SA unrest: Aftermath threatens thousands of sugar industry jobs

Recent unrest that uprooted parts of KwaZulu-Natal and Gauteng last month wreaked an immense amount of economic havoc, particularly in the sugar industry, with South African cane growers in a statement on Tuesday voicing their concern of the impact the chaos had on their lifeblood.

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The South African Canegrowers Association has written to government to request that immediate financial relief be paid to growers, especially small-scale ones. 

“The extent of the damage becomes clearer by the day, there are now thousands of precious rural jobs… at risk.”

Small-scale growers facing financial ruin

500,000 tonnes of cane was burnt in arson attacks associated with the attempted insurrection.

When the riots were ongoing, the association estimated potential damage to cane growers to amount to R300 million if mills could not crush the hundreds of thousands of tonnes of destroyed cane.

The sector’s fears were realised, with KZN mills rejecting 135,222 tons of damaged cane so far, amounting to R84.5 million. 

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Almost a third of the 500,000 tonnes of destroyed cane belongs to small-scale growers, many of which will not be able to recover from financial losses. 

Small-scale growers also do not have any form of insurance. 

The South African Canegrowers Association said many are awaiting relief from Grocane, a fire insurance cooperative, as well as from the South African Special Risk Insurance Association.

However, small-scale growers were told that any cane burnt before mill closures during the riots would not be covered by either association. This despite many mills only closing after a large amount of cane had already been destroyed. 

These growers also stand to lose industry transformation benefits as well, which are linked to the tonnage of cane delivered. 

Sub-standard mills and droughts

The SA Canegrowers Association explained that sub-standard performances of some mills are “exacerbating grower losses” even further. 

The association said it expected losses to continue while mills continue to fail processing burnt cane fast enough. 

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Severe droughts which have gripped many provinces has further pushed the industry to the edge, as well as sugar tax, increases in cheap sugar. 

Urgent intervention needed 

“To reduce the impact on the growers and communities that rely on the industry for their livelihoods, urgent intervention is required from government, including financial relief, which will allow growers to stay afloat, maintain operations and retain workers as the sector works to rebuild itself,” the association said. 

The association has written to the Department of Trade, Industry and Competition, the National Agriculture Marketing Council, the Industrial Development Corporation’s (IDC) agro funding unit, and the Parliamentary Portfolio Committee on agriculture, land reform and rural development. 

Appreciative of some engagement with stakeholders, the association reported that oversight visits were conducted by the portfolio committee last week, and that the IDC had met with them to discuss possible bridging finance for growers most affected by the unrest. 

However, for the industry to have any hope of limping away from the latest in a series of setbacks, it needs to look after both major and small-scale growers, protect assets and keep jobs.

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Compiled by Nica Richards