Not So Sweet: Problems in the Sugar Industry

MORE SUGARCANE NEEDED. The most immediate issue confronting the industry, according to Fiji Sugar Corp CEO Deo Saran is to increase cane production to meet the mills’ output.  the current crop only accounts for 50% of the cane required to optimize mill efficiencies. Measures being undertaken by the FSC and Government to address this problem include:
1) FSC cost-cutting and generation of supplementary revenue;  
2) addressing land issues through the Land Reform Program and the efforts of the Committee for Better Utilization of Land;
3) a Government grant of $6 million towards land preparation for the 2010 planting season which has a target of 6,000 hectares;  
4) a $19.6 million Government-subsidy to the South Pacific Fertilizers over the last two years to enable farmers get cheaper fertilizer;
5) and a major cane rehabilitation programme  over the next two years. The 2010 planting program should see an increase of around 75% over the previous year, but this will still not meet the mills requirements.

Opinion. An industry that was once Fiji's major employer and export earner has been run down due to mismanagement, lack of mill maintenance and upgrading (see story below), but most of all by ethnic Fijians listening to their former political leaders and not renewing expiring leases, and mainly Indo-Fijian leaseholders leaving the land because of expired leases, insecurity, and poor returns. One estimate put typical farmer net incomes at $60 a week, well below Fiji's poverty line. Many smallholdings are too small for efficient, profitable and sustainable farming.

SADA REDDY CALLS FOR LARGE SCALE SUGAR FARMING. Large scale commercial cane farming must be explored and developed in Fiji. Speaking recently at the Fiji Institute of Accountants Congress at the Shangri La Fijian Resort, the Reserve Bank Governor said this is one area of the reforms that is needed urgently to help the ailing sugar industry.

The industry has been plagued with ongoing problems, and now contributes only around 3% of real GDP. Ten to fifteen years ago it was 11-12%. The peak year of 1994,saw 500,000 tonnes of sugar produced.Last year it was 168,000 tonnes, the lowest since 1961. They have to rehabilitate large number of cane farms which are producing well below industry norms due to neglect of farms and long rationing rather than planting new cane every three to four years. “Productivity must be improved through farm rationalization plus good farm husbandry practices” he added. The mills also require urgent attention.

Reddy said the Fiji Sugar Corporation’s financial problems have to be quickly fixed as its cash flow situation is dire. The industry, he said, needs to put in strategies to increase cane production to two or three times the current production in the next 24 months. And for this they need land and financial support.

LAUTOKA MILL PROBLEMS AGAIN.  A Votualevu farmer took his 140 tonnes of sugar cane from the the Lautoka mill, that was again experiencing  "mechanical problems," to the Penang Mill at Rakiraki last week.That's an unwelcome extra 130 km round trip  away. Part of the withheld EU money was intended to update Fiji's "archaic" mills.