Sugar Industry

Far from sweet for sugar sector

THE South African sugar industry was buckling under pressure, with the number of farmers continuing to show a steady decline over the past 19 years.

Industry experts said this had led to job losses,which was threatening to cripple the industry.

The South African Farmers’ Development Association (Safda) lamented the falling numbers, particularly of small-scale farmers.

“In the last two decades, there has been a rapid decline in small-scale sugarcane farmers, who numbered around 50 000 in the early 2000s, but today are sitting below 20 000,” Safda said. It attributed the decline to a number of reasons, including to a lack of access to finance and high input costs, among others.

“However, what Safda is focused on is how do we bring these farmers back into production and able to generate a sustainable income. We know from recent studies that there are thousands of hectares of land lying fallow. This means that the households and communities in these areas are financially worse off than when they were farming even small hectares of sugarcane,” Safda said.

“We must start to look at how land reform and small-scale farmers fit into the full picture of the sugar industry and, within that, how can we ensure equity in how the industry compensates these farmers.”

The association said black smallscale farmers represented about 90 percent of the sugar industry, but were only able to contribute about 10 percent of sugarcane production. Safda also was concerned about the health promotion levy (HPL), known as the sugar tax, which was having an extremely detrimental effect on its small-scale sugarcane farmers.

Safda was recognised as an official farmer representative organisation in October last year and has been at the forefront of driving transformation in the SA sugar industry since 2015. South African Sugar Association (Sasa) executive director Trix Trikam said of greatest concern in the industry currently was depressed sales in the local market as a result of the implementation of the HPL.

“Manufacturers of sugar sweetened beverages have rapidly reformulated their products to reduce sugar and dramatically increase the use of artificial and chemical sweeteners,”

Trikam said, adding that Sasa estimated that more than 200 000 tons of sugar had been displaced, and had to be sold on the export market at far below the cost of production.

“This has had a significant negative impact on the price payable for cane,” Trikam said.

South African Cane Growers’ Association chairperson Graeme Stainbank said this week that the country’s R14 billion sugar industry was in an unprecedented state of crisis, with a risk of collapse, along with the 350 000 jobs it provided and the 1 million people it supported.

Trikam said the drought had contributed to the crisis experienced by the industry: “Lower than expected rainfall in some areas during the important summer growth period may have some impact on yields, particularly in the coastal regions.”

He added that high volumes of imports distorted local prices to unsustainable levels. KwaZulu-Natal had also been trying to recover from a three-year drought that resulted in a more than R2bn loss for cane growers.

When it came to imports, Safda said it understood that deep-sea sugar imports into South Africa thus far into the 2018-2019 season stood at more than 120 000 tons. This was a cause for concern as it meant that South African sugarcane farmers would not get optimum value and South Africans could not be assured that local sugar was being used locally, it said.