Tongaat hopeful of breakthrough in stand-off with out-growers

LOWVELD sugar producer Tongaat Huletts Zimbabwe has reaffirmed its commitment to creating a viable sugar industry for the country’s benefit and expressed optimism that the current stand-off between the sucrose maker and over 1 200 out-grower farmers over the payment mechanism for cane deliveries in the current milling season will soon be rectified.

Out-grower farmers, who are beneficiaries of the land reform programme, have been singing the blues, with most facing bankruptcy owing to what they said was a skewed payment model by Tongaat.

Commercial cane farmers at Mkwasine, Hippo Valley, Triangle and Mupapa, among other cane-growing blocks in the Lowveld, were being paid for their cane using a Milling Agreement which entails that the farmer owns their milled sugar until it is disposed off in the shops, with Tongaat only providing milling services charged at 27 percent.

Farmers, beginning the impending 2023/24 milling season that was scheduled to start at the beginning April, want to be given a choice between a Milling Agreement and a Cane Purchase Agreement.

The Cane Purchase Agreement entails that out-growers simply sell their sugar cane to Tongaat and get paid once-off an agreed fee per tonne of delivered cane.

The stand-off with Tongaat has resulted in out-growers delaying cane harvesting for the current milling season seeking to press for an agreement first.

Farmers say delays in harvesting by out-growers who account for 45 percent of Zimbabwe’s aggregate sugar cane production will not hurt local supplies as there was a surplus carried over from the prior season which closed on 31 March.

A high-powered ministerial delegation is expected in Chiredzi to try and hammer an agreement between Tongaat and the farmers.

There are also reports farmers were threatening to forcibly close the country’s only two sugar mills at Hippo Valley and Triangle to pave way for talks to strike an agreement.

Tongaat Corporate and Industry Affairs Executive Dr Dahlia Garwe expressed hopes of a breakthrough, dismissing assertions that the Lowveld sugar producer was bent on short-changing out-growers.

He said Tongaat had started harvesting its cane for the new milling season, saying she was optimistic that out-growers will soon follow suit.

“Harvesting of cane has commenced from the miller’s (Tongaat) side and we are looking forward to delivery of cane from the farmers at the beginning of May (this month),” she said. “We are currently in discussions with the farmers regarding a pricing arrangement for cane delivered to the mills.

“We firmly believe in a fair and equitable mechanism to pay the farmers that will allow them to be successful and viable. It is also important to note that farmers play a key role in industry (sugar industry) decisions involving pricing of sugar, with the current chair of the Pricing and Marketing Committee being a competent farmer.

“A viable industry would benefit not only the farmers and the company, but also local communities and the country as a whole. We will continue to uphold the tenets of ethical, fair and professional conduct in business because that is the only way our industry will survive.’’

Dr Garwe said the way forward for the industry was predicated on the outcome of an arbitration process facilitated by Government through the Ministry of Industry and Commerce.

“As indicated above, the millers (Triangle and Hippo Valley) are in discussion with the farmers with the intention of agreeing on a payment mechanism for cane delivered,” she said. “It is important to note that there was an arbitration process that was facilitated by the Ministry of Industry and Commerce that took place.

“The award was only given on 13 April and we are now looking at complying with the terms of the award. ‘We have been approached by farmers with proposals on both a cane milling agreement and a cane purchase agreement. It is our expectation that we will reach an agreement with the farmers on the way forward in the next few weeks.’’

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