National Farmers Union General Body Meeting rejects FSC proposals for Sugar Industry Restructure

(Posted 5th June, 2003, 13.00)

National Farmers Union held its General Body meeting on 31st May 2003 at Tilak Hall in Lautoka.

The meeting was attended by over 3500 canefarmers from all over Fiji - a record attendance.

A wide range of issues affecting the future of the industry was discussed and decided upon in the meeting - see Resolutions at end of this report. Among speakers were the Turaga Tui Ba, Ratu Sairusi Nagagavoka who exhorted farmers to remain united under the NFU banner to fight off the threats posed to their future well being by the FSC and their own organisation the Sugar Cane Growers Council.

National Secretary of the Fiji Trades Union Congress and General Secretary of the Fiji Sugar and General Workers Union, Felix Anthony, who is also a member of the Sugar Industry Restructure Standing Committee appointed to advice the government, informed the meeting that the Committee was unable to reach a consensus on the issue because the proposed restructure plan was prepared solely by the FSC, for the FSC. It had nothing good for the mill employees and the canegrowers. All it sought to do for the employees and the farmers was to attack their jobs and incomes.

NFU General Secretary, Mahendra Chaudhry presented the activities report of the union for 2002/2003 and highlighted the various major issues confronting canefarmers. He called on them to unite to fight for their survival.

The meeting condemned the Chief Executive of the Sugar Cane Growers Council Jagannath Sami, as a stooge of the government and the FSC. Sami has acted consistently against the farmers and promoted FSC's interest ever since he assumed the position of CE-SCGC over two years ago.

Resolutions Adopted by the NFU GBM

1. Sugar Industry Restructure

Canegrowers from all districts of Fiji, attending the General Body meeting of the National Farmers Union, in Lautoka on 31st May, 2003, unanimously resolve to reject the sugar industry restructure proposals formulated by the Fiji Sugar Corporation and warns that any attempt to impose it unilaterally will be strongly resisted by the canegrowers of Fiji under the united banner of the National Farmers Union.

The General Body further resolves that canegrowers will not agree to any proposition that seeks to reduce their share (70%) of the income derived from the sale of sugar, in order to rescue the financially stricken Fiji Sugar Corporation.

The meeting is of the firm view that the current financial crises facing the Fiji Sugar Corporation is of its own making, the primary responsibility for which should rest with its Board of Directors, Chief Executive and senior management.

The meeting invites the attention of the sugar industry institutions to the fact that FSC has in the past made good profits under the existing sugar proceeds sharing formula. In fact, it has run profitably for 22 of its 28 years of existence. The heavy losses it has incurred in the past three years are attributable to mismanagement, abuse, negligence, extravagance, absence of financial discipline and corrupt practices in the operations of the company.

The meeting calls on the government to immediately replace the current Board of Directors, the Chief Executive and senior management of the FSC with persons who are competent and who can return the company to profitability.

2. Cane Quality Payment System

Canegrowers from all districts of Fiji, attending the General Body meeting of the National Farmers Union in Lautoka on 31st May, 2003, unanimously resolve to oppose the introduction of a cane quality payment system as proposed by the Chief Executive of the Sugar Cane Growers Council, Jagannath Sami.

Canegrowers warn that any attempts to impose the system on them will be met with the full force of the National Farmers Union.

The meeting condemned the Chief Executive SCGC for selling out the farmers interest in this matter without consulting or obtaining their mandate at the sector level. The meeting notes that Growers Councillors themselves are not informed about the system and have not held any discussions with the canegrowers to ascertain their views and stand on the proposed payment system.

Canegrowers are of the firm view that a Quality Cane Payment system cannot operate fairly for them unless and until FSC's sugar mills perform to internationally acceptable standards of efficiency.

The current condition and performance of the mills is appalling, resulting in substantial losses to the industry as a whole.

The meeting called for specific provisions to be included in the Master Award to prescribe financial penalties on FSC for inefficient milling operations, based on internationally recognised standards.

3. Rail Transportation System

Canegrowers from all districts of Fiji, attending the General Body meeting of the National Farmers Union in Lautoka on 31st May, 2003, emphasise that the rail system is the best and most economical mode of transportation of cane to the mills.

The meeting noted, however, that over the years the rail transport infrastructure has been run-down by the Fiji Sugar Corporation which has, quite wrongly, embarked on a policy of discouraging rail transportation by deliberately withholding rail trucks and harvest quota from rail gangs and coercing the farmers in these gangs to convert to lorry transport.

