Cane growers petition for compensation

[posted 5 May 2010, 1300]

Fiji’s cane growers are seeking $24 per tonne in compensation from the Fiji Sugar Corporation for the huge losses they sustained in the 2009 crushing season due to chronic milling problems .

Growers from all districts have petitioned the Chief Executive of the Sugar Cane Growers Council (SCGC) to claim compensation from FSC for this loss incurred as a result of serious malfunctioning of the sugar mills last season.

The mills were continually breaking down, resulting in an extended crushing season – Rarawai and Lautoka mills continued to operate until January/February 2010.

About 40% of the cane delivered to the mills was wasted due to milling problems. The national average TCTS was 13.4:1 when the accepted norm is 9:1 ie. 9 tonnes of cane to a tonne of sugar.

Cane growers have calculated their loss to be $24 per tonne of cane delivered and have demanded that they be paid compensation to make up for their losses.

The full text of their petition is published below:

}We, the undersigned cane growers draw your attention to the huge losses suffered by the cane growers in the 2009 season due solely to failure on the part of the Fiji Sugar Corporation to maintain its mills in a good state of repair, so as to ensure the efficient recovery of sugar from the cane crushed (Section 14.1 of the Master Award).

We have calculated the losses suffered by the cane growers at approximately $24 per tonne of cane. You will recall that the forecast price for the 2009 season cane was announced at $61.17 per tonne, with the anticipated price estimated at $71.05 per tonne.

So far the farmers have received $53.96 as follows:

Delivery Payment 60% of forecast price ….                        36.70
2nd Cane Payment 20% of forecast price .…                      12.23
3rd Cane Payment (proceeds received to end of February) .… 5.03
                                                                                $53.96

We are reliably informed that the 4th cane payment due in May is unlikely or, if made, it will only be in the order of less than $1 per tonne of cane. If that is so, then it means that cane growers will not even receive the forecast price of $61.17, let alone the anticipated price of $71.05 per tonne.

Should the situation envisaged above materialise, then it will be the first time in the history of the industry that cane growers will be paid substantially less than the forecast price.

The issue here is: Who should rightfully take responsibility for the predicament that not only we but the entire industry faces today?

The 2009 season was a complete disaster as far as the operations of the FSC were concerned. The cane growers delivered on their part of the bargain by supplying the Corporation around 2.25 million tonnes of cane from which the latter should have manufactured 250,000 tonnes of sugar, based on a TCTS ratio of 9:1.

It will be recalled that cane growers were informed at the beginning of the crush that all mills had been refurbished and would operate smoothly. They were told that fresh green cane should be delivered to maximise sugar production.

However, the ground reality was the opposite of what the growers were told. None of the mills operated to the required levels of efficiency (Section 14.1 of the Master Award). The Penang Mill, however, could be said to have performed somewhat better compared to the disastrous performance of the Labasa, Lautoka and Rarawai Mills, in that order.

The result was that only (approximately) 165,000 tonnes of sugar was manufactured out of 2.25 million tonnes of cane, returning a TCTS ratio of 13.48:1. This effectively means that almost 4.5 tonnes of cane per tonne of sugar went to waste because of negligence and inefficiency on the part of the Corporation in complying with its obligations under the Master Award.

We, as well as you, know fully well of the tens of thousands of litres of partially processed cane juice that was regularly discharged into the rivers in Rarawai, Labasa and Penang and into the ocean at Lautoka. Proof of this is easily available from the health authorities and the municipal councils of these areas.

The huge losses that we have suffered are beyond our financial capacity to absorb. We did not cultivate cane for it to be trashed by the FSC. Almost one (1) million tonnes of cane went to waste because of gross negligence and inefficiency on the part of the miller.

We have calculated this loss to be in the order of $24 per tonne of cane over and above what we have been paid for so far. We, therefore, make a demand on the FSC for a final price of $78.96 per tonne of cane for the 2009 season.

Through this communication, we now formally request you and the Council to commence appropriate proceedings against the FSC in order to obtain for us the appropriate compensation for our losses as outlined above.

Further, we request that you take prompt action in the matter and have it settled before the commencement of the 2010 crushing season. Meanwhile, we have decided to await the outcome of our request before taking any further steps in relation to the 2010 season.

We look forward to a positive reply from you by 15 May 2010.~