Sugar imports must stop! But industry must transform

The South African sugar industry is on the verge of collapse as a result of cheap sugar imports, unless some drastic protection measures are implemented in the form of effective protection tariff by the International Trade Administration of South Africa (ITAC) within the next 3 months.

R172m for black growers 

SAFDA’s fight for transformation yields immediate benefits

The interventions come as a huge relief to small scale growers such as Walter Mandlazi, who despite producing as high as 160t per hectare on his 10ha farm at Figtree D in Komati, still can’t make profit due to the lack of econonies of scale which increases production costs.

While some within the industry raises concerns about whether the industry will afford to pay the above transformation “bill”, Bruce Dunlop of Tongaat Hulett advises that 

industry’s contribution towards afford to pay the above transformation “bill”, Bruce Dunlop of Tongaat Hulett advises that industry’s contribution towards transformation and will end up with the industry celebrating the return on investment in the long term. “While it is known that in the current situation it is the small scale growers who are the hardest hit, commitment to transformation should not be just about sharing the spoils. 

It must be about sharing the pain as well”, says Bruce Dunlop.transformation must not be viewed as a cost, but an investment the return on which will be ernomous in setting the industry on the right path in the country’s pursue of Sugar Industry’s Short Term Transformation Plan Submitted to Parliamentary Portfolio Committee on Trade and Industry on 11 May 2018.


INTERVENTIONSAMOUNTR/ton cane
Intervention 1
Increase in premium cane payment for black small-scale sugarcane farmers - based on local market sugar pricing 
R60mR32
Intervention 2
Establishment of a premium cane Price for black sugarcane farmers (who do not qualify as small scale farmers) 
R35mR23
Intervention 3
Subsidisation of black small-scale sugarcane farmers’ cane transport costs 
R20mR8
Intervention 4
Access to seed cane of the appropriate varieties for black small-scale sugarcane farmers. 
R20mR11
Intervention 5
Subsidisation of black small-scale sugarcane farmers’ membership levies.
R20mR4
Intervention 6
Institutional capacity building subsidy to fund start-up costs of new emerging black sugarcane farmer associations
R20mR3
Intervention 7
Allocate additional funding for the training of black sugarcane farmers via the Grower Development Account (GDA) 
R20mR4
Intervention 8
Creation of Sugar Industry Job Creation Accelerator Programme for black youth and women. 
R20m
TOTALR172m

Sugar imports must stop!
But industry must transform

The South African sugar industry is on the verge of collapse as a result of cheap sugar imports, unless some drastic protection measures are implemented in the form of effective protection tariff by the International Trade Administration of South Africa (ITAC) within the next 3 months. 

SAFDA Vice Chairperson, Lindiwe Hlubi addressing guests at the SAFDA Offcial Launch Gala Dinner, Elangeni Hotel Durban. (Pic: Nolwazi Maphosa)  >>

Earlier this year the sugar industry submitted a proposal to ITAC, seeking an increase in the dollar based reference price, which would afford the local industry some level of protection. The current $566 dollar based reference price has pushed

Sfiso Mnguni, Grower Support Services Manager

the Industry to the verge of near collapse. In order to come out of this situation, the industry is seeking an increase of $290 on the dollar based reference price, which will take the tariff to $856 per ton of imported sugar. ITAC has recently indicated that it will consider the Industry’s application and provide response by end July 2018, meanwhile farmers are hit hard on their cane proceeds as many are reporting negative cash balances on their cane proceeds. This literary means that after a year long hard work of investing in the crop, farmers walk away indebted to the mill for crushing their cane. Unless something drastic happens urgently to raise the import tarrif, sugarcane currently remains a worthless crop. The situation is affecting small and large farmers and sugar millers alike as the Industry has had to take a 13.5% decrease on the national price. While ITAC remains key in implementing the sought favourable tarrif, the Industry on the other hand has a duty to come clean on its support for the Country’s transformation agenda. SAFDA has put forward its reciprocity proposal as a contribution to the industry proposal, in terms of which, the sugar industry needs to address, among other issues, the following: • Create a transformation fund of which  purpose is to fund a number of industry’s transformation initiatives.

• Implement local market price for all black growers

• Farm gate price determination for all black growers

• Address problems relating to burn tocrush delays by reviewing the current daily rateable deliveries (DRD) and change it to provide preferrential access to the mill infavour of black growers.

• Funding of SAFDA by the Industry in recognition of it being the industry’s transformation vehicle.

While the above would certainly assist both, black growers in enhancing profitability and the industry in enhancing its transformational credentials, SAFDA believes that more can be done by the industry, considering the value of the tariff which can be worth between R2 billion to R4 billion per annum.