The meeting condemns such blackmail tactics of the company and warns that the allocation of rail trucks to rail gangs, the availability of locomotives and maintenance work on the rail transport infrastructure will be closely monitored this season by the National Farmers Union.

The meeting censures the Chief Executive of the Sugar Cane Growers Council, Jagannath Sami, for collaborating with the FSC to compel rail gang growers to convert to lorry gangs and condemns his role in amending the Master Award in the 2001 season, thus giving the company extra leverage on conversion.

The meeting further cautions FSC to ensure that adequate numbers of rail trucks, in fully operational condition, are held at all times to satisfy the allocation requirement of trucks to rails gangs as per harvesting agreement (MOGA).

4. Sugar Export Tax

Canegrowers from all districts of Fiji, attending the General Body meeting of the National Farmers Union in Lautoka on 31st May, 2003, strongly condemn the SDL government for increasing the sugar export tax from 3% to 10% of the export value, effective from 1st January 2003.

Canegrowers note that the increased rate of tax will impose additional burden on them at a time when they are struggling with high production costs and low cane price. In fact, the tax increase means that growers will now be paying between $5 - $6 per tonne of cane, as opposed to $1.50 paid by them when the tax rate was 3%.

Canegrowers have unanimously decided to serve notice on government to rescind the increase and enter into negotiations with the NFU on the future rate of export tax, if any, to be levied on the industry.

The meeting notes that all other exports, except gold, are not subject to tax and there is no reason why the agricultural sector should be taxed while the commercial and industrial sectors are granted privileged treatment.

5. National Harvest Quota

Canegrowers from all districts of Fiji, attending the General Body meeting of the National Farmers Union in Lautoka on 31st May, 2003, unanimously resolve to reject the application of any National Harvest Quota (NHQ) on the 2004 crop. The meeting notes that the Sugar Industry Tribunal has fixed the 2004 NHQ at 75% of the Farm Basic Allotment (FBA) of 4.08 million tonnes. This means that the FSC will only take 3.06 million tonnes in the 2004 season, whereas the actual crop size is expected to be around 3.4 million tonnes. If the harvest quota at 75% of the FBA is applied, it will leave 340,000 tonnes of cane unharvested.

The meeting reiterates the position of the canegrowers that FSC must take all cane as per the FBA allocated to farmers and reminds the Tribunal that in declaring the NHQ as a percentage of the National Basic Allotment (NBA) it (the Tribunal) should carefully examine the FBA issued to each grower and hold the FSC responsible for accepting all cane within the allocated allotment.

The meeting notes that the current FBAs of the individual growers were set many years ago and that changes over the period now require the FBA of each grower to be reassessed and revised. The revised allocation should be made effective three years from the date of its notification to the grower, in order to allow him/her sufficient time to make the necessary adjustments.

6. FSC - SCGC Chief Executive Agreement for 2003 Crushing Season

Canegrowers from all parts of Fiji, attending the General Body Meeting of the National Farmers Union on 31st May 2003 in Lautoka, unanimously resolve to reject an agreement reached between the Chief Executive of the SCGC Jagannath Sami and the Fiji Sugar Corporation on 13th May 2003, in respect of the 2003 crushing season.

The meeting condemns the Chief Executive SCGC for entering into the one-sided agreement, giving FSC an open mandate to terminate crushing arbitrarily at any time by citing commercial reasons for doing so.

The meeting noted that:

• Under this agreement, FSC can decide to terminate crushing after accepting only 60% or even less of the crop and cite commercial reasons for doing so. Farmers will then be left stranded with 40% or more of their crop remaining unharvested for which they may be compensated.
• However, what will be the amount of compensation paid and where will the money for it come from are not a part of the agreement. These matters, quite stunningly, have been left for negotiation at a later date.
  
• Under this sell-out agreement, Jagannath Sami has given FSC an open mandate to do as it pleases. Issues such as the quantum of compensation and its funding arrangements were not settled.
  
• If compensation is to be paid from industry money, as in the past, it will mean that farmers themselves will be paying 70% of the so-called compensation from their own share of the sugar proceeds.
  
• A notable omission from the agreement is the absence of any provision requiring FSC to ensure that its milling and cane transport operations are carried out efficiently. FSC must be held accountable and liable for its negligence and defaults. It must be required to reimburse, from its own share of the sugar proceeds, losses sustained by the growers because of milling inefficiencies.
  
• In the absence of any such requirement, FSC is likely to continue with its bad practices, causing losses of millions to the industry.

