SA Cangegrowers calls on government to honour Sugar Masterplan commitments

19th May 2022 By: Tasneem Bulbulia - Senior Contributing Editor Online

When Minister Ebrahim Patel delivers the budget for the Department of Trade, Industry and Competition (DTIC) on May 20, industry organisation SA Canegrowers says it hopes he will use it as an opportunity to provide an update on government’s action to implement its commitments under the Sugarcane Value Chain Masterplan.

This plan was developed to address a number of serious challenges facing the industry and to ensure its long-term sustainability and profitability.

The first three-year phase of the masterplan was signed by Patel, Agriculture, Land Reform and Rural Development Minister Thoko Didiza, sugar industry stakeholders, retailers and social partners in November 2020, which means the budget will be delivered at the half-way mark of the plan’s implementation, SA Canegrowers CEO Thomas Funke points out.

The signatories to the plan committed to taking action to increase demand for locally grown and manufactured sugar; ensure industry price restraint; improve import protection; strengthen small-scale growers support; increase transformation in the industry; create a diversified sugarcane-based industry; and potentially restructure the industry.

As part of the commitment to increasing demand for locally produced sugar, a number of stakeholders agreed to varying offtake levels.

Under this commitment, government undertook to promote the use of locally produced sugar by all government departments and State-owned entities.

The DTIC also undertook to investigate appropriate ways of designating sugar and sugar-containing products under the Preferential Procurement Policy Framework Act, Funke outlines.

He says the organisation is, therefore, calling on Patel to provide an update on progress made on both these commitments.

“In fulfilment of its commitment to encourage consumers to purchase locally produced sugar, SA Canegrowers launched its Home Sweet Home campaign in December 2020. Since its launch, a number of partners have come on board to support the campaign, including Proudly South African and retail giant Shoprite Checkers.

“Yet, this effort must be complemented by government action to stem the inflow of cheap sugar imports, which is costing the industry R2-billion a year. SA Canegrowers hopes to hear Minister Patel speak to the work being done in this regard,” Funke emphasises.

He says the industry has also taken steps to honour the masterplan’s commitment to supporting small-scale growers and promoting the transformation of the industry.

In January, the industry paid out R60-million as an additional premium price to qualifying small-scale growers. This figure was over and above the R165-million paid out to small-scale growers as part of a commitment to invest R1-billion in the industry’s transformation over five years, Funke outlines.

However, he notes that critical for the survival of large and small-scale growers is government fulfilling its commitment when it comes to a review of the socioeconomic impact of the Health Promotion Levy (HPL), which is also known as the sugar tax.

“While no evidence has been produced to date that the tax has had a positive impact on obesity levels in the country, it has had a devastating impact on growers and the livelihoods they support, resulting in 16 621 jobs and R2.04-billion in revenue being lost during the first year of its implementation alone.

“We, therefore, call on the Minister to commit government to conducting much needed research into the impact of the HPL,” Funke states.

Also, he emphasises that the acceleration of the diversification of the sugarcane value chain is crucial to the industry’s long-term sustainability.

In May 2021, SA Canegrowers and the Roundtable on Sustainable Biomaterials announced the findings of a joint study on the viability of using South African sugarcane to manufacture sustainable aviation fuel.

This study was presented to the Value Chain Diversification Task Team established under the masterplan.

Funke says the organisation hopes to hear Patel make a meaningful announcement about the progress of work under way to establish an enabling framework for this promising industry.