Urgent efforts needed to save South Africa's sugar industry - Proudly SA

The colossal purchasing power of consumers, the public and private sector, is the only saving grace that can salvage thousands of jobs that will be potentially lost by the local sugar industry, which is buckling under the flurry of cheap imports.

Simmering concerns about the influx of cheap sugar imports onto South African shores are not unfounded. South African Cane Growers Association recently reported that for every ton of foreign sugar sold in South Africa, the local industry loses R7 600. Considering the drop in local sugar sales this year of 100 000 tonnes, this equates to a loss of more than R760 million to the local sugar industry!

Industry figures compiled by the Department of Trade, Industry and Competition (dtic) also attest to the dire state the industry finds itself in. The department reports that annual sugar production in South Africa has declined by nearly 25%, from 2.75 million to 2.1 million tons per annum over the past 20 years. The number of sugarcane farmers has decreased by 60% during the same period, while sugar industry-related jobs are estimated to have slumped by 45%.

The number of people adversely impacted by the deluge of sugar imports affects the livelihoods of 24 000 small-scale and 1 200 large-scale sugarcane growers and puts on the line an estimated 65 000 direct jobs and an additional 270 000 indirect jobs in the downstream. Putting this into perspective, the sugar industry sustains an estimated one million livelihoods, mostly in the most remote rural areas, where income from the industry is often the primary and only available income source other than social grants.

So, what can be done to stem this rising tide and pull the industry back from the precipice of collapse? The dtic has formulated the Sugarcane Value-Chain Master Plan which maps out interventions that should be implemented until 2030, which entails assisting companies to improve their industrial capacities and sophistication, focusing more on export orientation, and reclaiming domestic market space lost to imports.

“The Master Plan will be action-oriented, implemented through working with business and labour and implemented in stages, so that we can move immediately. Government will engage the sugar industry to address its challenges, related to a combination of imports and lower demand,” the erstwhile dtic Minister Ebrahim Patel declared.

As an advocacy body that lobbies consumers, businesses, and the state to support local enterprises and producers to stimulate job creation, we fervently believe that the public and private sector can do more by leveraging their procurement processes to curtail the decimation of an industry that contributes 9.4% to the national GDP, which eclipses the input of the mining sector which was once the mainstay of South Africa’s economy.

We, therefore, call upon all role players that have a material level of consumption – be they industrial users such as beverage manufacturers and public institutions like hospitals, government departments and offices, schools, and correctional facilities - to throw a lifeline to the local sugar industry by being intentional about supporting the local sugar industry through procuring and using locally manufactured sugar and sugar products.

We implore the public sector to start imposing localisation and local content threshold conditions in their tender processes by making it mandatory that preferred bidders who are awarded government tenders to supply sugar products to public facilities, source their products locally and bolster the sugar industry in the process.

We are mindful that the inclusion of localisation conditions in the procurement process may prove cumbersome and time-consuming for procurement professionals who adjudicate over the selection processes; however, the fortunes of the industry and the livelihoods of millions of people hinge on the inclusion of this additional criteria.

The importance of saving livelihoods and salvaging jobs is invaluable and cannot be quantified either in monetary terms or in time. The sugar industry is an integral part of the economies of Kwa-Zulu Natal and Mpumalanga, and an essential part of the social fabric in these communities.

We cannot afford the luxury of watching helplessly as this important sector is pummeled to the ground. The industry is too big to fail.

Eustace Mashimbye is the CEO of Proudly SA

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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