Sugar industry development strategy in the pipeline
GOVERNMENT plans to craft a sugar industry development strategy that will address challenges affecting the million dollar industry with potential to change the face of Masvingo Province and the country.
Out-grower farmers in the lowveld are appealing for Government intervention to cushion them from challenges including high operating costs and subdued production.
Close to 1 000 indigenous cane out-growers, the majority of whom are beneficiaries of the land reform programme, have raised concern over high milling costs, input costs and an unfavourable tax regime.
They want sugar cane to be granted strategic crop status like tobacco.
Sugar cane, just like tobacco, earns the country millions of dollars in hard currency through sugar exports to the EU.
Currently, out-grower farmers and the country’s sole sugar miller Tongaat Huletts Zimbabwe, which owns mills at Hippo Valley and Triangle, are entangled in a raging dispute over prohibitive milling charges commonly referred as Division of Proceeds (DOP).
Tongaat, with approval from the Ministry of Industry, Commerce and Enterprise Development hiked milling charges from 17,35 per cent to 23 percent sparking an outcry from out-growers facing bankruptcy.
The plight of farmers was further worsened by Tongaat’s move to recover an estimated $15 million from the latter in DOP deductions backdated to 2014.
Industry,Commerce and Enterprise Development Minister Dr Mike Bimha last week said Government was committed to address challenges in the sugar industry.
In a letter dated to various cane farmers association dated June 5, who had petitioned his ministry over the sensitive DOP issue, Dr Bimha said Government was keen to see long-term stability and sustainability in the country’s sugar industry.
“In addition to DOP issues, The Ministry (Industry,Commerce) is also looking at the future Sugar Industry Development Strategy with the Ministry of Lands, Agriculture ad Rural Resettlement and all stakeholders,’’ he said.
“The strategy will holistically address challenges affecting the industry in the medium to long term. As previously highlighted, the envisaged interventions include among others, increasing the capacity and productivity of small scale sugar cane growers and facilitating sugar cane farmers to procure a sugar milling plant.’’
Dr Bimha conceded the need for stability in the sugar industry, the mainstay of Masvingo’s economy.
Tongaat is the single largest employer in the province with over 21 000 employees while out-growers employ thousands additional workers who work on the estimated 17 000 hectares that they grow sugar cane.
Dr Bimha said Government was working flat out to bring finality in the DOP stand-off to make sure both Tongaat and cane out-growers benefit.
Cane farmers also want Tongaat to have a milling agreement with them so that they benefit from other sugar cane by-products like ethanol and electricity.
The farmers have been operating without a milling agreement with Tongaat which made payment of by-products and other benefits hard to get.
Tongaat also wants Government’s nod to develop 4 000ha of new cane fields on state land under a project dubbed Kilimanjaro.