The sugar industry
To be or not to be
LAST week we saw the Minister for Sugar, chairman of FSC, chairman of Sugar Cane Growers Fund and other industry leaders participate in a public interaction with farmers in different areas in the West.
Notable of all was the Ba meeting where a farmer rattled a few feathers of the minister and his team by his questions and his tone of presentation.
This is not new to Fiji’s sugar politic as history will tell us that the sugar industry was the birth place of many Indo-Fijian leaders back from the indentured labourer (girmit) days.
So, pardon the farmer minister, if you didn’t like the tone of the farmer, but he did raise a few valid concerns which will need a bit more soul-searching and action by the Minister for Sugar.
The farmer raised the issue about the $1 grant payment for manual harvesting from the 2023 season which was announced by the Minister of Finance in his budget address.
The Ministry for Sugar was allocated $49.1million (excluding multiethnic budget) purely for the sugar industry.
Interestingly $5.5m was allocated for drainage for sugarcane farms, $ 5.0m for increase in cane production, $1m for manual harvesting, $5.5m for sugarcane farm drainage, $2m for new farmer incentive and lease premium assistance and $2m for cane road access.
This issue raised in Ba by the farmers was about the $1m allocation for manual harvesting.
About 60 per cent of land used for sugarcane farming is hilly and rough terrain where mechanised harvesting has not been possible, so rightfully government decide to provide some relief to farmers to assist with the farm labour and cane cutting issues.
If my arithmetic is correct $1m dollars will translate in assisting a production of 100,000.00 tonnes of cane harvested manually in the 2023 season.
This would mean, if a farmer produced 100 tonnes of cane manually in the last season than he would qualify for a $100 grant.
This may not sound significant in value, but it was an important starting point for providing incentive for manual farmers who have been struggling with increase in cost of harvesting.
The only challenge for the government would be if the $1m is sufficient for all manually harvesting farmers considering that 60 per cent of farm land is still harvesting annually.
The second important aspect of this year’s budget was the allocation of $5m for providing incentive to increase production.
According to industry sources, a farmer would be paid $5 per tonne if he increases his production this season in comparison to the 2022 season.
I should qualify my statement to mention that the $5 incentive is something which is not available in any sugar industry related website.
It is possible that the Minister for Sugar might have made this known to the farmers at a forum.
The anticipated or targeted 1.9 million (some say 2 million) tonnes of sugarcane harvesting did not eventuate to the disappointment of the minister and the industry in the last season.
The industry only produced 1.6m of cane with 170000 tonnes of sugar with a dismal TCTS rate of 10.7.
However, there would still be good farmers who would have increased their production in comparison to the 2022 season.
For example, if a farmer harvested 100 tonnes of cane in 2022 and increased its production to 130 tonnes in 2023 season than the farmer would attract an incentive of $5 x 30 tonnes = $150.
This is a good scheme because it is productivity based and good farmers would have benefited from this scheme.
With a budget of $5m would mean, farmers were expected to increase production of 1million tonnes of cane (x$5 = $5milion).
Breakdown in the industry
The 2023 harvesting season started in June 2023 and the annual budget was passed in July 2023 to be effective from August 1, 2023 to July 31, 2024.
Since harvesting had already started in June 2023, the best time for them to replant and cultivate more land with sugarcane is soon after the harvesting which would have assisted in increasing sugar cane production.
This is purely for this reason that farmers are all prepared for the harvesting season with their workforce, resources and machinery and at the same time prepare their land for next year’s crop after harvesting.
So, it is at this time, applications for all grants are to be made to the relevant stakeholders (SCGF, MOS, FSC etc).
Secondly the weather pattern is favourable at this time with dry season to prepare the land for the new crop.
With the Ba farmer claiming that the $1 payout has not been done 3 months after harvesting ended, I would also presume that farmers have not accessed funds either by way of grants or zero-rated ((interest) planting assistance loan from SCGF during the harvesting season in 2022 or 2023.
And this now brings us to the question as to how did FSC arrive at the 1.9m target for harvesting for the last season.
The target of 1.9million tonnes of cane for 2023 season should have been set during the harvesting season of 2022 or in the early months of 2023.
Assessment of cane farms by FSC and SCGC field staff would have already indicated if the crop would increase by an ambitious figure of 300,000 tonnes of cane in 2023.
And for the crop to increase, one of the important indicators of any increase would be if farmers are benefiting from any incentive scheme provided by government.
At that time (2022) there was none or only lip service incentive provided in the 2022 budget apart from the guaranteed price top-up to $80.
So, the million-dollar questions are:
❏ How did FSC arrive at the targeted figure?
❏ What role did SCGC play in setting the targets?
❏ Was the $5 incentive to improve production popularised by FSC and SCGC with farmers?
❏ How many farmers in each sector improved its performance? If yes, then what are the indicators for it and if no then what are the reasons for it?
❏ Why was the $1 payout not made to farmers for manual harvesting up until now?
❏ Why didn’t the SCGC follow up with FSC for the $1 payout?
❏ Why was the minister not made aware of the nonpayment?
❏ Did FSC and SCGC mislead the minister in respect of target setting and performance of the mill and the harvesting?
❏ Is the minister getting too complacent with his approved CEOs and appointed boards?
Is it the same type of management witnessed under the former government, resisting any change brought about by the new government?
These are pertinent questions the Minister for Sugar needs to ponder upon before agreeing to the targets set for 2024 to avoid a similar situation at the end of this year.
The Ministry for Sugar and Ministry of Finance need to tighten up the monitoring and evaluation excise on the funding made available to the industry so that the desired results to improve the production of sugar cane to at least 1.8m tonnes in the 2024 season is achieved.
A more concerted effort is needed form FSC and SCGC in providing proper feedback on the fund invested in the sugar industry to improve production.
SAILESH NAIDU is a sugar industry advisor and business consultant. The views expressed in this article is the author’s and are not necessarily shared by this newspaper. Email:btrainersconsultants@gmail.com