THE Sugar Marketing Taskforce's draft code of conduct has been welcomed by Canegrowers and canned by Wilmar Sugar, owner of the Proserpine Mill.

A draft version of the code of conduct was released to industry groups for comment last week.

Canegrowers Proserpine chairman Glenn Clarke said as well as defining Grower Economic Interest and Mill Economic Interest in the sugar produced by mills, the draft code of conduct provided a mediation clause to assist in industry disputes.

With the stoush between growers and millers dragging on for over 12 months now, Mr Clarke hopes the draft code of conduct will bring the issue to a head.

"Really, if we're pretty serious about it, we've had 12 months and I think we should be coming to some sort of agreement in a reasonably short timeframe and not drag on for another year," he said.

"The whole (code of conduct) doesn't stop us from coming to a commercial arrangement. It does kick in if all else fails and we can't come to a resolution."

Wilmar Sugar's executive general manager strategy and business development Shayne Rutherford said the draft code was likely to breach trade obligations, damage investor confidence in Australia's sugar industry and place further financial pressures on Canegrowers and millers.

"Wilmar has provided the taskforce with independent legal advice stating that the expropriation of milled sugar would likely contravene both Australia's free trade obligations and Section 51(xxxi) of the Australian Constitution and potentially expose the Commonwealth to compensation claims," he said.

"The proposal from the Taskforce is about changing sugar ownership and not about what's best for Australian sugar sales and farm incomes."