The South African Farmers Development Association (Safda) this week welcomed the extension of a sugar industry funding programme for small-scale and black growers but said floods and other problems meant the R239m was not enough.
Over the past five years, the South African Sugar Association (Sasa), a statutory body representing cane growers and millers, has channelled a total of about R1bn into funding small-scale farmers as part of the first phase of the sugar master plan that was launched in 2019.
Among other things, the plan was aimed at increasing local production and sales and transforming the industry. Phase 1 ended in March, and discussions are under way about implementing phase 2.
The initial five-year Sasa funding programme for previously disadvantaged farmers ended with the 2023/2024 season, and its renewal was held up by disagreement between Safda and SA Canegrowers, which both fall under the Sasa umbrella.
Safda accused SA Canegrowers of adopting “disturbing tendencies” to block transformation funding meant to benefit black small-scale farmers after SA Canegrowers expressed concern over how the money would be distributed.
Earlier this month Sasa — which is itself financed by sugar sales — announced the conflict had been resolved and R238.9m would be made available this crop year for black and small-scale growers.
Our leaders have engaged in mature negotiations with their counterparts at SA Canegrowers. We have reason to believe that they understand the realities of black farmers in this industry and are committed to making a difference
— Siyabonga Madlala, executive chair of Safda
Siyabonga Madlala, executive chair of Safda, told Business Times that his association was pleased that the two grower organisations had reached accord.
“These payouts come at a time when they are most needed by these farmers. Farmers in our sector are paid according to cane deliveries depending on the length of the growing season as per the bioclimatic characteristics of their regions.”
However, he said Safda did not believe that the R238.9m was sufficient to meet transformation goals as many farmers were still recovering from the devastation of recent floods in KwaZulu-Natal. Another hazard was having their cane plantations set on fire by vandals.
“Our leaders have engaged in mature negotiations with their counterparts at SA Canegrowers. We have reason to believe that they understand the realities of black farmers in this industry and are committed to making a difference.”
He said about 55% of 22,000 registered sugar cane farmers were small-scale growers.
“Most of our small-scale farmers use this money to purchase farm inputs to increase their productivity. With the global conflicts that affect fertiliser and fuel prices, the transformation interventions provide a cushion for otherwise unaffordable farming inputs.”
Safda said in a recent statement that it was formed in 2015 when black farmers left SA Canegrowers because of its “oppressive colonial legacy” and accused it of representing the beneficiaries of land dispossessions. SA Canegrowers wanted to keep black farmers as underdogs in the industry, Safda said.
SA Canegrowers chair Higgins Mdluli said the organisation rejected Safda’s accusations as “derogatory and insulting”.
He said Sasa, as the regulator of the industry established under the Sugar Act, had asked industry members to propose two ways to manage the 2024/2025 transformation funding.
“One was a continued direct payment to small-scale growers when they deliver cane, and another was to allocate a portion of the money to local projects to improve farming outcomes.”
He said there was a proposal for a different proportional allocation of funding between direct payments and regional projects, which would have meant that regional projects received a bigger allocation in this cycle of funding.
“Agreement has been reached on how best to allocate the funding. Projects were proposed and will continue to help growers become more sustainable and profitable in the medium-to-long term,” Mdluli said.
“Each area has different environmental and farming challenges, and therefore regional projects can ensure that growers solve or address local problems. Examples of regional projects include enabling access to seed, upgrading infrastructure, improving access to financing, improvement of farming operations, and better access to data and information.”
He said SA Canegrowers believed specific interventions ran less risk “of being intercepted by third parties”, ensuring funds would be spent in an accountable and transparent manner with measurable outcomes.
Cane tonnages delivered by small-scale growers could be vastly improved through a regional approach, adding 20%-30% extra revenue to the bottom line of these growers, Mdluli said.
Sasa chair Fay Mukaddam said for the past five years, the transformation plan had spent R200m a year on helping black sugar cane growers, especially small-scale growers, and the extension of transformation funding would continue to help small-scale growers and black growers.
“In terms of the current season, the largest portion of the funding is allocated to cane delivery-based interventions, where black growers, who deliver cane, benefit from an estimated R170m per annum.”
Mukaddam said in the 2023/2024 financial year, the assistance reached 15,752 growers while allocations of R20.5m to 166 growers helped to increase cane production.
“This grant was paid directly into the growers’ loan accounts to decrease the amount owing to the financial institution.”
She said Sasa would leverage phase 2 of the master plan to achieve the objectives of its strategy. The termination or reduction of transformation support would be a blow to recipients, but the industry was holding discussions regarding future funding.
A recent Sasa statement said that during the five-year plan small-scale growers had received at least R60m of “premium price payment” a year for three years, and in the latest 2023/2024 season the amount had reached R68m.
Discussing phase 2 of the master plan, Sasa said that to maintain the phase 1 momentum, the next phase must be “premised on pillars which speak to a heightened commitment by all stakeholders to purchase local sugar, strategic trade protection, progress initiatives/interventions aimed at ensuring the sustainability and retention of small-scale growers, accelerate diversification efforts and create food policy certainty”.
The association said the sugar tax remains “one of the serious challenges which are inimical to the envisaged growth of the sector”.
The industry was exploring new products to diversify into, including sustainable aviation fuel, polylactic acid and others.
However, these opportunities would need enabling policy and legislative frameworks. “Therefore, government and parliament remain important partners to ensure the sustainability of the industry,” Sasa said.
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