The Queensland government fears any interference in commercial talks between a sugar mill Wilmar and sugar marketer QSL could derail talks already under way.
Federal cabinet is understood to be considering intervening in the dispute involving growers, Wilmar and QSL, and Pauline Hanson has threatened to boycott voting on government legislation in federal parliament until it does.
The Queensland government arranged for a mediator to get Wilmar and QSL together and they came to an in-principle agreement.
Wilmar's lawyers are due to hand over a draft on-supply agreement to QSL by close of business on Monday.
A spokesman for Queensland Agriculture Minister Bill Byrne told AAP the state government was taking a hands-off approach to what was a "commercial agreement" and cautioned any interference would delay a resolution.
Wilmar and QSL have been unable to reach a new supply agreement to determine mill access and sugar prices, leaving about 1500 farmers unable to crush their cane ahead of the 2017 season.
Senator Hanson, whose One Nation party holds four key votes in the Senate, is threatening to effectively go on strike on not vote on federal government bills over the sugar issue
"They've got their backs to the wall," she said of sugar growers.
"(Deputy Prime Minister) Barnaby Joyce promised the cane growers it will be fixed by Christmas last year and nothing has been done."
Treasurer Scott Morrison said the federal and state governments have been working with QSL and Wilmar.
But he conceded it was going to take some time.
"I don't think Australians expect their parliamentarians to go on strike. I think they expect them to turn up to work and do the job," he said.
Federal Queensland Nationals MP Keith Pitt said if One Nation goes on strike, there should be a price to pay.
"If you want to go on strike ... well I hope that's a strike without pay," he told reporters in Canberra.
Senator Hanson is pushing for a mandatory code of conduct for the industry.
Nationals senator John Williams supports her call, but doesn't think she should "blackmail" the coalition.
Labor agriculture spokesman Joel Fitzgibbon said while there may be a case for a code of conduct, federal politicians peddling "mythical, magical" interventions risked derailing the dispute.
"The worst thing that could happen now is for people to offer growers more false hope of some magical solution just to suit their own political needs," he said.
At the start of March, Mr Joyce told QSL and Wilmar they had to fix the problems if they wanted to avoid having the government's "clumsy fingers" in their business.
Crossbench senator Nick Xenophon called for a mandatory code of practice with "real teeth" to empower sugar cane growers.
"Pauline Hanson has done the right thing in relation to the sugar cane growers by standing up for changes in the law that will ensure that sugar cane growers have a semblance of bargaining power," he told reporters.
"Good on her for doing that. It means the government now has to sit up and take notice."
QSL is expected to issue a statement later on Monday.