South African small scale cane farmers receive US$14.6m boost from sugar association

SOUTH AFRICA – South African sugarcane farmers are a happy lot following the disbursement of R225 million (US$14.6m) transformation boost by the South African Sugar Association (SASA).

The funding, in which cane growers contribute 64%, is aimed to provide vital support to the farmers.

It was allocated across two growers support programs i.e., R115.4m (US$7.5m) was dished to black growers delivering under 1,800 tonnes of cane.

Meanwhile, R50.47m (US$3.28m) was issued to black growers delivering above 1,800 tonnes of cane.

The additional R60m (US$3.9m) agreed under the Masterplan was apportioned between all qualifying small-scale growers, that is, growers on communal land, and freehold land delivering less than 1,800 tonnes of cane.

The SA Canegrowers Association lauded the move indicating that the payments came at a good time for small-scale growers who have faced tough operating environment in the recent past.

“Over the past two years, growers have survived not only the widespread cane arson that characterised the July unrest.

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“But also, costs incurred to combat the Covid-19 pandemic, the continued implementation of the Health Promotion Levy, declining milling capacity, which means significant quantities of cane being carried over, and an exponential increase in input costs like fertiliser,” said Chairman of The SA Canegrowers Association Andrew Russell.

This is an essential intervention to ensure the survival and success of small-scale growers as work continues under the Masterplan to revive the local industry and restructure it for future prosperity.

More than 21,000 small-scale growers derive their livelihoods from the industry, allowing them to contribute to the sustainability of rural economies.

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“We will continue to work with national government, our industry peers, and our value chain stakeholders to ensure the successful implementation of the Sugar Industry Value Chain Masterplan and the creation of opportunities in the sector so that we can vastly increase the one million livelihoods supported by the industry,” concluded Russell.

The support will enable the farmers to boost the production levels and cater to the towering costs, despite the glaring threat of 7% fall in raw sugar production to 2 million MT in the 2021/22 Marketing Year (MY), from 2.1 million MT in the 2020/21 MY.

This, according to USDA is attributed to limited crushing capacity due to the closure of two sugar mills, and a decline in mill efficiencies.

Darnall and Umzimkulu mills are reported to have been dormant in the 2020/21 or 2021/22 MY due to the financial difficulties faced by the industry.

The Umzimkulu mill has been permanently closed, and the Darnall mill will be temporarily closed in the 2021/22 MY.

The closure of the two sugar mills resulted in growers diverting their sugar cane to other mills, as the operating mills struggled to crush all the cane in both the 2020/21 and 2021/22 MY.

Diversion of cane to other locations has resulted in higher transportation costs as cane is moved over longer distances to mills, as well as the deterioration of cane quality due to the longer period between harvesting and crushing.

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