ORGANIC SUGAR PRODUCTION IN AUSTRALIA

1. �ORGANIC� SUGAR PRODUCTION IN AUSTRALIA

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

3. The Australian sugar industry

4. Sugar production system in Australia

5. The conventional supply chain

6. 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

7. 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)

8. The organic value chain

9. 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!)

10. 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)

11. 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)

12. 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

13. 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

14. 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