JOHANNESBURG – Agricultural group South African Canegrowers on Tuesday welcomed the signing of a landmark sugar industry masterplan which aims to ensure the long-term sustainability and profitability of the sector over the next three years.
The agreement signed by the government, sugar industry stakeholders, retailers and other social partners on Monday will also protect the one million livelihoods the industry supports, SA Canegrowers said in a statement.
The industry has been under threat in recent years due to cheap imports, unprecedented droughts, falling world prices and a major drop in local demand after the government introduced a sugar tax to promote healthier diets.
“We welcome one of the main strategic objectives of the masterplan, which is ensuring that the foundational role of small-scale growers in the sugarcane value chain is safeguarded and expanded,” SA Canegrowers said.
“South African sugarcane growers will be contributing R640 million (US$41.6 million) over the next five years towards programmes to support small-scale grower development and greater transformation within the industry.”
The association also applauded the commitment in the plan towards re-establishing the local sugar market over the next three years, saying cheap imports had cost domestic producers over R2.2 billion in 2019/2020, with a record level of cheap sugar expected to pour into South Africa during the current financial year.
“Deliberate measures that restore demand to South African sugar are essential for the future of our local industry,” it said.
The masterplan aims to restore an initial 150,000 tons of sugar demand to the local sugar industry in the first two years, increasing this to 300,000 tons in year three.
Retailers and wholesalers have committed to procuring 80 percent of their sugar locally, rising to 95 percent in the third year.
The government will promote the use of local sugar in all its departments and state-owned entities, while the industry will actively promote local sugar to consumers and ensure there is visible labelling on packaging, indicating that it is produced in South Africa.
The masterplan also envisages the establishment of a task team to investigate the socio-economic impact of the sugar tax to date, a move the producers association said would enable government to make informed decisions in the future, taking into account the impact the tax has had on rural livelihoods.
“We calculate that the tax has cost the sugar industry R1.5 billion and caused 9,000 job losses in the cane growing sector alone,” it said.
“We are pleased that our concerns have been taken on board and that there is now a clear plan to put the sugar industry back on track.”
African News Agency