SOUTH AFRICAN SUGAR INDUSTRY
SUBMISSION
PUBLIC HEARINGS ON ROLE OF PRIVATE SECTOR IN AGRICULTURAL DEVELOPMENT: 9-10 JUNE 2003

INTRODUCTION

The sugar industry has made a substantive contribution to agricultural development. As a sector it has been involved in numerous initiatives to improve the agricultural domain, details of which will be provided in this document.

For many years it has contributed to the empowerment and development of rural communities in the sugar producing areas. Its spatial focus extends from North Pondoland in the Eastern Cape to Mpumalanga in the north.

Table 1: South African Sugar Industry Stakeholders:

Milling Companies

Grower Structures

Support Organisations

Tongaat-Hulett Sugar Limited

SACGA Board of Directors

South African Sugar Association

Illovo Sugar Limited

SACGA Executive Committee

Mill Group Boards

Transvaal Suiker Beperk

Mill Area Local Councils

Sugar Milling Research Institute

Union Co-operative Limited

Local Planters Associations, Mill Cane Committees and Mill Group Associations

South African Sugar Technologists’ Association

   

South African Sugar Industry Agronomists’ Association

   

Sugar Manufacturing and Refining Employers’ Association

   

National Bargaining Council for the Sugar Manufacturing and Refining Industry


The South African sugar industry has a diverse array of stakeholders, and has been involved in a range of holistic development and empowerment initiatives. Grower structures have equal representation both in decision-making and elected leadership from the grass-roots member organisation level to the Board of Directors. The grower structure is represented through 271 local structures across the sugar industry.

The South African sugar industry recognizes that social responsibility is not only limited to the actions of the organisation, but extends to the relevant stakeholders as well as the community at large. The South African sugar industry is at the forefront of promoting sustainable development in the commodity sector. As a sugar industry it is in constant dialogue with developing and contributing to a sustainable future through a responsible corporate citizenship approach.

The Sugar Industry Development Vision is:
"The South African sugar industry intends remaining a valuable contributor to the economy in which it operates, and a relevant and valued component of society, as well as contributing to a vibrant, healthy and skilled civil society where all have an equitable opportunity to participate."

Within this context the sugar industry seeks to be an industry that:

acts ethically with integrity, purpose and responsibility to all stakeholders;
plays a facilitating role in forging co-operation for development within sugar producing countries in SADC;
promotes the advancement and development of skills to ensure the international competitiveness of the South African sugar industry, and shares this research and development with SADC sugar industries on a user-pays basis;
promotes the development of small-scale growers, and emergent growers on freehold land;
creates opportunities for revenue earning in subsistence farming areas;
uses its position as a rurally based industry to promote socio-economic development in these under-resourced areas.

The sugar industry’s main development focus areas are:

Land Reform
Emerging Growers
Education and Training
HIV/Aids

This document is divided into the following sections as per the request:

How much has been used or budgeted for agricultural development from 1994 to date?
What activities have been organized or embarked upon on agricultural development?
What future inputs/programmes will your institution be involved in future?
Your relationship with the Department of Agriculture and Land Affairs?

FINANCIAL CONTRIBUTION

How much has been used or budgeted for agricultural development from 1994 to date?

Presenting an exact figure for all agricultural development undertaken in the sugar industry sector for the period 1994-2002 is currently not available, however gathering this information is underway as a function of the newly formed sugar industry Development Desk. This data will be made available on completion of this internal assessment.

For information Annex 1 provides a broader definition of development inputs by the sugar industry collectively where in the year 2000 a total development contribution of R72 million was estimated by all industry stakeholders as per table 1. (Prepared and verified by independent consultants.)

OUTLINE OF ACTIVITES

What activities have been organized or embarked upon on agricultural development?

A review and impact perspective of sugar industry small-scale growers initiatives is presented. In considering a holistic view of the sugar industry’s relationship with small-scale growers the main impact of its interventions were identified as follows:

Wealth creation in agricultural and rural areas;
Increased sustainable employment;
Improved farming efficiency;
Support programmes for black farmers;
Improved stability of rural communities.

The scope of initiatives is summarized in Annex 2: (For further detail please contact the Development Desk – Mrs Aline John, Tel: 031-5087000, Fax: 031-5087191 e-mail
Aline.John@sasa.org.za).

4. FUTURE PROGRAMMES

What future inputs/programmes will your institution be involved in?

