Picture: 123RF/ocusfocus
Picture: 123RF/ocusfocus

The department of trade and industry is forging ahead with its plans to review the regulation of the sugar industry, in a bid to grant black cane growers who have benefited from land reform more recognition.

The South African sugar industry generates an average direct income of about R8bn a year and is responsible for at least 80,000 direct jobs. Indirect employment is estimated at 350,000.

In a recent government gazette, trade and industry minister Rob Davies said that the department was reviewing the regulation of the sugar industry to address the recognition of alternative associations such as the South African Farmers Development Association (Safda), which represents black cane growers. The act being amended is the Sugar Act of 1978 and the Sugar Industry Agreement of 2000.

The aim is to ensure broad-based representation in the industry, improved competitiveness, and to promote transformation and inclusive growth, Davies said.

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) continues to represent more than 50% of black growers in SA. According to the association, the majority of black cane growers already have representation and support to the tune of R172m set aside for transformation initiatives this year alone, with a further R1bn earmarked to entrench these programmes.

“In addition, the industry stakeholders are engaging on a process of developing a five-year transformation plan. However, transformation in the industry started long before this,” the association said.

“Representation at South African Cane Growers since 1992 has always guaranteed black growers at least 50% of the seats on its congress. Small-scale farmers have also been paid a preferential price (funded by larger farmers) and received training, business and legislative support and assistance subsidised by their commercial counterparts.”

Sacga has previously stated that it has been trying to incorporate Safda under its umbrella so there is one association representing cane growers of all race groups, but Safda insisted it wants to be an independent member of the South African Sugar Association’s (Sasa) council. Sacga said its view had changed, and by end 2017 it had signed a provisional agreement acknowledging Safda as an independent body, and facilitated payment of R19m to assist with their development.

Sacga vice-chair Rex Talmage said his association has always served small-scale and land-reform farmers and continues to represent most developing growers.

“Resources, which include funding, training opportunities and programmes, and skills development, are available to these growers in all milling areas. These services offered by [Sacga] are subsidised by commercial growers to the tune of millions of rands, and form part of our numerous transformation efforts,” said Talmage.

The department has said previously that in terms of the amended regulations, Sasa will also ensure access of levies to Safda and others in support of their operations.

In 2017, the department 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. Sacga has argued 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 had under way to assist small-scale cane growers.

The department published transitional provisions in the government gazette last week. According to the provisions, Sacga and Safda will collectively comprise the growers’ section.

“After consultation with the association, the minister may amend the transitional provisions, by publishing notice of the amendments in the government gazette … [the] transitional period means from April 1 2018 until March 31 2020 or any later date determined in terms of clause 15.4 of Sasa’s constitution,” the notice reads.

According to Sasa, the cane-growing sector comprises approximately 22,500 registered sugarcane growers farming predominantly in KwaZulu-Natal, with a substantial investment in Mpumalanga and some farming operations in the Eastern Cape.

Sugar is manufactured by six milling companies with 14 sugar mills operating in these cane-growing regions. The industry produces an estimated average of 2.2-million tons of sugar per season. About 60% of this sugar is marketed in the Southern African Customs Union. The remainder is exported to markets in Africa, Asia and the Middle East.

With Linda Ensor

Correction: October 17, 2018

An earlier version of this story indicated the Sacga was currently trying to incorporate Safda under its umbrella. The story has been corrected to reflect Sacga’s latest position on the issue

phakathib@businesslive.co.za