 million tonnes of sugar away from Queensland Sugar Limited (QSL).

The unilateral decision is anticompetitive and lacks transparency. It would see the growers, who supply Wilmar’s eight mills, stripped of their long-standing right to choose who markets their sugar.

As such, we strongly support growers’ calls for a transparent, industry-owned ‘single desk’ selling system to be maintained. Growers deserve input into how their sugar is marketed, priced and sold.

Not only will this decision be extremely detrimental to the growers who supply to Wilmar, but it will also impact canegrowers elsewhere by diminishing QSL’s place in the market.

Most growers, some of whom are not members of representative organisations like Canegrowers, are small, family owned and operated businesses. They lack the resources to challenge multinational companies.

Decisions such as this effectively squeeze our primary producers, and further reduce their viability.

Our sugar producers are already struggling under the weight of poor weather, high exchange rates and massive electricity price increases. Losing the competitive advantage provided by QSL may well be the final nail in the coffin for many growers.

The sugar industry is vital to our local communities and the Queensland economy. We urge Wilmar Sugar to reconsider its position.