Cape Town - The announcement made by Minister Enoch Godongwana that there will be a 12-month delay on the increase of the new sugar tax is welcome news for the sugar industry.
Following the first year of its implementation, the sugar tax cost a total of R2.05 billion and cost South Africa over 16 000 jobs. The increase would have seen sugar go from 2.21 cents to 2.31 cents per gram.
Thomas Funke, CEO of SA Canegrowers, said sugar growers would not have been able to withstand the extra burdens due to the increase in fuel and fertiliser prices in the last year.
He said the delay will help the industry find solutions to work on its engagement strategy and cited the Sugar Cane Master Value Plan as a key contributor to protecting livelihoods and jobs in the industry.
“The delay will now give the industry much-needed time to engage the government on the long-term implications of the tax for the industry. This is the only way to stop the industry’s decline and ensure that the industry can successfully implement the Sugarcane Value Chain Masterplan, saving the one million livelihoods the industry supports,” Funke said.
Marnus Gouse, senior researcher and operational manager for the Bureau of Food and Agricultural Policy (BFAP), says they’ve worked closely with different companies in the sugar industry by running scenarios on how cane production and employment is affected by local and international supply demands.
He added that fewer demand leads to lower farm production and therefore less employment too.
This Masterplan for the South African Sugarcane Value-chain is the result of a process of extensive engagement and consultation among sugar industry stakeholders and the social partners, particularly small and large cane growers, millers and refiners, retailers and industrial users of sugar and sugar-derived products as well as workers and government, all working together to find the best solution going forward.