Sugar in Australia: A Food System Approach
The George Institute for Global Health commissioned a report called Sugar in Australia: A Food System Approach- competing issues, diverse voices, and rethinking pathways to a sustainable transition in an effort to better understand the broader context of excess added sugar consumption in Australia. The report was written by nutritionist and food policy expert, Vanessa Clarkson. The report lays out the inherent shortfalls for health and the environment when a food system is based on profits and growth over people and planet and suggests policy changes alone are not enough to overcome them. The report concludes that deep, radical and holistic changes are required to transition toward a new food regime. This article summarises the report.
The global sugar market
The global sugar market is one of the most volatile of all primary commodity markets, characterised by short sharp peaks of high prices, which are then corrected by increased production and protective policies that result in prolonged price troughs. When consumption again exceeds production another price peak occurs. The Australian sugar industry is notably exposed to low prices because it exports most of its production and the government does not prop up the price with taxpayer funds, such as occurs in the USA and Japan. The World Bank recognises sugar as being one of the most policy distorted commodities of all and reform to remove protectionist policies in export markets would be of significant benefit to the Australian sugar industry.
Postscript: on 19th March the combination of COVID-19, falling oil prices (which means less sugar is sold for biofuel) and the collapse of the Brazilian currency led to a 15% drop in global sugar prices, impacting Australian growers and millers.
The Australian sugar industry
Most sugarcane is grown in Queensland (90%) with the rest in northern NSW. Sugarcane farms are largely family owned and operated, although the number of farms are becoming fewer and larger due to the acquisition of smaller farms to form larger farms with aim of achieving economies of scale. Sugar is Australia’s number one agricultural crop by volume and the 18th most valuable agricultural product, generating $1.1 billion in revenue each year. Globally, Australia is ranked 10th in terms of production volumes and contributes only 3% to global supply, which is dominated by a few major players, namely India and Brazil.
However, Australia is the third largest exporter of sugar, exporting the majority to Asia. The NSW industry alone generally supplies the Australian domestic market.
While the Australian sugar industry does not benefit from government protectionism, it does receive government assistance in the form of research and development funding – $92.9 million between 1997 and 2015- and various other support along the value chain including tax concessions.
Sugar is mostly utilised in industrially produced foods consumers recognise as high in sugar such as sugary drinks, sweet biscuits, cakes, muffins and confectionery. These products are often heavily marketed by transnational food corporations, part of a $104.2 billion processed food and drink industry.
Manufactured food and drink production constitutes the largest portion of the total food and grocery industry in Australia and turns over around $104 billion a year and employs 200 000 people - it represents a core part of the Australian economy. Most food and drinks consumed in Australia are also manufactured in Australia, and exported to key markets such as USA, China and Japan.
Sugarcane is not only grown for human food and drinks but also for a range of products including animal feed, industrial alcohol, biofuel, fertiliser and a variety of fibrous products such as building materials and paper.
The sugar market is global. Reductions in Australia’s sugar production will only increase sales from other countries with lower environmental standards.
Sugar intakes in Australia
Average intakes of added sugar are above WHO (World Health Organisation) recommended levels at 52g a day (around 13 teaspoons), with higher intakes in teenage boys (80g/d) and Aboriginal and Torres Strait Islander people (68g/d).
Sugar consumption at a population level has decreased since 1995. The WHO recommendation to limit free sugars to 10% or less of daily energy was exceeded by 54% of the population in 1995 but exceeded by 46% in 2011-12. Added sugars consumption has dropped from 10.7% of energy to 9.5% of energy (12g less per day), and free sugars has dropped from 12.5% to 10.9% energy (15g less per day). Nearly all this reduction can be attributed to children consuming fewer sugary drinks. The Australian Bureau of Agriculture and Resources Economics and Sciences (ABARES) predicts that by the period 2022-23, consumption at a population level will be 15% lower than the period 2017-18.
Despite consumption decreasing, demand for sugar in Australia has been sustained due to population growth. Internationally, population growth, income growth and ‘westernisation’ of diets have maintained export demand.
