australia sugar

‘ORGANIC’ SUGAR PRODUCTION IN AUSTRALIA : ‘ORGANIC’ SUGAR PRODUCTION IN AUSTRALIA G Antony, DM Smith, J Biggs, S Park, M Renouf and T Webster


Outline : Outline Sugar-industry situation Organic sugarcane growing in Australian industry reform Challenges and solutions in organic canegrowing Sustainability implications of organic canegrowing


The Australian sugar industry : The Australian sugar industry


Sugar production system in Australia : Sugar production system in Australia Sugar marketing Environmental impact Cane harvesting Cane milling Cane transport Material flow Financial flow Cane growing Sugar marketing


The conventional supply chain : The conventional supply chain Lack of integration along supply chain


An industry in crisis – external factors : An industry in crisis – external factors The most corrupted international commodity - protectionist US farm policy restricts market access - protectionism and predatory dumping by the EU reduces international price Increasing competition - revolutionary changes in Brazil in the 1990s result in increased production and exports Domestic squeeze - pressure over environmental performance by society - declining government sympathy for an industry accustomed to regular financial assistance


An industry in crisis – internal factors : An industry in crisis – internal factors Ossified institutions - ‘socialist’ practices pre-dating the Soviet Union: full regulation of production/prices at every stage of the supply chain plus government subsidies - passive, conformist industry culture in lieu of innovativeness all along the supply chain Unsustainable practices - cane monoculture farming practice results in yield decline - financial losses since the late 1990s (bad weather, but also loss of international competitiveness)


The organic value chain : The organic value chain Farming raw materials financial flows products Harvesting/haulage Cane transport Mill processing Sugar transport Marketing Domestic retail raw sugar by-products Domestic refining Food manufacturing cane A pure farmer initiative The conventional sugar industry is not interested Organic farmers are forced to manage the supply chain


Seeking solutions – organic production : Seeking solutions – organic production Textbook case of induced innovation (Hayami and Ruttan) - to ensure long-term sustainability of farm resources (to avoid declining factor productivity: land resource more highly valued than by conventional cane farms) - expectations of better financial returns A grass-roots initiative - despite general industry indifference and derision - no external support by government or industry - no proven technologies to use (most intensive tropical field-crop enterprise without agrochemicals!)


Innovations in organic production : Innovations in organic production Revolutionary farming systems - agricultural research from first principles (farmer experimentation in situ like the olden days) - the highest-yielding cropping system adapted to organic production in a developed country (90-150 t/ha of cane yield every year) - yield dip during organic conversion (>3 years, using certified organic techniques but crop is not yet sold as organic: a gap between costs and income)


Challenges and solutions : Challenges and solutions The expected - must create new farming system that is suitable for organic certification - new techniques needed for nutrient supply and pest/disease control without agrochemicals The unexpected - having to manage the whole supply chain, including cane processing and sugar marketing - relations with the sugar mills a source of conflict - regional approaches to marketing relate to social differences between the two case-study regions (age, background, farm size, entrepreneurial spirit)


Outcomes: financial sustainability : Outcomes: financial sustainability Better returns not without costs - large marketing effort needed to realize price premium - expensive organic conversion (income gap) - expensive experimentation (failed experiments mean lost cane yield and lost income, but costs still incurred) - increased risk of pests/diseases due to less ability to control them - no outside help to provide financial subsidy or insurance: farmers must pay their own way


Outcomes: ecosystem impacts : Outcomes: ecosystem impacts On farm - analytical method: cropping-system simulation - improved resource sustainability through the build-up of soil organic matter from organic fertilizers - anecdotal evidence of improved soil biological activity (an essential source of positive production feedback) Off farm - analytical method: Life-Cycle Assessment - increased mechanical weed control causes higher CO2 and particulate emissions - better N retention reduces nitrous emissions to air - no data on leaching, but expect reduced water pollution


Conclusions : Conclusions Organic cane - a promising innovation - made possible by motivated, entrepreneurial and polymath farmers - improved sustainability of farm finances and resource base in the long run, at a short-term cost Not quite as expected - off-farm environmental impacts not all positive Further work needed - research of water-borne pollution effects - improvements to farmers’ marketing skills