THE LOSSES of R84.5 million caused by the recent unrest pose a threat to thousands of rural jobs, according to the South African Canegrowers Association.
SA Canegrowers chairperson Andrew Russel said the association was extremely concerned about the impact of the unrest and has called on the government to provide immediate financial relief to growers, particularly small-scale growers.
“As the extent of the damage becomes clearer by the day, there are now thousands of precious rural jobs at risk,” said Russel.
According to the South African Sugar Association, the country’s sugar industry was one of the world’s leading cost-competitive producers of high-quality sugar that made a significant contribution to employment, particularly in rural areas, sustainable development and the national economy. It is a diverse industry, combining the agricultural activities of sugar cane cultivation with the manufacture of raw and refined sugar, syrups, specialised sugars and a range of by-products.
The cane-growing sector comprises 21 926 registered sugar cane growers in KwaZulu-Natal and Mpumalanga. Sugar was manufactured by six milling companies, with 14 sugar mills operating in these cane-growing regions.
The industry produces an estimated average of 2.2 million tons of sugar per season. About 60 percent of this sugar was marketed in the Southern African Customs Union. The remainder was exported to markets in Africa, Asia and the Middle East.
At the time of the riots, SA Canegrowers reported a running total of the potential damage to growers as R300 million if mills could not crush the more than half-a-million tons of cane that was burnt in arson attacks.
Russel said these fears were now materialising, because, to date, mills in KwaZulu-Natal had rejected 135 222 tons of damaged cane.
“Almost a third of the cane rejected thus far, more than 38 000 tons, belongs to small-scale growers who are most at risk of not recovering from revenue losses of this magnitude.”
The association said most smallscale growers had no insurance.
Although many growers awaited relief from fire insurance co-operative Grocane and the South African Special Risk Insurance Association, they had been informed that all cane that had been burnt before the mill closures would not be covered by these entities, even though many mills closed down only after a large amount of cane had been targeted by arsonists.
Furthermore, the association said that because industry transformation benefits were directly linked to the tonnage of cane delivered, small-scale growers whose cane was rejected stood to lose these benefits as well.
The current sub-standard performance of some mills was exacerbating grower losses. In order to minimise losses, growers needed mills to work optimally, which was not happening in many places.
SA Canegrowers said it expected these losses to mount as mills failed to process cane that had been subject to arson quickly enough.
SA Canegrowers said it has written to a number of government entities requesting that financial assistance be paid directly to growers severely impacted by the riots. This included the Department of Trade, Industry and Competition, the National Agricultural Marketing Council, the Agro Funding Unit of the Industrial Development Corporation (IDC), and Parliament’s portfolio committee on agriculture, land reform and rural development.
SA Canegrowers welcomed its engagements with some of these stakeholders.
The association’s leadership has been meeting the IDC to discuss possible bridging finance for affected growers. It said, however, the damage sustained had the potential to cripple the industry, which had already been struggling because of a severe drought, the influx of cheap imports and the health promotion levy (or sugar tax).
To reduce the impact on the growers and communities that relied on the industry for their livelihoods, urgent intervention was required from the government, including immediate financial relief, which would allow growers to stay afloat, maintain operations and retain workers as the sector worked to rebuild itself.
SA Canegrowers said it would also seek further opportunities to act as a facilitator between growers and the government.