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• Ensuring that no party has excess power over the others.
• Minimising of adversarial relations between parties.
• Ensuring that season length has a minimal impact on all stakeholders.
• Maximising the economic return to the whole industry through optimum yield of sugar and
other products sold.
The best way for the whole supply chain to maximise its net revenues from the three inter-linked
business groups is to create strong direct commercial links between the three, using whole-of-chain
incentives based on available sugar in the field and the payment for sugar and other products at the
market. If these net incentives were in place, operational decisions made by farmers, harvesters and
millers would be likely to be focused on a common goal of maximising returns. This goal should
become part of an agreed harvest plan that maximises net incentives and therefore maximises net
revenues across the whole supply chain. The allocation of shared returns must be equitable to millers,
farmers and harvesters and reflect the costs incurred and risks taken by each party in contributing to
the whole-of-chain result.
An analysis of alternative harvest payment systems is summarised in Table 2.11. It should be noted
that several of the options do not offer sufficient commercial incentives to the parties to improve
sugar recovery but focus instead on mechanisms to allocate current revenue rather than on first
increasing the amount of revenue available across the supply chain.
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