Sugar industry fears more rural job losses amid calls for ‘sugar tax’ hike

Calls by the Healthy Living Alliance (HEALA) for the national government to double the health promotion tax or “sugar tax” will lead to more job losses in communities living in rural areas, according to the report. South African Canegrowers Association.

In the first year of sugar tax implementation (2018), the industry is said to have lost more than 16,000 jobs in total, including 9,000 in the cane-growing sector alone, according to a report. commissioned by the National Economic Development and Labor Council (Nedlac) titled Economic Impact of the Health Promotion Tax on the Sugar Market Industry.

Read: Sugar tax could be first of several ‘health promotion’ measures

The report also points out that the production of the sugar agriculture sector decreased by a cumulative amount of Rand 414.2 million in 2019 due to the sugar tax. It decreased by 214.7 million Rand in 2018 and 199.5 million Rand in 2019, while the production of the sugar processing sector decreased by a cumulative amount of 772.1 million Rand in 2019. .

In addition, the report states that the sugar tax resulted in a R653 million drop in investment in the economy.

SA Canegrowers chairman Andrew Russell said the doubling of the sugar tax shows no consideration for the impact it will have on the one million people who depend on the sugar industry for their income.

He also questions the impact of the tax on reducing obesity levels in South Africa.

“Most of these job losses have taken place in communities living in rural areas, where poverty levels are the highest,” notes Russell.

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Perhaps the reason the group of academics downplays the devastating economic impact of the sugar tax to date is that the majority of them are based in universities abroad and therefore do not understand the situation. disastrous economic situation in which our country finds itself, with an unemployment rate at 44.4%, or the difficulties that so many rural people are facing, ”he adds.

HEALA claims, however, that the sugar tax has had little impact on employment levels in the sugar industry.

The group presented two studies that followed the consumption of taxable sugary drinks among young adults in Langa, Western Cape and Soweto in Gauteng as evidence that the sugar tax had a positive impact, essentially a decrease in the consumption of sugar. sugar.

However, there is still little or no publicly available evidence that the tax has had a positive impact on obesity levels in the country.

SA Canegrowers says this is happening despite numerous industry requests that the government commission a study that will assess whether the sugar tax has met its goal of improving health.

“The point is, without jobs, people struggle to provide their families with the health and nutrition they need. It is therefore in everyone’s interest that rural jobs are protected, ”Russell reiterates.

Read: RCL Foods bruised by tariffs and taxes

Meanwhile, SA Canegrowers said it remains committed to working with the government to meet the South African sugarcane value chain master plan commitments to ensure a more diverse and sustainable sugar industry.

“To achieve this, it is essential to protect the livelihoods of commercial and small-scale producers, emerging farmers and thousands of workers living in rural communities,” the association said.

Palesa Mofokeng is a Moneyweb intern.

Rachel J. Bradford