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Given the small farm sizes (i.e. smaller than industry average) many of these growers rely on off farm income. This highlights the importance of sharing equipment and harvesting by grower owned cooperatives or partnerships. Cane payments: Planting Sugar Cane (source: Sunshine Sugar) The cane payment system is largely based on the traditional cane payment formula previously described. With the introduction of whole of crop harvesting the payment system changed from being based on CCS to payment on pol. Modification to the cane payment formula was mainly due to over penalising on impurities (function of CCS formula), which were much larger than in the traditional burnt cane harvesting system. Since the introduction of the new payment system the NSW Sugar industry has reverted back to burnt cane harvesting and away from whole of crop harvesting, however the revised payment system remains. During whole of crop harvesting, growers were paid $16 / tonne of fibre, measured by NIR under a separate agreement. 5.4 Ownership and Implications Farmer and miller ownership within the raw sugar value chain has many different models. At change points along the value chain (i.e. growing, harvesting, transport and milling) competition for returns occurs, which requires negotiation. The model with the least conflict is one which has the fewest changes in ownership throughout the chain. The basic competition within the value chain is the negotiation of returns to the farmer’s cane input versus millers manufacturing input (Hildebrand, 2002) Along the value chain there are other levels of competition such as farmer vs. farmer and farmer vs. harvester. To reduce competition at harvest due to periods when the sugar content is highest within the season, at a farmer vs. farmer level harvesting is scheduled / rostered so that the crop is progressively harvested in a number of rounds throughout the season providing growers with a share of the harvest period. At a farmer vs. harvester level if harvesting is contracted then contractors are paid at a negotiated unit fee which as mentioned, is usually based on an average fee across the group regardless of actual cost (i.e. cross subsidy). In some regions harvester monitoring systems have been installed on machinery to obtain a better idea of actual costs with a view of translating these costs to the grower. 5.4.1 Implications along value chain Hildebrand (2002) suggests that if all of the value chain is owned by the miller then there is least conflict and no competition until sugar is marketed. This model represents a small proportion of the industry although a significant proportion of the Brazilian sugar industry operates in this way. Conversely a value chain owned by the farmer (apart from competition between farmer vs. farmer and 137
farmer vs. harvester) is the next least likely model for competition. It was noted that the farmer owned model in practice operates where the farmer negotiates hard for the on farm inputs (i.e. farm / mill transfer stage) rather than wait for proceeds to be split after the point of sale. The farmer owned model (i.e. cooperative) occurs in NSW. Hildebrand (2002) noted a low level of farmer/mill conflict and good cooperation resulting in high harvesting efficiency (see illustrative example). 5.4.2 Ownership models within value chain The sugar industry has a number of ownership models across the sugar industry including cooperative mills, proprietary mills, public and private mills. In addition some proprietary and public mill groups own farms. Harvesting is done by contractor, harvesting cooperative, or farmer. Mixed ownership within the value chain has had variable results. It has been observed that the variability in performance across the value chain is less dependent on the ownership model and more dependent on the cooperation and commitment between each sector in sharing mill area goals. Hildebrand (2002) suggested that this cooperation and commitment is dependent on a shared goal for the mill area as the basic profit centre. 5.5 Suggested Industry and Business Structures for Mallee Within the sugar industry costs are generally averaged across participants, individuals are not always aware of their costs (Sugar Industry Oversight Group, 2006). It is argued that streamlining the value chain is essential to ensure optimal mill throughput and a reliable cane supply. Sustainability will be enhanced through the identification and targeting of real costs. Other mechanisms to ensure supply reliability include long term contracts and performance based incentives. Harvest and transport is both a significant component and cost within the cane supply system. 30% of costs in the value chain are associated with harvesting and transport of sugarcane. Within harvesting and transport there appears to be significant inefficiencies embedded within these components of the value chain. This is principally a result of divided responsibilities between the grower and the miller. The cost of harvesting is the grower’s responsibility while the cost of transport is the responsibility of the mill. Across some regions within the sugar industry a reduction in the number of harvesting operations and optimising existing groups are demonstrating some benefits. Ideally the harvest and transport system could be more easily optimised if owned by a single party managing the process from standing cane in the field to cane delivered to the mill. In practice the harvest and transport system involves multiple combinations of ownership including farmers (hundreds), contract harvesters (several to many), contract truck transport and the sugar mill. Hildebrand (2002) and others (Sugar Industry Oversight Group, 2006) identified harvest and transport as a priority for quantum gains in productivity. 5.6 Lessons for the Mallee industry from Sugar Institutional and regulatory arrangements have had a profound impact on development of the sugar supply chain. In particular, development of a cane payment formula that accounts for quality of cane delivered has been significant in improving supply chain performance. Pricing arrangements are now negotiated regionally based on an industry framework. In the mallee industry, particularly when there are multiple products and markets, appropriate payment mechanisms need to be considered. The sugar industry has a number of ownership models. Generally the greater the proportion of the supply chain owned by a single entity (eg a cooperative) the greater the efficiency and lower the 138
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Sustainable Biomass Supply Chain fo
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Foreword This report provides an as
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include business development (new p
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Acknowledgments The authors would l
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4.1 Product Options and Supply Chai
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Table 4.2 Assessment of current val
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Figure 3.4 Tracked rigid self-prope
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Executive Summary What the report i
