Topics:  bjelke peteresen, cabinet documents, history, sugar industry

Sugar's sorry plight revealed in 1982 Cabinet documents

HARD TIMES: The Proserpine Mill was reaching crisis point in December, 1982.
HARD TIMES: The Proserpine Mill was reaching crisis point in December, 1982.

SIX sugar mills on the brink of collapse following plummeting sugar prices and skyrocketing operating costs had to be urgently bailed out by the State Government two decades ago.

The year was 1982 and sugar was down to an all-time low in Queensland of $205 a tonne.

Cabinet minutes under the Joh Bjelke-Petersen government, released on January 1, revealed the desperate approach six sugar mills, including three in Mackay, made to save themselves.

Cabinet minutes revealed the average return for Australian sugar on domestic and overseas markets for the 1982 season was only $205 a tonne compared with $372.44 a tonne two years prior.

Along with the low domestic sugar price, the industry was also in the grips of a worldwide sugar over-supply.

Cabinet minutes revealed the average return for Australian sugar on domestic and overseas markets for the 1982 season was only $205 a tonne compared with $372.44 a tonne two years prior.

Return arrangements between the miller and the grower, in which the pay ratio was one-third to two-thirds to the grower, also played a part in millers' revenue being unable to cover even basic operating costs.

The Co-Operative Sugar Millers' Association advised the government in December 1982 the financial situations of Tully, Babinda, South Johnstone, Proserpine, Marian and Cattle Creek mills would soon reach crisis points and emergency funds were needed to enable the mills' survival.

The co-op told the government it saw no recovery in prices before mid-1984.

The State Government reasoned it was clear that without immediate assistance, the short-term options of the sugar mills would be in jeopardy.

The mills were collectively handed a $10 million loan with a 14.8% interest scheduled to kick in in 1984.

But the Primary Industries Minister and Deputy Premier warned the loan was on the condition the mills took urgent action to remedy its "unsatisfactory financial situation".

Appearing to be in the most dire straits, the South Johnstone mill, near Innisfail, was loaned $2.594 million and the Proserpine mill received $2.388 million.

Marian mill received $2.191 million and Cattle Creek, west of Mackay, $788,000. The Primary Industries Department was working with the co-op at the time to alter the miller-to-grower pay arrangements to avoid liquidity difficulties. Cabinet also agreed to the department urgently preparing a positions report on the co-operative mills' operations.



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