SOUTH AFRICA – The sustainability of South Africa’s sugar industry is facing significant threats as major sugar mills remain in business rescue and the potential increase in the Health Promotion Levy (HPL), commonly known as the sugar tax, looms.
Industry body SA Canegrowers has raised alarms over these developments, noting severe impacts on the market and employment.
Since the HPL’s implementation in 2018, the sugar tax has suppressed the market for locally produced sugar, resulting in the loss of more than 16,000 jobs.
Newly elected chairperson Higgins Mdluli criticized the lack of action on the promise to review the HPL under Phase 1 of the Sugarcane Value Chain Masterplan, stating that no meaningful engagement has taken place.
Mdluli called on the South African government to support the sugar industry to protect small canegrowers and the jobs they sustain. He advocated for the complete removal of the HPL, arguing that it hampers investment in the industry’s transformation, a key goal of the masterplan.
Research by the Bureau for Food and Agricultural Policy indicates that increasing the HPL would reduce land under sugarcane cultivation and decrease the amount of sugarcane delivered to mills, especially 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 in supporting small-scale growers. To advance transformation, we need to recognize the barriers to sustainability and growth,” Mdluli emphasized.
SA Canegrowers also urged the government to expedite the value chain diversification project through Phase 2 of the masterplan.
They explained that a coordinated effort involving canegrowers, retailers, millers, and the government is essential to address the various threats and opportunities in the sugar industry.
Bio-energy production
Concurrently, South Africa and the UK have entered into a new collaboration aimed at transforming sugar into energy on an industrial scale to address South Africa’s energy challenges.
The project, led by British agri-technology company AgriSound, in partnership with the UK Agri-Tech Centre and South Africa-based GYO Systems, focuses on improving sugarcane yields through enhanced monitoring of crop pests and innovative hydroponic technologies.
The initiative aims to increase bio-energy production in South Africa by deploying AgriSound’s ‘Polly’ insect listening device to track and mitigate damage caused by pests like the Eldana Stalk Borer.
The data generated from these devices will provide actionable insights to help growers sustainably harvest more abundant sugarcane crops within existing production areas, thus avoiding conflicts over land use.
The project has received a grant of over £200,000 from Innovate UK’s African Innovation Collaborations for Net Zero Places.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. HERE