The sugar industry, while continuing the range of initiatives detailed above, is currently refocusing the approach in the following key development focus areas are:
Small-Scale Farming Development
Land Reform
Development Desk
Small-Scale Farming Development

The draft sugar industry small-scale farming development vision is:

"The South African sugar industry commits itself in a public-private-partnership with central and local government to the strategic nurturing and facilitation of sustainable small-scale farming communities as a means to rural development, empowerment, poverty alleviation and improvement in quality of life in rural sugar cane areas."

The sugar industry is currently considering adopting a sustainable livelihoods approach to supporting small-scale farmers. The Sustainable livelihoods approach places people at the centre of development focusing on how people can improve, maintain and sustain their livelihoods. SLA considers all aspects of people’s lives and therefore adopts a holistic approach, embracing their multiple strategies and activities to sustain their livelihood.

An indicative and regional application of the SLA approach for the development and implementation of a community-development strategy is currently being advanced by the sugar industry.

Land Reform

The sugar industry Land Reform vision is:

"A sustainable sugar industry in South Africa ensured through diverse ownership of agricultural land under sugar cane by competent farmers by 2015."

The sugar industry is currently embarking on an exciting Land Reform initiative, tentatively called Land Co. The sugar industry has consulted with the Department of Agriculture and Land on the concept of Land Co as an instrument to support and possible fast track land reform in support of governments land reform vision. This initiative is still in its early stages of development and has not yet been publicly announced (it is kindly requested that this remains confidential). Land Co is being proposed as an independent instrument to promote and accelerate black ownership of freehold land for sustainable farming in South Africa, initially within the sugar industry.

The industry has been active in promoting black participation in farming sugarcane, via:

Milling company sales of company-owned 70-120ha farms to 120 medium-scale black farmers
Umthombo Agricultural Finance for small-scale farmers
The Small-scale Grower Development Trust for empowerment training and capacity
A partnership between Extension Services and the Department of Agriculture for research and development
The Phiva Project in Nkomazi, establishing small-scale farmers in the LRAD Nkomazi Irrigation Expansion Project
Two pilot sharecropping projects, at Mtunzini and Shakaskraal
Private grower initiatives (e.g. Charl Senekal)
Small scale farmer development programme

These initiatives have resulted in considerable industry-wide learning about some potentially effective models for mentoring new farmers and securing their land rights through land purchases and leases. A drive to facilitate a broader base of black land ownership and empowered farming is a logical extension of the activities undertaken to date.

The end product of these land reform initiatives would be a significant change in the racial distribution of land ownership and a well-balanced mix of farming systems under a variety of secure tenure forms. The Sugar Industry is committed to government’s target of transferring 30% of privately owned land into black ownership by 2015. For the Sugar Industry this translates into 78 000 ha of privately owned land by 2015, although it should be noted that 20 000 ha has already been transferred to black ownership.

Development Desk

Currently the Sugar Industry is piloting a one-year, Development Information Desk that would facilitate the development vision of ensuring that:

"The South African sugar industry intends remaining a valuable contributor to the economy in which it operates, and a relevant and valued component of society, as well as contributing to a vibrant, healthy and skilled civil society where all have an equitable opportunity to participate."

In order to meet these terms of reference the Development Information Desk was proposed to:


Communicate industry development Vision and Mission: demonstrate commitment;
Motivate support: mobilising others within the industry around the commitment and agreed focus areas.

The main focus of the Development Desk will be to gather, analyse and disseminate information needed by the industry to facilitate timely decision making in the important areas of development the priority areas as defined in the Terms of Reference, viz. Land Reform, Small-Scale Farming, Education and Training and HIV/Aids.

In addition as set out in Annex 1, the sugar industry will continue with the RDP sub-programmes detailed.

RELATIONSHIP

Your relationship with the Department of Agriculture and Land Affairs?

National

The Sugar Industry is regulated by the Sugar Act (9 of 1978 as amended), which is administered by the Department of Trade and Industry, however most of the sugar industry functions fall within the ambit of the National Department of Agriculture and Land, Water Affairs and Forestry and hence proactive relationship building through familiarization visits to the industry and participation in appropriate debate on legislation and initiatives is undertaken.

Provincial

In 1994, SASEX entered into a Joint Venture (JV) agreement with the KwaZulu-Natal Department of Agriculture and Environmental Affairs (DAEA), for the provision of the effective extension to the small-scale grower sector. SASEX has seconded 5 specialist Extension Officers to JV agreement and DAEA have seconded 36 Agricultural Technicians.

