South Africa’s sugar cane growers are breathing a sigh of relief as they receive much-needed financing from the South African Sugar Association (SASA) amid the ongoing crisis in the milling sector and the aftermath of last season’s financial shocks. In a timely intervention, SASA has disbursed R60-million in transformation funding, specifically aimed at supporting black and small-scale growers in the industry.
Chairperson of industry organization SA Canegrowers, Andrew Russell, expressed gratitude for the funding, highlighting its critical importance during these challenging times. The funds come as a lifeline, providing vital support to growers grappling with rising debt servicing costs and soaring input expenses. Small-scale growers, in particular, are facing the greatest hurdles in accessing operational and capital finance, making this initiative all the more essential for their survival.
For the 2023/2024 season, the industry has allocated a total of R125-million to support black and small-scale growers delivering less than 1,800 tonnes of cane. Out of this budget, R60-million will be disbursed at the end of July 2023, alongside payments for cane delivered in June 2023. A further R50-million will be released in November 2023, followed by the remaining balance in January 2024.
Additionally, R51-million has been set aside to support black growers and joint ventures delivering more than 1,800 tonnes of cane, with a focus on predominantly land reform growers.
The financial challenges faced by the industry were exacerbated by the business rescue practitioners’ decision at the Tongaat Hulett and Gledhow sugar mills to default on financial obligations, amounting to a staggering R1.5-billion. This led to a reduction of more than R400 per tonne in the final recoverable value price of sugar for the season. Unfortunately, this had a severe impact on small-scale growers, leaving them in a vulnerable position.
However, Russell reassured that legal action regarding this matter is ongoing, and SA Canegrowers continues to advocate for the survival of the industry and support its most vulnerable stakeholders, namely small-scale and black growers. The organization, in partnership with SASA, remains committed to preserving the livelihoods of the estimated one million individuals who depend on the sugar cane industry for their well-being.
The news of the equity partner announcement for Tongaat Hulett was met with a sense of optimism by SA Canegrowers, who had been eagerly awaiting a solution for the struggling business. Describing it as “an important step forward,” they remain hopeful that this development will contribute to safeguarding the sugarcane operations that play a vital role in sustaining local economies along the North Coast of KwaZulu-Natal.
In conclusion, the transformation intervention funding provided by the South African Sugar Association serves as a lifeline for the cane growers in the country. As they navigate the challenges posed by the milling sector crisis and financial hardships from the previous season, this financial support is crucial for their survival and recovery. By assisting small-scale and black growers, the industry seeks to ensure the sustainability of one million livelihoods dependent on sugar cane cultivation, reaffirming its commitment to weathering these turbulent times.
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