SCOPE FOR COST SAVINGS FROM HARVESTING RATIONALISATION IN THE AUSTRALIAN SUGAR INDUSTRY By

Overcapacity in the harvesting sector of the Australian sugar industry has been a known problem for some time. However, its cost implications became critical only recently, following the dramatic improvement in the Brazilian industry’s competitive position over Australia. The present study is part of broader investigations of supply-chain improvements in the Mourilyan, Mossman and Plane Creek mill regions, financed by SRDC and the CRC for Sustainable Sugar Production. Current set-up of harvesting groups and capacities is compared to alternative scenarios. Analysis is carried out using a version of the BSES Harvest Transport Model that has been extended by CSIRO Sustainable Ecosystems to simultaneously assess all paddocks in a mill region and calculate the financial outcomes of scenarios. Implications for changes in profitability are shown for individual harvesting groups and for the milling and growing sectors at the regional levels. Best-practice harvesting on its own benefits growers and the mill through reduced cane losses, but imposes extra costs on harvesters under the current payment system. Reducing the number of harvesting groups improves the profitability up to a point for those still in business through better assets utilisation. However, such financial incentives proved insufficient in the past to bring about change. The paper contains a review of non-financial factors bearing on decisions about harvesting, and an assessment of their relative influence in the current industry situation