SACGA has entered into a Partnership Agreement with KwaZulu Natal Land Claims Commission with the prime aim to fast track claims against land in the sugar growing areas. SACGA has seconded its staff member in the Commission's Offices in Pietermarizburg for six months for this purpose. To date, this partnership has achieved the following, viz. better comprehension of the land claims processes by sugar cane farmers, better understanding of the legal status of identified sugar claims, better understanding by the Commission of the concerns raised by SACGA and most important, categories and status of claims on sugar land. The process is still continuing and much communication between the Commission and the affected landowners and claimants is still being required and the relationship thus far developed will assist in better solutions to the challenges faced.


ENDS

ANNEX 1

FINANCIAL SUPPORT

RDP Sub-Programme

2000

Meeting Basic Needs

19,911,000

Land Reform

4,180,000

Housing & Services

1,500,000

Water & Sanitation

350,000

Energy & Electrification

601,000

Transport

5,135,000

Environment

125,000

Nutrition

2,500,000

Health Care

7,300,000

Social Security & Welfare

2,400,000

 

 

Developing our Human Resources

11,788,000

Formal Education

2,150,000

Non-Formal Education

1,429,000

Vocational & Technical Skills Training

7,439,000

Early Childhood Development

180,000

Sports & Recreation

250,000

Arts & Culture

100,000

Vocational & Career Guidance

240,000

 

 

Building the Economy

38,750,000

Technology & Productivity

15,000,000

Management Structures

1,200,000

Inequalities

2,360,000

SMME’s

13,010,000

Rural Development *

6,310,000

Labour & Workers Rights

87,000

 

 

Democratising the State and Society

1,509,000

Empowerment & Representation

69,000

Participation of Women

219,000

Access to Information

60,000

 

 

Total

R71,958,000

Note to Table 1: The 2000 figures were externally gathered and assessed by consultants.

ANNEX 2

SUMMARY MATRIX OF AGRICULTURAL SUPPORT SERVICES
TARGETING SMALL-SCALE GROWERS

Services Targeting SSG

Programme of Work

Budget
(2002/03)

SASEX

Extension

Partnerships and Relationship-building
New Initiatives and Special Projects
Research Projects
Demonstration Plots
Training the Trainers
Transferring Information to the SSGs
Accountability to Growers
Resources Through other Partnerships

R15,500,000

 

Training

Sugarcane Husbandry
Applied Business Principles

ITC

SSG Activities

A new focus area in the 2003/4 training programme and not in the period under review.

 

External Affairs

Environment

Environmental issues addressed via the SSG extension service

 
 

Grower Development Account

Contractor’s Support Programme (CSP)
Intercropping Trials
Small-Scale Grower Extension Service
Extension Poster Series
RV Subsidisation Initiative

Project budgets to UAF, SGDT and special projects

2,000,000

 

Sugar Industry Trust Fund for Education

Direct budget and gearing through partnerships.

R5,310,000

 

KwaZulu Water Development Fund

750 Water Schemes
Cholera Programme
Plan to work with ‘Working for Water’

R78 000

 

Community Based Programmes

Siyakha & IDT Programme – 112 projects and 64 000 labour days of employment. R21 million (1992-1997)

R0

 

Communications

New SSG Sugar Journal reaches those SSGs for 2993/04.

R0

 

Project Preparation Fund

Accessible if a viable project with potential third party funding is identified. R1,3 m revolving fund available.

 
 

Social Investment Budget

Broadly allocated to projects in sugar areas but limited in its current ‘link’ to SSG community.

R1,200,000

South African CANEGROWERS- SGDT

Value of Small-Scale Sugar Farming
85 000Ha with 3 million tons annual production
R498 million current annual turnover
Contracting: R 67 million turnover per annum
Umthombo Agricultural Finance Loans.
New Freehold Grower Settlement
15 000 ha with 750 000 tons
R113 million expected turnover in 2003/04
Value of Investment – approximately R190 million in total
Training:Small Grower Development Trust
Mill Cane Committee Leadership Training
Mill Cane Committee Staff Training
Small Scale Grower Technical Training
Others: ITC Sugar Leadership.
Extension and Technology Transfer
Joint Venture Agreement
Publications
Demonstration Plots
Other
Business Management Advice and Farm Accounts
Regional Economic Advisory Service
Farm Accounting and VAT




R574, 000











R4, 200, 000










R2, 500,000

South African Sugar Millers

 

120 new Freehold farmers on 12 000 hectares.

 

UAF

 

Umthombo Agricultural Finance Loans- approximately R250 million loans granted to small-scale growers R9million per annum.
Loans
Retention Savings

R4,300,00

   

Estimated Total

R49,900,000