Sugar sector is on track with 5-year transformation plan

THE SUGAR sector is on track with its five-year transformation plan, with the government having spent hundreds of millions of rands to remedy the inequalities experienced by black sugar-cane farmers.

Trade, Industry and Competition Deputy Minister Nomalungelo Gina this week hailed the work done in the sugar industry.

Since the implementation of the Sugar Value Chain Master Plan last year, there has been a rise in local production and a decline in imported sugar, creating stability for an industry that employs about 85 000 people.

According to a recent article published in the South African Sugar Journal, Trade, Industry and Competition Minister Ebrahim Patel said that a progress report on the implementation of the master plan had indicated a 15 percent growth in domestic sugar sales. The industry experienced an increase in the purchase of sugar by the retail and industrial sectors, which included soft-drink manufacturers.

“In this Phase 1 of the master plan, industrial users and retailers of sugar have committed to minimum levels of South African grown and produced sugar, equal to no less than 80 percent of need during the first year, and increasing to 95 percent by the third year. To support this undertaking, sugar producers have equally committed to price restraint during this period,” Gina told a meeting of Parliament’s portfolio committee on trade, industry and competition this week.

“Over the three-year Phase 1 period, the sugar industry will commence with a stabilisation and restructuring plan that will include, among other things, development of diversified revenue sources for the industry, small-scale grower retention, support and transformation,” Gina said.

South African Sugar Association (Sasa) executive director Trix Trikam confirmed that the industry had spent R400 million as part of its five-year transformation plan, whose implementation started in the 2019/20 season.

“Having spent R400m in two seasons demonstrates that the industry is well on track with regards to the five-year transformation plan. These interventions go a long way in ameliorating the plight of small-scale growers, who have had to face several serious challenges, including sugar imports, insufficient tariff and the so-called sugar tax,” said Trikam.

Sasa said the implementation of the five-year transformation plan was preceded by R172m in “immediate transformation interventions”.

Trikam said the industry had spent R572m in total on transformation since September 2018.

In addition, payments from the Supplementary Payment Fund to small-scale black growers for the past three seasons had amounted to more than R143m.

To ensure the success of the transformation plan, a designated committee had been created, which decided how the funds should be optimally utilised. The committee was composed of Sasa and its members, the SA Canegrowers Association, the South African Farmers Development Association and the Sugar Millers’ Association.

This week, the SA Canegrowers Association announced a new partnership with Proudly South African to encourage consumers to buy local sugar.

The partnership promised to provide fresh impetus to SA Canegrowers’ “Home Sweet Home” campaign, which started in December last year. The campaign aimed to educate and encourage consumers to support the South African sugar industry by buying locally produced sugar.

Over the past decade, the sugar industry has faced critical challenges, including droughts and increasing production costs. One of the biggest threats has been the weak protection against the increasing importation of cheap sugar from countries such as Brazil and from the Southern African Customs Union. These cheap imports cost the local industry more than R2.2 billion in 2019 alone.