New sugar masterplan urgently needed to support rural livelihoods

The growers have repeatedly called to see studies that show reducing sugar in beverages has had measurable health effects in South Africa.

The growers have repeatedly called to see studies that show reducing sugar in beverages has had measurable health effects in South Africa.

Published Jun 8, 2024


By Kiki Mzoneli

Mpumeh Mkhize’s ten-hectare family farm in Umbumbulu, south of Durban supports her eight-member family and 15 workers, but she faces a range of challenges: rising input costs, cows that eat sugar cane, children who also take some cane on the way to school, and runaway fires.

Still, she aims to rent more land and increase her family’s farm beyond the small tract inherited from her father despite the fact diesel used in tractors has skyrocketed in price and fertilizer costs have doubled in a few years.

For one, she hopes sugar miller Tongaat Hulett will pay the levies it owes the industry of R526 million soon, some owed to small-scale growers like herself.

This is even as Tongaat indicated it is likely to take the recent court order that it must pay these levies to the Supreme Court of Appeal.

Mkhize who loves rural life and quiet in the mornings, also says she wishes she had government support in an area where agriculture is almost the only option to earn a livelihood.

Mkhize is one of the 21,000 black small-scale growers that industry transformation efforts have supported and is one of the reasons SA Canegrowers, an industry association representing both commercial and small-scale growers, is really hoping that it will be able to work with the new government on the second phase of the Sugarcane Value Chain Masterplan.

The Masterplan, signed in November 2020, is a social compact between the Department of Trade, Industry and Competition (DTIC), the Department of Agriculture, Land Reform and Rural Development (DALRRD), sugarcane growers, millers, and end users of sugar to ensure the sustainability of the South African sugar industry and promote transformation.

As part of the industry’s transformation efforts, the sugar industry invested more than R1-billion in transformation over five years. This was in addition to a premium price paid to small-scale growers for their sugarcane to promote inclusive agriculture. Through a higher price for the sugarcane, millers and large-scale growers essentially support small-scale growers, keeping thousands of families and many communities in rural Mpumalanga and KwaZulu-Natal in business.

The commitment to transformation funding and a higher sugarcane price formed part of the first phase of the Masterplan which ended in April 2023, and SA Canegrowers is eager to bring the government and business back together to plan a new partnership.

Mkhize says she needs financial support from the government as growing sugarcane has becomes less and less profitable.

SA Canegrowers offers her farming and business advice, as well as training and workshops including to deal with the everyday challenges of cane farming such as fires. These are often started by cattle owners who think burning grass will make new grass grow back more quickly in winter to feed the cows, but fires can get out of hand and destroy her sugar plantations.

Small-scale growers are economically vulnerable to crop losses, but also shocks in the wider industry such as sugar millers going into business rescue, mill break downs, or as taxes that depress demand for sugar.

SA Canegrowers believes a strategy to address industry-wide threats is vital to secure the long-term sustainability of small-scale growers.

To this end, SA Canegrowers urges end users, millers, agricultural experts, growers and the government to come to the table and agree on a second phase of the social compact to keep the industry and rural provinces alive. The sugar industry needs support, which is something the government admits.

“The industry is now in a vicious downward spiral which, left unchecked, will potentially result in the collapse of the industry,” reads the masterplan published by the DTIC and DALRRD in 2020.

The social compact aims to address industry struggles by investing in new markets for sugarcane, offsetting challenges including floods, the 2021 KwaZulu-Natal unrest, and the Health Promotion Levy (or sugar tax) in recent years.

While consumers have long forgotten about the sugar tax and now drink reformulated beverages, the sugarcane growers have been left with the fallout of plummeting demand as drink manufacturers buy less sugar. In the year of implementation in 2018, 250 000 tonnes of sales were lost, and industry revenue dropped by at least R1.2 billion.

Not only do growers continue to face this tax and uncertainty, they worry the sugar tax will rise in the 2025 budget, leading to further job losses. SA Canegrowers have consistently asked that the sugar tax be scrapped because of the economic devastation it causes.

The growers have repeatedly called to see studies that show reducing sugar in beverages has had measurable health effects in South Africa and an impact on obesity in a country where many other factors could be to blame.

These include high prices of healthy food, limited carbohydrate-only diets driven by poverty and even unsafe living environments preventing regular exercise.

The industry is yet to see a single study showing a health impact from the tax. There is a dearth of data on its effectiveness. But studies have been conducted on how it led to job losses.

A second phase of the Masterplan would allow the government and industry to discuss the tax, the harm it causes and the survival of an industry that the government itself admits supports a million livelihoods through downstream industries.

It’s imperative we come together to sit around the table soon to champion an industry that supports small scale growers and allows for a future for all.

Farmers like Mkhize support over 50 people and need the security that an industry plan provides as they feed families despite daily challenges.

Kiki Mzoneli is the Vice-Chairperson of SA Canegrowers.