The South African Canegrowers Association has made a call to trade and industry minister Ebrahim Patel to provide an update on government’s action to implement its commitments under the Sugarcane Value Chain Masterplan. Patel will deliver the budget for the department of trade, industry and competition today and cane growers in the country hope that government will honour its commitments under the industry master plan.
The Sugarcane Value Chain Masterplan was developed to address a number of serious challenges facing the industry and to ensure its long-term sustainability and profitability.
On 17 November 2020 the first three-year phase of the Masterplan was signed by Patel, agricultural minister Thoko Didiza, sugar industry stakeholders, retailers and social partners. This means that this budget vote comes at the half-way mark of the plan’s implementation.
Signatories to the plan committed to taking action on increasing demand for locally grown and manufactured sugar, Industry price restraint, and Improving import protection.
The Master Plan also lists strengthening small-scale grower support; increasing transformation in the industry; creating a diversified sugarcane-based industry; and the potential restructuring of the industry as priorities.
“Critical for the survival of large and small-scale growers is government fulfilling its commitment when it comes to a review of the socio-economic impact of the Health Promotion Levy (HPL or sugar tax),” said Thomas Funke, chief executive officer at SA Canegrowers.
Sugar tax, Funke said, had a devastating impact on growers and the livelihoods they support. This resulted in 16,621 jobs and R2,04 billion in revenue being lost during the first year of its implementation alone.
This when no evidence has been produced to date pointing to the tax having a positive impact on obesity levels in the country, Funke said.
“We therefore call on the minister to commit government to conducting much needed research into the impact of the HPL,” he said.
According to Funke the acceleration of the diversification of the sugarcane value chain is also 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 Master Plan.
“[We] therefore hope to hear minister Patel make a meaningful announcement about the progress of work underway to establish an enabling framework for this promising industry,” Funke said.
Since the signing of the Sugarcane Value Chain Masterplan various strides have been made. This includes steps taken to honour the plan’s commitment to supporting small-scale growers and promoting the transformation of the industry.
In January 2022, 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 these growers as part of a commitment to invest R1 billion in the industry’s transformation over five years.
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