Canegrowers further note that Jagannath Sami has been acting unilaterally and against their welfare in many matters since his appointment, beginning with the amendment to Master Award in November 2001 allowing conversion from rail to lorry gangs; supporting the FSC proposals for restructure of the industry; agreeing to the introduction of cane quality payment system, and entering into the sell-out agreement of 13 May 2003.

The meeting, therefore, resolves unanimously to call for the immediate removal of Jagannath Sami as Chief Executive of SCGC for undermining the interests and welfare of the canegrowers and for entering into this sell-out agreement without obtaining the approval of the Sugar Cane Growers Council.

7. Inquiry into SCGC Finances

Canegrowers from all parts of Fiji, attending the General Body Meeting of the National Farmers Union on 31st May 2003 in Lautoka, are deeply concerned about reports of mismanagement, misappropriation and abuse of SCGC funds by its Chief Executive and senior management. They are disturbed by a recent report of misuse of funds by the Council's Administrative Manager, Bhima Sami, and the Chief Executive's decision to treat the amount of the misappropriated funds as personal loan to Bhima Sami.

The meeting regards the action of the Chief Executive in this instance as a possible cover-up of a criminal offence and calls on the Council's auditors and the Sugar Industry Tribunal to institute immediate investigations into the matter and urges the Council to take appropriate disciplinary action against the Chief Executive and the Administrative Manager.

Canegrowers are further concerned about the purchase of $67,000 worth of office equipment last year, without proper procedures being followed and without the purchase being authorised by the Council's budget. Moreover, canegrowers are distressed by reports of huge amounts being expended by the Chief Executive on his overseas travels and on payments of allowances and per diem to Board members of the Council.

As a consequence of these disturbing reports, members of the NFU direct the union to take up the issue of the alleged mismanagement, abuse and misappropriation of funds with the Council's auditors and the Sugar Industry Tribunal.

8. Assistance to Displaced Farmers

Canegrowers from all parts of Fiji, attending the General Body Meeting of the National Farmers Union on 31st May 2003 in Lautoka, express their dissatisfaction at the unfair and unjust treatment by the SDL government of the displaced farmers whose land leases are not renewed. The meeting notes that between 1998 and 2002 some 4000 farming families have been displaced with very little or no state assistance provided to them except during the period of the Peoples Coalition government.

The meeting further notes that the rehabilitation grant ($28,000) to displaced farmers introduced by the Peoples Coalition Government was revoked by the interim administration and the SDL government and substituted by a so-called Farming Assistance Scheme ($10,000). However, payments under this scheme are not being made to displaced farmers whereas millions of dollars of taxpayers' money have been squandered in the vote-buying agricultural assistance Scheme (scam) introduced by the Qarase interim administration immediately before the 2001 general elections.

Canegrowers note the proposed Asian Development Bank initiative for alternative livelihood for displaced farmers but remain pessimistic about its intentions, Farmers are concerned about the allocation of benefits under the scheme and its implementation process.

Canegrowers fear that this scheme many be subjected to political pressure whereby no real benefits will accrue to displaced farmers, noting particularly, the absence from the scheme of any provision for direct financial assistance to displaced farmers to secure a new livelihood divorced from the agricultural sector.

The meeting, therefore, urges

• the Asian Development Bank project consultants to hold extensive discussions on the project, its design, objectives, funding arrangements, assistance criteria to be applied, and implementation processes with the representatives of the National Farmers Union, the largest organisation representing the canegrowers.
  
• the government of Fiji to allocate sufficient funds to the Farming Assistance Scheme and make immediate payments to all displaced farmers under the scheme's criteria
  
• the Sugar Cane Growers Fund to consider appropriate amendments to its legislation enabling it to provide assistance to displaced farmers for the education of their children and for other urgent purposes upto a financial limit per family for a period of two years.

The meeting condemned the passive role played by the Chief Executive of the SCGC and the inactivity of the Council as a whole in making representations to the authorities for assistance to displaced farmers.

9. Land Issue

Canegrowers from all parts of Fiji, attending the General Body Meeting of the National Farmers Union on 31st May 2003 in Lautoka, welcome the current talks between the government and the Fiji Labour Party representatives on resolving the agricultural land issue. They note that the sub-committee of the TALANOA talks dealing with this matter has completed its work and submitted a report for the consideration of the Prime Minister and the Leader of the Fiji Labour Party.

The meeting urges the two leaders to action the matter through the parliamentary process as soon as possible and, in so doing, to ensure that the legitimate concerns and interests of both the tenants and the landowners are addressed.