SA Cangegrowers calls on the government to honor the commitments of the Sugar Masterplan

When the minister Ebrahim Patel hands over the Department for Trade, Industry and Competition (DTIC) budget on May 20, industry organization SA Canegrowers says it hopes he will take the opportunity to provide an update on government action to implement its commitments under the sugarcane value chain master plan.

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

The first three-year phase of the master plan has been signed by Patel, Minister of Agriculture, Agrarian Reform and Rural Development Thoko Didizaactors in the sugar sector, distributors and social partners in November 2020, which means that the budget will be delivered halfway through the implementation of the plan, SA Canegrowers CEO thomas funk points out.

Signatories to the plan pledged to take action to increase demand for locally grown and manufactured sugar; ensure the moderation of industry prices; improving import protection; strengthen support for small producers; increase industry transformation; to create a diversified industry based on sugar cane; and potentially restructure the industry.

As part of the commitment to increase demand for locally produced sugar, a number of stakeholders have agreed to various levy levels.

As part of this commitment, the government is committed to promoting the use of locally produced sugar by all ministries and public entities.

DTIC has also begun to explore appropriate ways to designate sugar and sugar-containing products under the Preferential Sourcing Policy Framework Act, Funke said.

He says the organization is therefore asking Patel to provide an update on the progress made on these two commitments.

“In line with its commitment to encourage consumers to buy locally produced sugar, SA Canegrowers launched its Home Sweet Home campaign in December 2020. Since its launch, a number of partners have joined the campaign including Proudly South African and retailers. Giant Shoprite checkers.

“Yet this effort must be complemented by government action to stem the influx of cheap sugar imports, which cost the industry R2 billion a year. SA Canegrowers hopes to hear from Minister Patel about the work being done in this regard,” Funke points out.

He says the industry has also taken steps to honor the blueprint’s commitment to support small-scale producers and promote industry transformation.

In January, the industry paid R60 million as an additional premium to eligible small producers. This figure exceeds the 165 million rand paid to small producers as part of a commitment to invest 1 billion rand in the transformation of the industry over five years, points out Funke.

However, he notes that it is essential for the survival of small and large producers that the government fulfills its commitment when it comes to examining the socio-economic impact of the Health Promotion Levy (HPL), also known as the sugar tax.

“Although 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 producers and the livelihoods they support. , resulting in the creation of 16,621 jobs and R2.04 billion in lost revenue in the first year alone of its implementation.

“We therefore call on the minister to commit the government to conduct much-needed research into the impact of HPL,” says Funke.

Furthermore, he points out that accelerating the diversification of the sugarcane value chain is crucial for the long-term sustainability of the industry.

In May 2021, SA Canegrowers and the Sustainable Biomaterials Roundtable announced the results of a joint study into the viability of using South African sugar cane to make sustainable aviation fuel.

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

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

Rachel J. Bradford