Govt gets tough on 'non-transformative' sugar industry

Cape Town – The Department of Trade and Industry instructed the South African Sugar Association (SASA) to immediately stop paying levies to the South African Cane Growers Association until an agreement is reached on how to acknowledge black sugarcane growers in the sector, said Lionel October, director general.

He was part of a delegation that briefed Parliament’s portfolio committee on trade and industry on Friday on how to resolve an impasse in the sugar industry over transformation and participation.

The committee received input from the DTI and various organisation in South Africa’s sugar sector, including the overarching regulatory body the South African Sugar Association (SASA), its two member organisations the South African Cane Growers Association and the South African Millers Association as well as the South African Farmers Development Association (Safda) – a body that represents black farmers.

In October this year, Safda told members of Parliament that it is still not getting recognition from big stakeholders, such as the Cane Growers Association, although the DTI attempted to mediate an agreement among the various stakeholders in November 2016.

Safda’s exclusion from the federation also means they do not have access to levies that will help to support their operations and production.

Currently, the Cane Growers Association receives 100% of growers’ levies from the regulatory body. SASA is currently made up of 50/50 representation by the Millers Association, which represents millers and refiners, and Sagca, which represents cane growers.

“We’ve been trying for two years to get the two industry bodies (SASA and Safda) to work together,” October told Fin24. “They reached an agreement, but then the Cane Growers Association came and said they refused to implement it.”

READ: Fierce sugary tax debate moves to Parliament 

He said DTI wants both associations recognised and until that happens all levies must be stopped immediately. “In future, these organisations must share the levies 50/50, until they’ve reached an agreement among themselves on how to divide the levies.”  

SASA was also instructed to amend its constitution to acknowledge Safda as a legitimate industry body.

DTI’s solution is that all stakeholders must be represented in one single body, but if that agreement can’t be reached the sugar industry must be “shared 50/50”, October said.

“Let’s then recognise both (SASA and Safda). We hope this will force the parties into a negotiated settlement again.”

October was adamant that government cannot allow the status quo in the sugar industry to continue. “If people want to use the law to frustrate the process we’ll impose a solution.”

The DTI earlier suggested that the Sugar Act of 1978 should be amended so that other associations can be empowered in the legislation.

Currently, legislation only acknowledges the South African Sugar Association (Sasa).

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