MPUMALANGA GROWERS  

Elect their Provincial SAFDA Leadership 

On Friday 23rd March SAFDA Mpumalanga growers elected its provincial leadership. The 15 member team consists of representatives of small scale and land reform farmers from Komati and Malelane.
SAFDA is pleased that all 8 joint venture projects, who earlier this year took SAFDA membership were represented.
Each one of the 7 Komati SSG projects and 8 land reform joint venture projects across Komati and Malelane were represented by 5 delegates in the meeting and elected 1 representative to the Provincial Leadership Committee. Amongst some immediate tasks of the Committee are to facilitate the formalization of local leadership structures in all areas, support the establishment of SAFDA Mpumalanga Provincial Office and support employment of office staff.

SAFDA Recognition 

A victory for the entire industry 

A new era in the life of the Sugar Industry, charecterised by unity and a renewed commitment to transformation. This came with the recognition of SAFDA by the South African Sugar Industry as was demonstrated at the Official SAFDA Launch functions held on the 26th January 2016 through a well attended celebratory Imbizo at Gingindlovu 

Sports Ground and the evening Gala Dinner at Elangeni Hotel, Durban. SAFDA recognition was described by most speakers as a victory, not only for SAFDA, but for the entire industry. 

Siyabonga 

Siyabonga Madlala

Executive Chairman of SAFDA

Bheki Cele

Former Deputy of Agriculture Forestry and Fisheries

Candith Mashego-Dlamini 

Deputy Minister of Rural Development and Land Reform

Joan-Marie Fubbs

Chairperson of Parliamentary Portfolio Committee on Trade & Industry

Themba Mthembu

KZN MEC for Agriculture and Rural Development

Hans Hackmann 

SASA Vice Chairman

Charl Senekaal

Mega Farmer

Adv. Mbili 

Chief Director - RLCC

Bruce Dunlop

Tongaat Hullett

Over 600 Growers to Receive Training 

Over 615 small scale and land reform growers are set to receive agronomic training in various training categories for 2018/19 season. This has been made possible by the Sugar Industry’sapproval of SAFDA’s R1.1 million funding for training of black growers. Courses include among others, agricultural skills courses, Junior and Senior Certificates in Sugar CaneAgronomy. The training will be provided by Shukela Training Centre and the South African Sugar Research Institute (SASRI)

Swayimane Co-ops Celebrate  R2.6 million DRDLR Funding

Back: Mfu. Bhekukwenza Ngcobo, Counsellor Londi Zondi (Ward 11), Muziwemali Thusi (SAFDA MAC and Siphapheme Co-op Chairman), Patric Bhengu (SAFDA), Mfanufikile Mbatha (Inzwakele Co-op Chairman), MB Mthembu (SAFDA), Bheki Zondi (Mshwati Municipality LED Manager), Nontobeko Phungula (DRDLR), Nathi Msweli (SAFDA), Silondiwe Radebe (DRDLR)

Front: Mrs Nkwanyana (Udondolo Trust Accountants), Sbusiso Nkwanyana (Udondolo Trust Accountants), Mzubanzi Buthelezi (Ekupholeni Traditional Leadership Counsellor), Inkosi Gcumisa, Counsellor Nhlakanipho Gasa (Ward 8) 

Swayimane small scale growers recently gathered at the Imbizo at Nongco Community Hall in celebration of the advancement of the second tranch of funding from the Department of Rural Development and Land Reform (DRDLR). The funding is part of the total of R9 million approved and partially advanced by the Department in 2015 towards sugarcane development in the rea. In this second tranch, Siphapheme Co-operative received R1,700,000 while Inzwakele got R800,000 thousand. When receiving the funds the Chairman of the South African Farmers development Association (SAFDA) Noodsberg Mill Area Committee (MAC) and also Chairman of Siphapheme Cooperative, Muziwemali Thusi said: “As a result of the earlier intervention by the Department, production increased 

from 16000 tons to 60000 tons per harvesting season.” The traditional leader of the community, Inkosi Gcumisa applauded the Department for assisting his community, while appealing to the Department of Rural Development and Land Reform to make land available to the people, as what is available in communal land isn’t enough. Similar sentiments were shared by Counsellor Gasa of Ward 8, who pledged political leadership support for initiatives which seeks to help in the upliftment of the community of Swayimane. According to the business plan, the funds will be used towards cane development, which will include purchasing of inputs, implements and building of the sherd on the site, which has already been made available by Umshwati Local Municipality.