As the hands of the leadership in governance have changed, the South African Sugar Association (SASA) hopes that the second phase of the Sugar Master Plan will be finalised by the end of October to pave the way for job security in the industry and conclusion of the work done by the previous administration.
Sifiso Mhlaba, the national market and trade policy director at SASA, said they anticipate that the new ministers of agriculture, and trade and industry and competition would meet with them to finalise the plan.
Mhlaba said fast-tracking the master plan would go a long way as the industry has a huge impact on local communities.
‘We need to save this industry’
“This is the industry that needed to be saved and it was on the brink of collapse. From as early as 2015 there was a significant drought. After that, there were tariff hikes, then imports from Brazil [and] then we also had sugar tax being implemented.
“So for about five years, the industry has faced a lot of challenges and government did recognise that the industry was in trouble. This led to a master plan being drafted from all stakeholders,” he said.
Mhlaba said everyone involved in the master plan agreed that at least ten years is needed for the plan to be fully operational. The master plan is the vision for 2030 and was signed in 2020.
“A phased approach was agreed on: phase 1 was from inception until March 2023, then phase 2 will be crafted going forward.
“Phase 1 was to allow the industry to stabilise, and how do we stop the industry from collapsing in the first three years, and how do we diversify the industry for it to be sustainable,” he said.
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Meanwhile, Mhlaba said the master plan had many commitments such as small-scale grower retention, transformation, job retention, and mitigation which are key to ensuring that the commodity moves forward with everyone.
“Small-scale growers have many challenges, they have small areas, [and] they do not have economy of scale. Some of them are further from the mills so their cost structure is different from the structure of large-scale growers; so they need that support.”
The sustainability manager at SASA, Samukelisiwe Maphumulo, said part of the task team in the drafting of the master plan had to look at diversification and how it can help sustain the industry.
Prioritising support for small-scale growers
“The terms of reference for the task team were to investigate and provide detailed recommendations regarding attractive and feasible opportunities in local and international markets for new and additional sugarcane-based downstream products.
“The task team also had to develop detailed strategies and plans against attractive and feasible opportunities to build globally competitive value chains for such sugarcane-based downstream products,” Maphumulo said.
According to Maphumulo, most of the diversification opportunities were still at the scoping and pre-feasibility stages and if attractive, they will move to bankable feasibility before commercialisation.
She said the industry needs investment, government cooperation, and support for small-scale growers to enable diversification.
“No one should be left behind; it is imperative to prioritise support for small-scale growers and ensure their inclusion in diversification efforts. Advocacy for the ring-fencing of Land Bank blended finance for sugarcane projects can help support smallholder farmers,” she said.
Trix Trikam, the executive director of SASA, said with the closure of the two sugarcane mills in KwaZulu-Natal there has been a social impact and it has affected the whole value chain.
“There have been huge financial changes in the areas where the mills operated. Sugar tax remains a critical challenge in the industry. Nothing much can be done.
“The three main challenges facing the industry are sugar tax, sugar imports and insufficient tariff,” he said.
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