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• Biomass production potential of
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• As the Industry expands, the mo
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Harvesting, transport and storage s
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Biomass processing, supply chain pl
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Key barriers to biomass industries
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Crop-Biomass Production Production
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Figure 1.1 The cropping and pasture
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Table 1.1 Mallee species used for p
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1.1.4 Growth Cycle Mallee System Ma
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northern New South Wales (where it
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Almost 80% of the industry now cuts
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Bark has relatively high ash but as
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Carbon sinks Planting of mallees to
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Table 1.5(a) State Land area devote
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out the fluctuations in farm income
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Mallee system Most of the mallee bi
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inconclusive result may have been d
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For a sustainable woody crop indust
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changed significantly since they we
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Figure 2.2 Biosystems Engineering p
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Whole-of-crop harvesting represents
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During the last decade the harvesti
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single row, as this would improve t
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2.2.2.2 Weight Sugar System The Aus
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Table 2.1 Harvester Comparison Tabl
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The quality of cut may be less impo
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ate than a 170 tonne/ha crop of sta
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Dry Leaf 6.1 - 3.5 17.0 58.9 53.2 T
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Bulk density will be a key consider
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Table 2.4 EM levels in cane supply
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L/T L/T 60 0.97 0.71 80 0.92 0.66 1
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Total 7.5-26 16.5 Mallee System The
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• waiting for mill delivery of em
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perhaps at 10 - 20 km intervals. Th
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transport arrangements, harvest gro
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contractors and growers, and the fa
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experience of the sugar industry wi
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Table 2.11 Alternative harvest paym
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onto the harvester. BR+F still send
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Repairs and maintenance 2.10 Capita
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Figure 2.14 and Table 2.14 describe
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Sichter et al. (2005)), harvest and
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Transport efficiencies may be possi
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3. Transport and Storage Systems Tr
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same time, the potential problems o
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Figure 3.3 Articulated self-propell
Page 109 and 110: • The harvester will not have any
Page 111 and 112: Figure 3.7 Gross mass compared with
Page 113 and 114: external factors dramatically impac
Page 115 and 116: Figure 3.11 The effect of haulout t
Page 117 and 118: 3.3 Road Transport 3.3.1 Configurat
Page 119 and 120: Figure 3.15 shows an example of the
Page 121 and 122: Road distance one way < 20 km 70 km
Page 123 and 124: Haul distance is largely outside th
Page 125 and 126: 3.6 Recommendations The nature of t
Page 127 and 128: • The strategy offered lower tota
Page 129 and 130: sugarcane billets are such that wit
Page 131 and 132: • Transfer the whole tree product
Page 133 and 134: Figure 4.5(b) Energy balance of con
Page 135 and 136: 2010). Table 4.2 presents a summary
Page 137 and 138: 4.4.2 Activated charcoal Activated
Page 139 and 140: Nett Product Value ($/t) $475.00 $
Page 141 and 142: Table 4.9 presents an estimation of
Page 143 and 144: • Oil from leaf @ $2/kg • Synth
Page 145 and 146: • The mallee oil would be extract
Page 147 and 148: 5. Industry and Business Structures
Page 149 and 150: is conducted into tariff levels on
Page 151 and 152: Bx is % brix in first expressed jui
Page 153 and 154: Hildebrand (2002) estimated that th
Page 155 and 156: also has a flow on effect to the sp
Page 157 and 158: Sugar Industry Illustrative Example
Page 159: with super size multi-lift bins ove
Page 163 and 164: 6. Supply Chain Planning and Manage
Page 165 and 166: Figure 6.1 Building blocks of the s
Page 167 and 168: weighed against the costs of operat
Page 169 and 170: • There is close contact between
Page 171 and 172: 6.4 Planning, Management Tools and
Page 173 and 174: • Harvest and transport logistics
Page 175 and 176: interface. The system allows users
Page 177 and 178: Case Study 6.2 - Model Application
Page 179 and 180: Relationships between sectors and p
Page 181 and 182: 7. Supply Chain Modelling and Econo
Page 183 and 184: It was assumed that there was a fif
Page 185 and 186: Table 7.2 Scenario two capital equi
Page 187 and 188: Table 7.4 Fuel burn rates harvester
Page 189 and 190: Figure 7.5 Effect of capital equipm
Page 191 and 192: Figure 7.7 Effect of annual tonnes
Page 193 and 194: 30 1.8 7.0 12.3 17.5 50 1.1 4.3 7.6
Page 195 and 196: 8. Conclusions and Recommendations
Page 197 and 198: Biomass bulk density has a large im
Page 199 and 200: Vehicles used for infield haulout w
Page 201 and 202: This can be compared with harvest a
Page 203 and 204: While diversification can add value
Page 205 and 206: Appendix 1: Comparative Assessment
Page 207 and 208: and transport conditions. Billet le
Page 209 and 210: that cane production is the most pr
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on sugar only, other proceeds (mola
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References Agnew, J 2002. A Partici
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Enecon 2001. Integrated Tree Proces
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Keating, BA, Antony, G, Brennan, LE
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Ridge, DR and Linedale, AL, 1997. T
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Willcox, T, Hussey, B, Chapple, D a
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