Cane farmers seek tax holiday

[posted 2 May 2005]

The National Farmers Union is seeking a 5-year tax holiday for cane farmers to enable them to survive the withdrawal of EU subsidies for Fiji sugar.

It was one of the resolutions passed by 700 farmers at the NFU general body meeting in Sigatoka on Saturday.

The European Union subsidy enabled countries like Fiji in the African Caribbean Pacific bloc to enjoy a preferential EU price for Fiji sugar which was almost three times as much as the world price. It enabled Fiji farmers to enjoy prices as high as $60
a tonne for their cane.

Australia and Brazil had however complained against the EU subsidies to the World Trade Organisation which upheld the complaints. The EU has just lost an appeal against the WTO ruling.

As a result, the EU will now implement a phased withdrawal of its subsidies beginning next year. This means that the price farmers receive for their cane will drop to about $40.

The FSC has already announced that it may not make a profit on its sugar making business once the EU subsidies are withdrawn. Farmers are now worried about their own financial viability.

The five-year tax holiday will allow them breathing space to diversify and adjust to the reduced income from sugar.

NFU general secretary Mahendra Chaudhry said the tax holiday was not something new. “It was provided to farmers by the late Ratu Sir Kamisese Mara during his term as Prime Minister.

“It will help farmers cope with the price reduction and assist them in improving productivity so they will be able to remain in the sugar industry,” he said.

Without it many farmers will be forced to exit the sugar industry, Chaudhry said.

Among other resolutions passed at the GBM, farmers have resolved to boycott harvesting unless the Land Transport Authority relaxes the law against cane truck and tractor drivers. Several public rallies held in protest and meetings with the LTA on the issue have so far been unsuccessful.