Photo: FW Archive
The funding was deemed critical as the industry continued to face a crisis in the milling sector and cane growers tried to recover from the financial shocks of the last season, according to the South African Cane Growers’ Association (SA Canegrowers).
Small-scale sugar cane growers were particularly hard hit by the decisions of the business rescue practitioners at the Tongaat Hulett and Gledhow sugar mills in KwaZulu-Natal to default on financial obligations to the industry totalling R15 billion.
According to SA Canegrowers chairperson Andrew Russell, R60 million in transformation intervention funding was already paid out at the end of July, together with the payments for sugar cane delivered in June. The industry has budgeted R125 million for black and small-scale growers delivering fewer than 1 800t of cane in the 2023/24 season.
A further R50 million would be paid out in November this year, with the balance to be paid out in January 2024. Another R51 million had also been budgeted for black growers and joint ventures, predominantly land reform growers, delivering more than 1 800t of cane.
“SA Canegrowers is committed to the survival of the industry and to supporting the industry’s most vulnerable small-scale and black growers. We will continue to work with our industry partners through the South African Sugar Association to protect the one million livelihoods the industry supports,” Russell said.
Speaking about the state of the Tongaat Hulett and Gledhow sugar mills, Russell said: “Notwithstanding the unresolved matter of the 2022/23 financial obligations, the business rescue processes at both mills appear to be progressing.”
Last week, the business rescue practitioners at Tongaat Hulett announced the selection of strategic equity partner Kagera Sugar to help save the milling giant’s South African operations. While SA Canegrowers welcomed this announcement, Russell said it remained to be seen what the final arrangements for Tongaat Hulett would be, and whether this could save the sugar cane operations that were so vital to local economies on the north coast of KwaZulu-Natal.
“In light of these challenges, the funding disbursed in July is vital to sustain growers in the interim. It will provide critical support in an environment marked by rising debt servicing costs and high input costs. This is especially important for small-scale growers, who face the greatest challenge in accessing operating and capital finance,” Russell said.
In a statement, the South African Farmers’ Development Association (SAFDA) welcomed the announcement of the funding. “We welcome and appreciate what has been agreed upon for disbursement during this challenging time when farmers are facing escalating farming costs and anxieties about the future direction of the industry.”
SAFDA also said that the Sugar Master Plan had recognised the vital role of small-scale farmers in the sugar industry, so it was paramount that efforts to support and empower these farmers continued as it would be essential for the long-term success of the sugar industry in South Africa.
Stanger sugar cane farmer Manivasagen Pillay welcomed the funding, saying it would help him and many of his colleagues.
“We are constantly worried about being paid. We have employees to think about and our own families. This is our livelihoods, so this move by the association is indeed welcome and much needed. We hope to see more such interventions in the future.”
