The South African Farmers Development Association (SAFDA), is celebrating a monumental win for its farmers. The board of the South African Sugar Association (SASA) approved a new premium price for small-scale farmers valued at around R60 million.
This is aligned to the Sugarcane-Based Value Chain Master Plan, which aims to ensure small-scale grower support through a dedicated small-scale farmer master plan.
Farmers in the sugar industry are paid using a Recoverable Value (RV) which recognises investments made in the production process to achieve sugarcane of good quality.
“Because of poor economies of scale, long distances to sugar mills, and the inability to own farming equipment, small-scale farmers struggle to produce good quality cane. The RV price is made up of proceeds derived from the sale of sugar and molasses the industry sells in the local and international markets,” SAFDA says via a statement.
“For sugar, international markets are distorted, loss making and residual. They dilute revenue for small-scale farmers. The Premium Price will bring farmers’ price in line with the local market and compensate them for international market losses as well as correct the disadvantages linked to the scale and location of their operations.”
SAFDA was established in 2015 to combat the decline of small-scale farmers and ensure the sustainability of black farmers in an industry where their wellbeing is not always considered.
“It is something to celebrate to see that SAFDA is delivering tangible benefits for our farmers in the short period that we have been in existence. This premium price did not come on a silver platter.
“SAFDA stood firm when industry participants who have been in the game for decades, cried foul about affordability. We reminded them that small-scale farmers are supposed to be foundational to the industry in terms of the Master Plan,” says Dr Siyabonga Madlala, SAFDA CEO.
This premium price payment will add to the SASA Transformation Initiatives, which were approved in 2018 for R1 billion over a period of five years. According to this Transformation Fund, R200 million is disbursed to farmers on annually.
Of the total funds allocated to Transformation Initiatives in 2021/22, small-scale growers will get R118 million disbursed to them.
Land Reform farmers will get R51 million. The following table provides a breakdown of the Interventions and Premium Price when they are payable and the rates applicable.