Sucre Ethique - South Africa : Sugar cane farmers send out distress signal

Business report - jeudi 7 octobre 2010

Sugar cane farmers who are facing the worst drought in 15 years may not have sufficient reserves to fund the replanting of cane, a concern that has prompted the SA Canegrowers Association to approach the Land Bank for help.

Suresh Naidoo, the chairman of SA Canegrowers’ Association, said this week there were large areas in KwaZulu-Natal, particularly along the coast, where there was evidence of cane root mortality.

"Large areas of sugarcane will need to be replanted," said Naidoo. But given the losses cane growers will incur this season due to the drought "I am not sure if they will have sufficient reserves to fund replanting", he added.

Naidoo said the association had been in discussions with the Land Bank on long-term production loans at reduced interest rates. But concessions on interest rates was a decision that the national government had to make and the industry would need to meet with the Department of Agriculture to take this up.

MK Sizwe, the head of retail operations at the Land Bank, said drought had affected a whole swathe of people, mostly in KwaZulu-Natal. Discussions with cane growers and the SA Sugar Association (Sasa) were focused on drought relief through grant funding.
However, disbursements of drought relief funds can only be done on instructions from the department.

Naidoo said some growers would need to do ratoon management, which involved fertilising and applying herbicide for a new crop, but given the drought farmers would have limited financial resources to do this.

Sizwe said Sasa and canegrowers wanted concessions on the interest rate so farmers would only have to repay the capital. The department could agree to offset the interest payments from the drought relief fund. "On both options we need the department’s go ahead," said Sizwe.

He added that no conclusion had been reached, but the Land Bank would assist these organisations in their engagement with the government.

According to Sasa’s website, there are about 35 300 registered sugar cane growers, of which more than 33 700 are small-scale growers.

Last season 14 445 small-scale growers delivered cane, producing 8.4 percent of the total crop. There are approximately 1 570 large-scale growers, including 385 black emerging farmers, who produce 85.1 percent of total sugar cane production. Milling companies with their own sugar estates produce 6.5 percent of the crop.