David Leyonhjelm says government should steer clear of sugar industry regulation

The sugar industry was notorious for attaching itself to the public teat, said David Leyonhjelm, who has worked in agribusiness for over three decades. 

His commentary came as a controversy erupted over the decision by the sugar processing company Wilmar to sell all its sugar direct to international customers rather than via the grower-owned marketing organisation, Queensland Sugar Limited (QSL), beginning in 2017.

It has prompted another processor, Thai-owned MSF Sugar, to suggest it may follow suit.

"True to form, there are numerous calls for regulators and governments to intervene," David Leyonhjelm wrote in an editorial piece on The Land.

"A horde of politicians, including the Queensland Minister for Agriculture, is taking a close interest."

Wilmar is a Singapore-based agribusiness firm now among the top ten global raw sugar producers as well as the largest raw sugar producer and refiner.

"Fear of foreigners, particularly big multinationals, is never far from the surface in rural Australia.

"In conjunction with the ever present assumption that everyone is out to rip farmers off, it is a formula for conspiracy theories and high anxiety.

"Such concerns are being stoked by QSL, which is probably fighting for its very existence, with its arguments stoking lingering agrarian socialist sentiments surrounding the fate of profits.

"In the end, this is a matter for the market to sort out.

"If Wilmar turns out to offer inferior service or prices to QSL, the market will deal with it by attracting new competitors.

"If growers think they need greater control over their marketing, they will either compel Wilmar to cooperate or find a way to avoid using it.

"If it turns out Wilmar is pointing the way of the future, QSL will be gone within five years and the industry will have finally restructured.

"Whatever the outcome, governments and regulators need to keep their noses out of it," he said.