The South Pacific Fertiliser Limited (SPFL) was already on the verge of liquidation when Mahendra Chaudhry took over as Sugar Minister at the beginning of 2007, says FLP
“It has become a dishonest habit of Jaganath Sami and his cohorts in the National Federation Party to blame every problem in the sugar industry on the Labour Leader,’’ said FLP’s acting Secretary General Lekh Ram Vayeshnoi.
Mr Vayeshnoi was responding to media statements by Jaganath Sami in the week-end that SPFL was directed by Mr Chaudhry as Sugar Minister in 2008 to sell fertilizers well below cost to farmers.
“This is not true. If blame is to be allocated, then it is no other than Jaganath Sami and his colleagues who were directors of the SPFL in 2004 who should be held accountable for the current financial woes of the fertilizer company,” Mr Vayeshnoi said.
In 2004, the SPFL board took a deliberate decision not to increase the price of fertilizer even though approval for a price increase was granted by the Prices and Incomes Board.
This decision, taken by a majority of directors, resulted in the company selling fertilizer at a loss from 2005 onwards. As a result, SPFL’s retained earnings which stood at $10.15m at the end of 2004, had eroded significantly by 2007 and would have been in the negative had timely assistance not been given by the interim government in 2008.
“If anything, a $2.5m assistance grant to SPFL by Sugar Minister Chaudhry in early 2008 averted the crisis that SPFL now faces. Apart from this government assistance, the industry also pumped in $6.5 million from sugar proceeds based on the 70/30 ratio to keep the company afloat.
Government will have to continue to financially assist SPFL to keep it afloat because of the importance of fertilizer to cane production,” Mr Vayeshnoi said.
“Mr Sami and his cohorts need to learn to be honest. They well know that the decline in the sugar industry set in after 2000, and at a time when Jaganath Sami as chief executive of the Sugar Cane Growers Council was at the helm of decision making in the industry. What did he do to salvage the industry when he had the opportunity?” Mr Vayeshnoi said.