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SUSTAINABLE SUSTAINABLE Click to edit Master title style ECOSYSTEMS ECOSYSTEMS

CSIRO CSIRO

ORGANIC SUGAR PRODUCTION IN AUSTRALIA


G Antony, DM Smith, J Biggs, S Park, M Renouf and T Webster

CSIRO SUSTAINABLE ECOSYSTEMS

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

CSIRO SUSTAINABLE ECOSYSTEMS

The Australian sugar industry

2100 km 500 000 ha cane land 5 Mt sugar EUR 1000 million value

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Sugar production system in Australia

Sugar marketing

Cane growing
Cane harvesting
Material flow Financial flow Environmental impact

Cane milling

Cane transport

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The conventional supply chain


Farming
cane

raw materials financial flows


products

Harvesting/haulage Cane transport Mill processing


raw sugar by-products

Lack of integration along supply chain Rigid segmentation in supply chain by financial interest and other objectives

Sugar transport Marketing Domestic refining

Bulk handling
Food manufacturing Shipping - export

No concept of a customeroriented value chain pulling together and acting as a single profit centre

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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
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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)
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The organic value chain


Farming
cane

raw materials financial flows


products

Harvesting/haulage Cane transport Mill processing


raw sugar

A pure farmer initiative

by-products

The conventional sugar industry is not interested Organic farmers are forced to manage the supply chain
Necessity of a customeroriented value chain that acts as a single profit centre

Sugar transport Marketing Domestic refining

Domestic retail

Food manufacturing

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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!)
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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)

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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)
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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

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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
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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
CSIRO SUSTAINABLE ECOSYSTEMS

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