Sugar industry regulation under review by DTI to ensure broad-based representation
The Department of Trade and Industry is reviewing the regulation of the sugar industry to ensure the South African Farmers Development Association (Safda), which represents black cane growers that have benefited from land reform, are recognised independently as a legitimate association of cane growers within the sugar industry.
The aim is to ensure broad-based representation in the industry, improved competitiveness, and to promote transformation and inclusive growth. The review follows complaints by Safda to the department and Parliament’s trade and industry committee that it is not adequately represented within the industry.
The South African Cane Growers’ Association (Sacga) says it has been trying to incorporate Safda under its umbrella so there is one association representing cane growers of all race groups, but Safda insists it wants to be an independent member of the South African Sugar Association’s (Sasa) council. The council has a 50/50 representation of Sacga and the South African Sugar Millers’ Association, and Sacga argues that this dispensation will be disrupted if Safda is introduced as a separate member representing a group of cane growers.
In a briefing to the committee on Friday, the department’s director-general Lionel October said the proposed amendments under consideration would include an amendment of the Sugar Industry Agreement and the Sasa constitution. The amendments would ensure Safda and other grower associations were recognised by Sasa "as legitimate member associations in cane growing".
"In accordance with the new amended regulation, Sasa will also ensure access of levies to Safda and others in support of their operations," October told MPs. Safda has asked Sasa to refund the levies paid by statute by its members to Sacga. Sasa executives told the committee that its attempts to mediate a solution between Sacga and Safda had been unsuccessful and it was consulting its members on the department’s proposed legislative proposals.
October told MPs he had informed Sacga that it could not be the sole representative of cane growers, which would mean that it received 100% of the levies imposed on cane growers by statute. The department was awaiting a legal opinion on the risk of litigation if it proceeded with the amendments, which were necessary as it was unacceptable to allow the status quo to continue as it only recognised one association representing mainly white cane growers, which had a monopoly over the industry.
"We are very determined that if we don’t get the co-operation from the players to amend their own constitution, we will impose a solution," October emphasised. "We will get the minister to withdraw the regulation of Sasa and take away its old constitution, which only recognises one association, and impose a new constitution. "
If attempts were made to frustrate these changes, the department would fast-track the necessary legislative changes through Parliament to provide for the recognition of several associations.
October said the department had tried to get the disputing parties to agree on a representative solution but this had failed so it took the dispute to top mediator and lawyer Charles Nupen, who failed in his first attempt, but succeeded in getting an agreement between Safda and Sacga in his second attempt. However, Sacga then came back to the department last year and said it did not accept the agreement.
If it was not able to form one association, the cane-growing industry would have to be split on a 50/50 basis during an interim period with the long-term aim of getting the two associations to combine into one representative federation.
Sacga argued in its submission that breaking down cane growers into separate groups would destroy their bargaining position, which would decimate small-scale, black cane growers. The association also pointed to the various initiatives it has under way to assist small-scale cane growers.