Sugar unions not responsible for the industry decline

  • 24th March 2011
  • 2011
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Trade unions and politicians cannot be blamed for the current critical state of the sugar industry, says NFU General Secretary Mahendra Chaudhry.

He was responding to statements by Commodore Voreqe Bainimarama blaming the “politicisation” of the sugar industry for its current decline; in particular comments that had appeared in the Fiji Sun (22/2/11).

In a letter dated 25 February to the Prime Minister, Mr Chaudhry pointed out that blaming unions and politics was hardly the solution to the current crisis facing the industry.

In fact, data from FSC belies the claims of the Prime Minister. Statistics show that in the heyday of sugar politics, the industry had been performing at its peak – producing 4 million tonnes of cane and well over 400,000 tonnes of sugar. In 1994, for instance sugar production had reached a record 517,000 tonnes with a TCTS of 7.9.

The decline in the industry began after 1999 when it last produced 4 million tonnes of cane and 377,000 tonnes of sugar. In the years 2000-2006 production varied as the following table shows (source FSC annual reports)

Season Cane crushed tonnes (m) Sugar Make tonnes (000) TCTS
2000 3.89 341 11
2001 2.80 293 10
2002 3.42 330 10
2003 2.61 294 9
2004 3.00 314 10
2005 2.79 289 10
2006 3.23 310 10

It is in the past three years that the industry has slumped dramatically. NB: at a time when there was no ‘politics’. This decline is clearly indicated by the following statistics (FSC annual reports and statistics):

Season Cane crushed tonnes (m) Sugar Make tonnes (000) TCTS
2007 2.48 237 10.0
2008 2.32 208 11.0
2009 2.25 168 13.4
2010 1.80 133 13.5

One must therefore look elsewhere for the current critical state of the industry. NFU’s own research and the views obtained from industry experts attribute it to the following

  • a drastic decline in milling standards with the average TCTS ratio climbing to 13.5 from around 10.0 in 2007, resulting in huge wastage of cane delivered to the mills.
  • the dismantling in 2009 of key industry institutions, created under the Sugar Industry Act of 1984, which had ensured a consultative approach to resolving problems in the industry. As a result, FSC is now no longer held accountable/answerable for the performance of its mills;
  • heavy financial losses incurred by growers as a result of soaring costs of farm production, harvesting and transportation of cane to the mills. This is aggravated by falling cane prices as a result of low sugar make due to milling inefficiencies, particularly in the 2009 and 2010 seasons, making cane cultivation unprofitable
  • increasing uncertainty, frustration and hardship have   lowered the morale of the growers and sapped confidence in the future of the industry; people are simply abandoning cane farming and turning to other forms of livelihood
  • the inability to access EU funding means that capital resources vital for the restructure and revitalisation of the industry are not available
  • the marked decline in cane production after 2000 can be attributed to the non renewal of expiring cane leases resulting in 6000 farming families being displaced

Unions and the politicians cannot be blamed for any of these. Indeed, the National Farmers Union had written repeatedly to the Prime Minister and Minister for Sugar in 2008 and 2009 highlighting the deteriorating state of the industry and advising on measures that needed to be undertaken to salvage it. A total of 12 letters were written between 17 September 2008 and 24 November 2009.

Except for two, all other letters were simply ignored. Mr Chaudhry said on 20 August 2009 he wrote again to the Prime Minister expressing concern at government’s decision to dismantle the Sugar Cane Growers Council, pointing out the adverse consequences of such a move.

A reply was received two months later on 26 October, acknowledging the letter but closing all further correspondence on the subject.

Having chosen to ignore advice given by the NFU, the Prime Minister cannot now blame the unions and the politicians for the current state of affairs in the sugar industry. Indeed, the NFU has nothing to gain by undermining the industry – in fact, much to lose.

Furthermore, the policies and actions of the interim government have rendered the unions ineffective, and deprived the growers of a voice in industry matters. The growers are the producers of the raw material for sugar. One cannot ignore them or completely marginalise them and still expect the industry to flourish. As mentioned earlier, cane growers are frustrated and disillusioned. They cannot be held responsible if things go wrong through no fault of their own.

In the past two seasons growers have sustained enormous losses as a result of milling problems and inefficiencies. Almost 40% of cane delivered to the mills has been lost as either molasses or wasted juice dumped in the rivers and seas.

In 2009, total loss to the industry was put at $100 million of which the growers sustained $70m. In the 2010 total loss to the industry was estimated at $50m, of which the growers share came to $35 million. In two years, therefore, cane growers have lost more than $100m through no fault of theirs. Loss to the industry has been a massive $150million.

The problem lies not with unions and politicians but with FSC and its ailing mills, and interference by the State with the checks and balances that were provided under the 1984 Sugar Industry Act.

Mr Chaudhry said the NFU was ready and willing to assist in the rehabilitation of the industry. “But we believe that this can only be achieved through consultation, cooperation and holding the respective parties in the industry – growers, the miller and workers – accountable for their performance.”

“It is our advice that an all industry conference be convened by you well before the commencement of the next crushing season to agree on a rehabilitation plan through inclusive dialogue. We await your decision” said Mr Chaudhry in the letter.

A response to the letter is yet to be received.

LR Vayeshnoi