Sugar cane growers have backed moves by a Chinese company to revive the industry in WA under a lease agreement with the State Government which will give it control of 15,000ha of prized Ord River farmland.
It is understood Shanghai Zhongfu will pay just peppercorn rent to the Government under its plans to invest more than $500 million in developing the land and infrastructure. The company would build a sugar mill near Kununurra and export through Wyndham after a substantial upgrade of the port.
Australian Cane Farmers Association general manager Stephen Ryan said the terms of the proposed deal, flagged yesterday by _WestBusiness _, would give the company every chance of success given it did not have to pay a commercial rate for the land.
"We have no issue with foreign investment, we are just dismayed that there is not more Aussie investment. The important thing is to develop the industry," Mr Ryan said. "Most of our milling capacity on the east coast is already owned by Singaporean and Thai interests. The Asian region is crying out for sugar and we are just the place to produce it."
Ord sugar cane growers recorded some of the highest yields in Australia for 10 years up until 2007.
The industry folded in 2007 after plans to expand the irrigation scheme stalled, world sugar prices fell and local growers moved into other crops. The Ord Sugar Mill, established by CSR and then owned by Korean company Cheiljedang Corporation, closed and local farmers were forced to form Ord River Cane Growers Pty Ltd to process their final crops.
ORCG chairman Paul Mock said sugar cane was an ideal crop for the Ord and world sugar prices had improved significantly since the industry folded in 2007.
Mr Mock, who now grows sandalwood at the Ord, said there was potential for farmers to move back to sugar cane to help supply a Chinese-built mill, which industry sources estimate would need to process at least two million tonnes a year to remain viable.
"If the price is right, you will see farmers go back to it," he said.
Ord expansion project director Peter Stubbs, who refused to confirm the Shanghai Zhongfu deal, said the official announcement of the preferred proponent on Tuesday was by no means the final step in the process.
"At that point we won't have final investment decisions or a final contract," Mr Stubbs said.
"The process that we use is also heavily influenced by the native title agreement and it requires that the preferred proponent then has commercial negotiations with the traditional owners on benefit packages."
Mr Stubbs said key factors in the decision-making process were employment opportunities, particularly for Aboriginal people, the huge untapped agricultural potential and the best long-term benefit for the east Kimberley economy.
Traditional owners the Miriuwung Gajerrong settled a native title agreement with the Government in 2005 that cleared the way to expand the irrigation scheme.
The agreement set up a process for the Miriuwung Gajerrong to negotiate with big investors on employment and business opportunities.
About 100 Aboriginals have been employed on infrastructure construction this year and eight indigenous businesses have been engaged in the government-funded development project.
We are just dismayed that there is not more Aussie investment.
Australian Cane Farmers Association general manager Stephen Ryan