SOUTH AFRICA – South Africa’s sugarcane industry has expressed relief over the government’s recent decision to omit an increase to the Health Promotion Levy (HPL), commonly known as the sugar tax, in the 2024 Medium Term Budget Policy Statement.
This decision follows debates between industry stakeholders like SA Canegrowers and health advocacy groups such as the Healthy Living Alliance (HEALA) over the impact of doubling the sugar tax on sugar-sweetened beverages, which some industry voices argue has led to job losses.
SA Canegrowers Chairman Higgins Mdluli emphasized the organization’s hope to engage in evidence-based policy consultations with the government to implement policies that protect jobs and rural communities.
“The sugar tax is not supported by evidence,” Mdluli argued. “Since its introduction, it has not promoted health outcomes in South Africa, but to the contrary destroyed jobs in areas that could ill afford it.”
Finance Minister Enoch Godongwana, addressing the current economic climate, acknowledged a tax revenue shortfall for the year, estimating collections to be R22.3 billion lower than projected in February.
Given the shortfall and other external economic pressures, he noted that difficult decisions about spending would be necessary, potentially limiting additional tax increases.
The SA Canegrowers Association pointed to significant job losses attributed to the sugar tax, stating that 16,000 jobs were lost in the first year of the tax’s implementation alone.
The organization warned that any increase in the HPL would have severe repercussions for the industry, especially for rural growers in Mpumalanga and KwaZulu-Natal, who depend on sugarcane production for their livelihoods.
The association also urged the government to take a holistic approach to understanding health and obesity issues, proposing research to consider multiple factors rather than attributing the problem solely to sugar consumption.
Association of Southern Africa Sugar Importers (ASASI) Chairperson Chris Engelbrecht said this decision would contribute to job stability in the agricultural sector
Engelbrecht highlighted the importance of such measures, as they contribute to sustainable employment and economic stability, particularly in rural regions.
The Bureau for Food and Agricultural Policy previously warned that, without changes, the HPL could lead to a 10 percent reduction in sugarcane cultivation by 2030. Such a decline would impact many small-scale growers, potentially driving them into poverty.
South Africa’s sugarcane sector, which produces about two million tons annually and exports approximately 500,000 tons, plays a crucial role in the country’s agricultural economy.
Recently, the newly appointed CEO of the South African Sugar Association (SASA) reaffirmed his dedication to the Sugarcane Value Chain Master Plan to 2030.
This strategy, part of a national effort to promote economic growth in rural areas, includes government-backed studies to assess both the socioeconomic impacts of the sugar tax and the dietary causes of obesity, aiming for a balanced and informed approach to health and industry regulation.
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