With major sugar mills remaining in business rescue and a possible increase in the Health Promotion Levy (HPL), or sugar tax, still looming, the sustainability of the sugar industry remains under threat, industry body SA Canegrowers has said.
It noted that the sugar tax had suppressed the market for locally produced sugar and cost the industry more than 16 000 jobs since its implementation in 2018.
Newly elected chairperson Higgins Mdluli said at an AGM that the promise to review the HPL under Phase 1 of the Sugarcane Value Chain Masterplan had not been kept and that no meaningful engagement on the matter had taken place.
He implored the South African government to support the sugar industry to safeguard the small canegrowers and jobs it sustained. He also called for the scrapping of the HPL in its entirety.
Mduli argued that the HPL was also a barrier to investment in the industry’s transformation, despite transformation being one of the goals of the masterplan.
He cited research conducted by the Bureau for Food and Agricultural Policy finding that an increase in the HPL would lead to less land under sugarcane cultivation and less sugarcane being delivered to mills, particularly from small-scale farmers.
“We need the industry to do more than just survive. The more we grow and expand, the more we can invest into supporting small-scale growers. To advance transformation, we need to recognise the barriers to sustainability and growth,” Mduli said.
SA Canegrowers also called on government to fast-track the value chain diversification project through Phase 2 of the masterplan, explaining that a contract between canegrowers, retailers, millers and government was the best mechanism to address the various threats and opportunities in the sugar industry.
Meanwhile, SA Canegrowers appointed Kiki Mzoneli and Andrew Russell as vice chairpersons of the board and Heinrich Eggers, David Littley, Tim Murray, Thobani Lubisi, Dieter Lutge, Suresh Naidoo, Mark Schulz, Graeme Stainbank, Kurt Stock, Pratish Sharma and Rex Talmage as board members.