Sour sugar industry spat is resolved - Sasa

Sugar cane fields in KwaZulu-Natal Empangeni. Photo: Simphiwe Mbokazi/Independent Newspapers

Sugar cane fields in KwaZulu-Natal Empangeni. Photo: Simphiwe Mbokazi/Independent Newspapers

Published Jul 7, 2024


A sour sugar industry spat around transformation funding in the sector had been resolved, the South African Sugar Association (Sasa), which represents the sugar industry in South Africa, said on Friday.

Sugar industry players in South Africa were last week at loggerheads over the funding, amid allegation­s of fronting and racism against black small-scale growers.

SA Development Association (Safda) and SA Canegrowers have successfully resolved the recent impasse around millions of rand of transformation funding, and the allocation of funding to small scale-growers organisation’ members.

Advocate Fay Mukaddam, the independent chairperson of Sasa, said on Friday that over the past five years, as part of a five-year transformation plan, Sasa had spent R1.12 billion on transformation interventions/initiatives, especially for the benefit of black small-scale growers (SSGs).

The Sasa five-year transformation plan, which ended in the 2023/2024 season, has now been extended to 2024/2025 with an allocation of R238.9 million.

Mukaddam said all parties, including the South African Sugar Millers’ Association (Sasma), had now agreed on the allocation of the R238.9m budget for the current financial season, which ends on March 31, 2025.

Transformation funding is intended to support and develop previously disadvantaged individuals and reaches small-scale growers.

Sasa said it was “extremely happy“ that Safda and Sacga had found common ground regarding the transformation funding matter. They were now speaking with one voice.

Mukaddam said, “Industry leaders are now committed to working together to advance the interests of the sector, and to ensure that the main focus is on the ‘Reimagined Cane Industry Strategy.’

“Also importantly, industry leaders are unambiguous in their assertion in seeking to leverage the proposed Phase Two of the Industry Master Plan to ensure more concerted efforts by all stakeholders in order to increase the optimisation of the local market, accelerate product diversification endeavours, permanently resolve the sugar tax issue, strengthen trade protection and cement the foundational role of small-scale growers in the sector.”

Safsa said, “We are pleased to announce that we have successfully resolved the recent impasse regarding the delivery-based transformation interventions funding. These crucial Transformation Interventions will continue in the same format as in the previous years, ensuring ongoing support for our farmers by sugar industry partners. ”

Shoots of disagreement

Safda’s executive chairperson, Dr Siyabonga Madlala, said while the agreed five years lapsed at the end of the 2023-2024 season, which ended on the 31st of March 2024, the Sasa Council approved an extension of the fund for one more season (2024-2025).

Safda had put up a proposal suggesting that the funds be treated and disbursed in the same way as they had been disbursed in the past five years, especially the component that was influenced by the tons of sugarcane delivered by farmers.

“Safda made this proposal in order to spend less time debating the disbursement of a one season funding and focus on long-terms transformation plans of the industry, beyond the initial five-year plan. This proposal was not supported by some members of the industry, leading to delays in disbursements that forced farmers to stand up and demand answers,” he said,

Safda last week accused the SA Canegrowers industry association of “fronting”, and “condemned” what it called “disturbing anti-transformation tendencies”.

The SA Canegrowers rejected the claims: “SA Canegrowers will continue to work on behalf of all canegrowers in South Africa and ensure that transformation funds are spent in an accountable and transparent manner. We will also continue to stand for what is right and that is to ensure that the funds reach the intended beneficiaries and are not intercepted.

“It is imperative that transformation is implemented in a sustainable and enduring manner across the various cane growing regions, and we will continue to advocate for this. The survival of the industry already faces many external challenges, including cheap sugar imports and the Health Promotion Levy, emphasizing the need for a fact-based collaborative approach to grower development and sustainability.”

Sasa then convened an urgent meeting to find a solution to the impasse.

Mukaddam said all the industry leaders now regretted the language and tone of the discourse, which found its way to the public domain regarding the transformation funding stalemate.

“In retrospect and upon honest reflection, we realise the confrontational approach could have precipitated an industry crisis. We have, therefore, agreed that going forward, any disagreements emanating from divergence of views/positions, which is normal and bound to happen from time to time, need to be better handled. There is now complete alignment in terms of transformation funding,” she said.