In a first-of-its-kind historic meeting between the Premier of Mpumalanga and all senior leaders in South Africa’s sugarcane value chain, the Premier committed his provincial government’s support to help this essential agricultural sector survive the various challenges it is dealing with.
By Lloyd Phillips, senior journalist at African Farming and Landbouweekblad
Mpumalanga and KwaZulu-Natal are the only two of South Africa’s nine provinces that collectively grow the approximately 17 million tonnes of sugarcane that directly and indirectly support one million livelihoods. Since 1994, the sugarcane value chain has undergone significant transformation. From a base of 5%, 21% of freehold land under sugarcane has been transferred from white to black owners. There are also many thousands of black sugarcane growers on traditional authority lands.
Although Mpumalanga’s approximately 3.5 to 4 million tonnes of sugarcane delivered annually for milling is 21% to 24% of the national total, the revenue of about R5.5 billion that it generates is essential for the provincial economy.
The 350 000 tonnes of sugarcane produced by Mpumalanga’s black sugarcane growers in 2012 has almost doubled to 600 000 tonnes this year.
All Mpumalanga’s sugarcane is delivered to RCL Foods’ Malelane and Komati sugar mills. A total of 71% of the land under sugarcane in the province’s Nkomazi area between the two mills is black owned, whether individually, co-operatively or in joint ventures with RCL Foods.
Trik Trikam is the former long-time executive director of the South African Sugar Association, and is now the association’s vice-chairperson. During the meeting with Mpumalanga’s political leadership, he highlighted how the sugarcane value chain is crucial for this province’s socioeconomic development, especially in rural areas.
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Macro and Micro Impacts at Field Level
However, it too is being buffeted by the many headwinds that South Africa’s entire sugarcane value chain is experiencing while simultaneously trying to secure its sustainable future promised by the “all-important” South African Sugar Value Chain Master Plan 2030.
Trikam cites examples such as the health promotion levy (sugar tax) and the surge in South Africa’s imports of dumped sugar, while America’s Trump administration is levying 30% import tariffs on South African sugar.
“We are continuing with our endeavours to convince the Treasury and the national government to officially put any sugar tax in abeyance until 2030, when the master plan is set to expire.
“To arrest [the imports of dumped sugar], the industry has applied for an increase to the tariff, or Dollar-based reference price, from US$680 per tonne to US$905 per tonne. The envisaged tariff level will provide the industry with adequate protection from sugar imports that are displacing locally produced sugar [onto generally loss-making world sugar markets].”
RCL Foods echoed Trikam’s concerns. However, it added that further “critical” direct threats to Mpumalanga’s sugarcane growers, especially developing or smaller-scale growers, include electricity prices for irrigation having “surged by 82% over the past five years” and that only 15% of the Crocodile River’s water is stored in dams.
“Limited water storage and a growing population restrict irrigation of the Nkomazi area’s most productive agricultural land. This underscores the importance of the Mountain View and Strathmore [dams] projects to enhance water capacity along the Crocodile River.”
Mandla Ndlovu, the Premier of Mpumalanga, agreed that his province’s livelihoods, communities and local economies “rely heavily” on the sugarcane value chain’s resilience.
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Commitment to Build on Existing Advantages
“We have competitive advantages stemming from our proximity to mills … and an experienced base of both commercial and smallholder sugarcane growers.
“As the provincial government, we recognise how important the sugar industry is to our [own] agricultural master plan and to the Mpumalanga Economic Reconstruction and Recovery Plan. We are committed to supporting this vital sector and helping it thrive for the benefit of our community.”
Ndlovu said this support will include investments in infrastructure such as rehabilitating irrigation and access roads, financial and technical support for smallholder growers, land reform support to integrate new entrants into established value chains, skills development and training, and research partnerships to promote climate-smart and water-efficient sugarcane farming.
“The health promotion levy affects us directly. Therefore, we will pay special attention to this matter. I have heard you also noting the issue of sugar imports that pose a threat to the industry. Indeed, we will focus on these and engage with our national counterparts.
“Let this engagement serve as a platform for innovation, collaboration and renewal, whereby we foster the development of sustainable solutions that ensure our sugar industry remains globally competitive, locally inclusive and environmentally responsible.”
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