AGRICULTURE NEWS - The South African sugar industry is facing a crisis, and the South African Cane Growers’ Association warns that this R14 billion/ year industry is in danger of “imminent collapse, putting 350 000 jobs at risk”.
It warns that urgent interventions, including increasing the dollar-based reference price on imported sugar from US$680/t (about R9 570/t) to US$856/t (R12 050/t), is needed to remedy the situation.
In recent years, the profitability of primary producers and the global competitiveness of South Africa’s sugar production has been eroded by a number of issues.
The most notable challenges have been substantial increases in farmworker wages and electricity costs, drought, the implementation of the sugar tax, slow adoption of mechanisation, ineffective implementation and management of price protection measures to provide a buffer against cheap sugar imports, and government’s lukewarm to stone-cold sentiment towards supporting the establishment of a local biofuels industry.
This crisis poses an important question, namely whether we should not just step aside and let the free market system do what it is destined to do.