Sweetening the deal for small farmers

2013-05-13 00:00

“SUGAR is the world’s sweetener of choice. It’s also the cheapest source of carbohydrate and demand for it grows two to three percent annually,” says Roy Sharma, recently appointed president of the World Association of Beet and Cane Growers (WABCG) at its tri-annual world conference.

Despite this promising scenario, small-scale sugar farmers find themselves struggling. “Small-scale sugar farming in South Africa is not sustainable,” says Sharma. It’s a situation Sharma would like to remedy and the interests of small-scale growers worldwide will be something he seeks to promote during his presidency.

Sharma, a member of the board of directors of the South African Canegrowers Association and a member of its executive committee, was elected a WABCG vice-president three years ago when the world conference was held in Cambridge in the United Kingdom. This year, it was held in New Delhi in India, and traditionally the presidency goes to someone from the host country. But Sharma had the right qualifications for the job, not least an abiding interest in small-scale cane growers, of which India has 50 million, and he was duly voted president.

According to Trix Trikam, executive director of the South African Sugar Association, there has been a drastic reduction in small-scale South African cane growers, from 50 000 to 25 500. Sharma says this decline began 10 years ago and he blames it on a combination of factors that include cheap imported sugar, a lower world-market sugar price and the low returns of commercial farming. Sugar-cane farming is an expensive proposition, with herbicides, fertiliser and labour taking two-thirds of the income made from the crop.

Sharma says small-scale growers must learn not to put all their eggs in one basket. “By planting crops alongside sugar cane you can sustain a cash flow throughout the year.

“This isn’t happening in South Africa, but there is an opportunity for small-scale growers to earn income via intercropping — growing other crops alongside sugar cane.”

Sharma farms in the Maidstone area east of Tongaat, where his house sits on a rise. Nearby, the dome of a temple rises above the cane.

“With Indians, three things come: education, culture and hard work,” says Sharma. “You always find a school and a temple.”

Sharma’s great-grandfather came to South Africa courtesy of serving in the army and he subsequently settled here in the 1890s. “I didn’t know him, but my grandfather, Hurrinundan Sharma, whom I knew, was a farmer and an industrialist. He was an engineer — he built wagons, which were the main mode of transport at the time.”

Hurrinundan Sharma began the family farm, initially six hectares devoted to producing vegetables, and he was also the driving force behind the community initiatives that led to the building of a school and a temple.

Living and working on the family farm became the occupation of choice for successive sons, including Sharma’s father, Thiluk Sharma, who died in 1962 when Sharma was seven. “He left 10 children to be looked after by my mother Gocilia. At the time, my eldest brother, Chooramami Theerlokee — we called him C.T. — was at varsity on Salisbury Island in Durban. When our father died, C.T. gave that up to look after the family and to look after the farm. He also did a bit of teaching at local schools.”

Times were tough recalls Sharma. “Now we are benefiting from their hard labour.”

Sharma initially tried to find work beyond the farm selling machinery, but when his brother fell ill (he subsequently died in 1983), Sharma returned to the farm which he now runs with the help of his wife Prabha, and their eldest son Pratish. Their other son, Jithen, is a chartered accountant and daughter Smitha is a doctor.

Sharma first began growing sugar cane when the industry was deregulated in the nineties and big firms such as Tongaat Hulett and Illovo sold off farms to emerging black growers and concentrated on milling. Sharma bought a 93-hectare farm, but then the world sugar price fell and, as John M. Kline records in his book Ethics for International Business: Decision-Making in a Global Political Economy, the rand plummeted, sending the costs of fertiliser, herbicides and petrol — all imported — soaring. As Kline comments, Sharma rued the day he moved into sugar as he barely had enough profit left to meet the payments on the loan for the land he bought.

“This programme was supposed to uplift farmers,” Sharma said at the time. “But we’ve been pushed into a corner we can’t get out of.”

Sharma has now found a way out of that corner. “I have expanded. In 2005, I bought another farm of 90 hectares and, what with the original farm of 93 hectares and some small holdings, I now own 250 hectares of land. We are now enjoying the benefits of economy of scale.”

On a national scale, South Africa produces two million tons of sugar a year “or 2,2 million or 2,3 tons in a good year”, says Sharma.

Over 80% of this is produced by about 1 730 large-scale sugar-cane growers, including 323 black farmers. Milling companies, with their own sugar estates, produce just over seven percent and small-scale growers 9,31%.

Following deregulation, the sugar industry has become a two-tier industry, consisting of millers and growers. The two enjoy a “bittersweet relationship” according to Sharma. “The farmers want maximum return. The millers don’t see it that way, so we have conflicting views.”

As Sharma points out, the sugar industry is a proceeds-sharing industry, with the South African Sugar Association dividing the financial returns between growers and millers, and returns affected by a fluctuating world sugar price, currently heading down.

“In the short term, I expect it to go down further,” says Sharma, “because of Brazil coming back on board. There was a lull in production there but now they are back in full production.

“But our exposure to the world market is minimal,” says Sharma.

“A third of our production is sold overseas. Africa is our market.”

The industry’s dependency on the local market has been hard-hit by cheap imported sugar, mainly from Brazil. “There is no need for sugar imports,” says Sharma.

“It is only imported as traders see opportunity for making money,” says Sharma. “It’s not fair to point fingers at particular countries, as it is individuals making the deals.”

Sharma says the industry has lobbied the government. “We come under the Department of Trade and Industry”, and are creating an awareness of the situation. Adding impetus to such representations is the fact that the sugar industry has put its back behind the government’s 10-point plan for rural development aimed at small-scale farmers in deep rural areas.

“We have to deliver in these areas to make the plan work,” says Sharma. It is a conviction backed by “studies that have shown that communities living near sugar mills or cane fields have better standards of living”.

The future of sugar will see it moving beyond its main current usages as a sweetener, a preservative, or a food, into the fields of power generation and ethanol biofuel production.

“Ethanol production is very high on the world agenda, but not here as yet,” says Sharma. “The government is concerned about food security, although we have said we will only use surplus sugar.” Oil companies have also yet to be convinced.

Sugar cane is already being used for the generation of electricity. “So far it’s on a small scale, and it is being generated for use in the mills, but the potential is much bigger. It needs government support.”

Sharma is “very optimistic” about the future of sugar. “We have a bright future. As long as there are people, we have to produce food and I always recall Dr Frikkie Botha, past director of the SA Sugar Research Institute, saying that there are 101 uses for sugar cane and we haven’t realised them all yet.”

• feature1@witness.co.za

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