The SA Canegrowers association is calling on President Cyril Ramaphosa to announce substantial measures to save livelihoods that depend on the sugar industry during his State of the Nation Address in Cape Town on Thursday.
The association is expecting the president to match a South African Sugar Industry Association disbursement of R79-million that was donated to small-scale growers in January.
According to Kabelo Kgobisa, spokesperson for the SA Canegrowers, over R216-million has been contributed towards transformation funding for small-scale farmers, but it is not enough to save the country’s more than 21 000 growers due to several headwinds facing the country. He said it is about time the president also intervened.
“It is therefore critical that [Ramaphosa] uses his State of the Nation Address on Thursday to announce substantial measures to save the one million livelihoods that depend on the sugar industry,” he said.
The sugarcane growers also want the president to address the issue of sugar tax which was previously snubbed by Finance Minister Enoch Godongwane in his mid-term budget speech.
The association made its submission to the Treasury in accordance with a call for comments on the Budget Review 2023 issued in November.
The sugar tax, also known as the health promotion levy (HPL), was introduced to the sector in 2018 as an intervention to reduce sugar consumption to prevent obesity and diabetes.
In his Budget Speech in February last year, Godongwana announced an increase in tax, which stipulated that the levy for beverages with more than 4g of sugar content per 100ml, will increase from 2.21c/g to 2.3c/g.
There is also a possibility that the levy will be extended to fruit juices, but the changes are not yet in effect, as the minister has proposed to revisit the matter in April 2023 to allow for further consultation.
Nevertheless, the wait is becoming unbearable for the sector. It has, on multiple occasions, denounced its purpose, saying that “there is no evidence that the tax has had a positive impact on obesity levels in the country”.
The cane growers are concerned that the levy poses a significant threat to small-scale growers. It has been said that maintaining the levy during this stagnant economy causes financial harm to cane growers, workers, and communities that are dependent on sugarcane for their livelihoods.
According to Kgobisa, cane growers in the country have suffered tremendously as a result of the KZN July riots and floods, and increasing input costs. He said things worsened when sugar milling giant Tongaat Hulett was placed under business rescue in October 2022.
“More recently, SA Canegrowers data revealed that the industry is expected to lose R723 million in 2023 alone as a result of loadshedding-related irrigation challenges. As growers strain under the weight of these challenges, the industry is making every effort to support the most vulnerable industry participants. We need to hear from the President that the government is doing the same.
“Where the President leads, the government will follow. He must therefore make clear the importance of the sugar industry in particular, and of rural economies in general.
Kgobisa added: “SA Canegrowers is therefore calling on President Ramaphosa to use his SONA to highlight the measures that the government is taking to match the industry’s commitment to saving South African growers, businesses, and jobs. Government action steps should include scrapping the job-killing HPL; reiterating its commitment to procuring only locally produced sugar and ensuring departments are complying; and providing short-term relief to growers to mitigate the impact of loadshedding including a higher diesel rebate and tax incentives for alternative energy sources.
“The industry remains committed to ensuring the success of the Masterplan and working in partnership with government in order to ensure the industry survives the current turmoil and valuable livelihoods are preserved.”
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