During his Thursday State of the Nation address in Cape Town, the SA Canegrowers Association is requesting that President Cyril Ramaphosa announce meaningful measures to protect the livelihoods of those who depend on the sugar business.
The organisation expects the president to equal the South African Sugar Industry Association’s January donation of R79 million to small-scale growers.
According to Kabelo Kgobisa, spokesman for the SA Canegrowers, over R216 million has been provided to transformation funds for small-scale farmers, but it is insufficient to save the country’s more than 21 000 growers due to a number of adverse conditions. He stated that the president should also interfere.
“Therefore, it is crucial that [Ramaphosa] use his Thursday State of the Nation Address to announce substantial measures to save the one million jobs dependent on the sugar industry,” he stated.
The sugarcane planters also want the president to address the sugar tax issue, which Finance Minister Enoch Godongwane ignored in his midterm budget speech.
The group submitted their opinions to the Treasury in response to a November request for feedback on the Budget Review 2023.
As an intervention to prevent obesity and diabetes, the sugar tax, also known as the health promotion levy (HPL), was introduced to the industry in 2018 as a means of reducing sugar consumption.
In his Budget Speech in February of last year, Godongwana announced a tax rise, stating that the levy on beverages containing more than 4g of sugar per 100ml will increase from 2.21c/g to 2.3c/g.
There is also a chance that the charge would be extended to include fruit drinks, although the modifications are not yet in force because the minister has recommended revisiting the issue in April 2023 to allow for additional consultation.
However, the delay is becoming intolerable for the industry. It has attacked its purpose on many occasions, claiming that “there is no evidence that the tax has had a positive effect on the country’s obesity rates.”
The cane cultivators are concerned that the tax poses a substantial danger to small-scale cultivators. It has been suggested that keeping the levy during this sluggish economy harms the finances of cane growers, workers, and communities who depend on sugarcane for a living.
According to Kgobisa, the country’s cane farmers have suffered greatly as a result of the KZN July riots and floods, as well as rising input costs. In October 2022, the sugar milling behemoth Tongaat Hulett was placed under business rescue, according to him.
“Recently, SA Canegrowers data revealed that the industry will lose R723 million in 2023 alone due to loadshedding-related irrigation difficulties. As producers struggle under the weight of these obstacles, the industry is exerting every effort to assist the most vulnerable industry members. We require confirmation from the President that the government is taking the same measures.
“The government will follow where the President leads.” Therefore, he must communicate the significance of the sugar business in particular and rural economies in general.
Kgobisa stated, “SA Canegrowers is thus calling on President Ramaphosa to use his State of the Nation Address (SONA) to emphasize the actions that the government is taking to match the industry’s commitment to safeguarding South African growers, businesses, and employment. Government action should include repealing the job-killing HPL, reiterating its commitment to purchasing only locally produced sugar and ensuring compliance, and providing short-term relief to growers to mitigate the impact of loadshedding, such as a higher diesel rebate and tax incentives for alternative energy.
“The industry remains committed to ensuring the success of the Masterplan and collaborating with the government to ensure the industry survives the current turmoil and preserves valuable livelihoods.”
»Canegrowers in South Africa want Ramaphosa to safeguard their industry«