Sugar industry players have taken the issue of sugar tax to Parliament as thousands of livelihoods continue to hang in the balance.
Smallholder farmers, workers and sugar industry representatives, through the Taking Parliament to the People (TPTTP) program, this week took their concerns directly to Members of Parliament (MPs) and Ministers.
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MPs “recognise” the concerns
TPTTP, an initiative of the National Council of Provinces, allows citizens to interact directly with ministers and deputies.
Those who invested in the sugar industry addressed the challenges facing the agricultural sector, particularly on the South Coast of KwaZulu-Natal.
Sugar Association of South Africa (Sasa) chief executive Trix Trikam explained that the role players were looking for a “fair and just transition” regarding the sugar tax, also known as Tax for the promotion of health (HPL).
“Our main request is that the sugar tax should not be increased for at least three years, and that there should be no lowering of the current threshold while we look for diversification opportunities – through the master plan process – to guarantee the sustainability of the industry”. Trikam said in a statement.
“We are not looking for outright bailouts. In line with the approach being followed in other sectors nationally, we are looking for an opportunity to achieve a fair and just transition in the sugar sector.”
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The sugar tax affects the industry
He said that the industry has been greatly affected by the implementation of HPL in 2018.
The industry has lost more than 8 billion rupees in revenue, almost 10,000 jobs have been lost and two factories have had to close.
Trikam said the HPL was “exacerbating the already dire financial situation of the sector”.
Through the TPTTP, Trikam said the “serious problems” facing the industry were recognized by the Deputy Minister of Trade, Industry and Competition, Fikile Majola.
He said Majola agreed with the views expressed “that HPL has had a detrimental impact on the industry since its introduction in April 2018”.
“We are further encouraged by their commitment to work with the National Treasury and the Department of Health on the issue.”
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Tongaat Hulett Business Rescue
Sugarcane growers are currently under severe strain after Tongaat Hulett Limited (THL) opted for voluntary business rescue last month, putting more than 14,000 jobs at risk.
THL said two of its operations will be placed under commercial rescue.
In recent years, the company has been rocked by allegations of mismanagement and financial improprieties, and is currently R6.3 billion in debt.
Tongaat said its debt levels remained well above what could be serviced and delays in its recapitalization had made the situation worse.
THL and business rescue professionals earlier this month missed a deadline to pay growers for sugar cane delivered to mills in Felixton, Amatikulu and Maidstone in KwaZulu-Natal in September. The amount owed to producers runs into millions.
SA Canegrowers president Andrew Russell said this included about 4,300 growers, who last month delivered almost 600,000 tonnes of sugar cane to various THL factories.
More than R400 million was due by the end of October.
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