There has been considerable growth in sugar alternatives, or non-nutritive sweeteners. A survey of the Australian FoodSwitch database found sugar alternatives had become more pervasive than sugar, appearing in 69 percent of products compared to 61 percent of products containing sugar. Future growth of sugar alternatives is uncertain as consumer perception is mixed, with a significant proportion believing the alternatives are no better than sugar.
The health impact of sugar
The report takes the view that sugar has become a health issue because the way it is now consumed is mismatched to the body’s capacity to manage it. Sugar now contributes to excess consumption of energy and this then contributes to the development of weight-related conditions including cardiovascular disease and type 2 diabetes. High intakes of sugar (above 20-25% energy) can also have an adverse impact on dietary quality and nutrient intakes. Taking a broader view, foods and drinks high in sugar can have a detrimental effect on the overall diet because they are mostly highly-processed foods that may have adverse effects not yet fully understood, such as glycemic or microbiotic effects, presence of hazardous compounds or effects on appetite.
Perhaps the most well-known health issue in Australia is overweight and obesity. While it is difficult to attribute disease burden to specific foods, nutrients or ingredients, this has been estimated for sugary drinks and found to be associated with 0.3% of the overall disease burden in 2011.
The effect of sugar consumption on dental health is well established. Greater intake of sugars is associated with greater risk of tooth decay in children, particularly when consumed frequently through the day. In 2011, dental caries accounted for 1.6% of total years lived with ill health or disability (YLD).
The environmental impact
The Australian sugar industry has taken steps to reduce its environmental impact, however it is a significant user of natural resources such as water- sugarcane uses more water than any other crop. There are ongoing concerns about the use of agrichemicals that pollute water that runs into the Great Barrier Reef. Sugarcane constitutes half the inorganic nitrogen (from fertiliser) entering the Great Barrier Reef and this promotes the problematic crown-of-thorns starfish that eat the coral.
Significant public funds are provided to support the sugar industry, including research and development grants to help farmers adopt more environmentally sustainable practices.
The challenge of change
Modelling that quantifies the effects of achieving the WHO recommendation of no more than 10% energy from free sugars and slowing demand growth for sugar, found Australia would lose export market share.
The report says market intervention is required to create change in a system that maximises profit, but the Australian government’s neoliberal approach is to keep the government’s role minimal in regulating the economy. In the current food system, the beneficial impact of any regulation would be outweighed by costs to business and won’t deliver proportionate change.
A sugar tax is an attempt to reduce sales, reduce consumption and improve public health. However, the report suggests it will have limited impact when the food system of which it is a part will simply flex to maintain equilibrium.
The report concludes a narrow policy focus on sugar may have unintended consequences on human and planetary health. For example, sugar reduction programs may simply create products lower in sugar that are no healthier (eg confectionary containing sugar alternatives and refined carbohydrates with no kilojoule saving).
Reframing sugar as a systemic issue
The report is critical of the status quo. It says when the food system requires short-term profits, increasing market share and competing in a global marketplace, society bears the brunt both in health and environmental impact. The costs associated with the current food system are not sustainable for people or the planet, and this is exemplified by the sugar system. A reductionist approach of the past is no longer relevant. Rather than blaming individual foods, ingredients or industries, we must seek food system transition to bring forth health and sustainability outcomes.
Deep, radical and holistic changes are required, and these must tackle the food system at its core.
You can read the full report here
Postscript: the COVID-19 shock
The report describes significant changes to our food regime that have occurred as a result of major shocks, such as the Great Depression, the World Wars and the world food crisis of the 1970s. It also questions whether smaller, incremental changes can deliver the changes required to rebuild our food system on a foundation of socio-ecological justice. It begs the question: will COVID-19 be the major shock required to create a new future food regime?
Postscript: roundtable consensus report
The George Institute for Global Health convened a round table after the presentation of this paper at an event held in February at their headquarters in Sydney. They have published a Consensus report of the discussions that occurred: Sweet Transition – priorities for collaborating to transform the food system in Australia. No sugar or food industry representatives were invited.