Paul Schembri, chairman of Canegrowers Queensland, has returned from London meetings of the Global Sugar Alliance.
Paul Schembri, chairman of Canegrowers Queensland, has returned from London meetings of the Global Sugar Alliance. Emma Murray

Mackay canegrowers push for India to back off

CANE growers have been hit by fire, but a global glut is also forcing the world sugar price below the cost of production.

Mackay-based sugar industry advocate Paul Schembri returned from London on Monday where he was part of a push to escalate World Trade Organisation action against India for its allegedly illegal subsidies to sugar growers.

Mr Schembri has worked on cane farms for 40 years and is chairman of Queensland Canegrowers.

He says he isn't against national governments supporting their growers, but a dangerous precedent will be set if India is allowed to break a WTO rule limiting subsidies.

The rule states that subsidies should not cause more than a 10 per cent growth in production, but Mr Schembri says there is evidence of an 80-90 per cent growth in Indian production.

"It's only in the last two or three years that the quantum of subsidies paid by India has increased very rapidly and substantially," he said.

Meeting in London last week, the Global Sugar Alliance called on its nine member governments - including Australia, Canada, Guatemala and Brazil to take formal action in the World Trade Organisation to initiate formal actions against Indian sugar subsidies.

It follows the Australian Government's counter - notification of India's illegal sugar subsidies lodged in the WTO last month, which was supported by 13 WTO members.

Global Sugar Alliance member and UNICA executive director Eduardo Leão de Sousa said Australia's recent actions were important but "not sufficient".

"Today we call on our governments to take the next important step and initiate a formal WTO dispute settlement process with India," he said.

"This action will help those in India calling for reform."

Canegrowers Mackay Chairman Kevin Borg said the campaign to establish an equal playing field in the global sugar market was important for local growers.

"For a period leading up to this we've been through a series of prices well below the cost of production," he said.

"The Indian subsidies and their dumping of sugar onto the market ...hasn't been the sole reason behind the prices but it's been a part of it.

"There's an oversupply of sugar, so anything that's added to that impacts price...we need to get something done about it."

Queensland Canegrowers chairman Mr Schembri said he was confident of a positive result, as the last time Australia tried to bring WTO action to stop domestic subisidies, in 2004, three countries "took on the might of the European Union and we won".

"They were dumping highly subsidised surplus sugar onto the world market, and as much as six million tonnes of sugar was taken off the world market - which immediately had an impact on the world price."