1. Click to edit Master title style CSIROSUSTAINABLE ECOSYSTEMS CSIRO SUSTAINABLE ECOSYSTEMS SUSTAINABILITY AND ORGANIC SUGAR PRODUCTION IN AUSTRALIA G Antony, DM Smith, J Biggs, S Park, M Renouf and T Webster

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

3. CSIROSUSTAINABLE ECOSYSTEMS The conventional supply chain Farming raw materials financial flows products Harvesting/haulage Cane transport Mill processing Sugar transport Marketing Bulk handling raw sugar by-products Shipping - export Domestic refining Food manufacturing cane Rigid segmentation in supply chain by financial interest and other objectives Lack of integration along supply chain No concept of a customer- oriented value chain pulling together and acting as a single profit centre

4. CSIROSUSTAINABLE ECOSYSTEMS 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

5. CSIROSUSTAINABLE ECOSYSTEMS An industry in crisis – internal factors Ossified institutions - socialist traditions 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) - regular criticism of environmental impact

6. CSIROSUSTAINABLE ECOSYSTEMS Seeking solutions – organic production Textbook case of induced innovation - to ensure long-term sustainability - promise of better financial returns A grass-roots initiative - despite general industry indifference and derision - no external support - no proven technologies to use

7. CSIROSUSTAINABLE ECOSYSTEMS The organic value chain Farming raw materials financial flows products Harvesting/haulage Cane transport Mill processing Sugar transport Marketing Domestic retail raw sugar by-products Domestic refining Food manufacturing cane A farmer initiative The conventional industry was not interested Farmers were forced to manage the supply chain Necessity of a customer- oriented value chain

8. CSIROSUSTAINABLE ECOSYSTEMS Challenges The expected - the highest-yielding cropping system adapted to organic production in a developed country - innovative farming systems, based on agricultural research from first principles - acceptable organic techniques for nutrient supply and pest/disease control The unexpected - managing the whole supply chain, including milling and marketing - relations with the mills were difficult - regional approaches to marketing related to social differences

9. CSIROSUSTAINABLE ECOSYSTEMS Outcomes: financial sustainability Better returns not without costs - marketing effort needed for price premium - expensive organic conversion - expensive experimentation - increased risk of pests/diseases due to less control

10. CSIROSUSTAINABLE ECOSYSTEMS Outcomes: ecosystem impacts On farm - method: cropping-system simulation - improved resource sustainability through build-up of soil organic matter - anecdotal evidence of improved soil biological activity Off farm - method: Life-Cycle Assessment - increased mechanical weed control causes higher CO 2 and particulate emissions - better N retention reduces nitrous emissions - no data on leaching, expect reduced losses

11. CSIROSUSTAINABLE ECOSYSTEMS Conclusions Organic cane - a promising innovation - made possible by motivated, entrepreneurial and polymath farmers - improved sustainability of farm finances and resource base Not quite as expected - off-farm environmental impact not all positive R.I.P. - supply-chain problems outside the farmers control led to failure

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13. CSIROSUSTAINABLE ECOSYSTEMS The Australian sugar industry 2100 km 500 000 ha cane land 5 Mt sugar EUR 1000 million value

14. CSIROSUSTAINABLE ECOSYSTEMS Sugar production system in Australia Sugar marketing Environmental impact Cane harvesting Cane milling Cane transport Material flow Financial flow Cane growing Sugar marketing