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Sugar's grim future

Felix Chaudhary
Friday, April 03, 2015

THE National Federation Party says it is critical that Government addresses issues facing the sugar industry before preferential market access of locally produced sweetener into the European Union ends in 2017.

Opposition member and party leader Professor Biman Prasad said the situation for the industry post 2017 was grim.

Prof Prasad said the NFP was disappointed that calls for a minimum guaranteed price of $85 per tonne over the next four years to instill confidence in the industry had not been entertained by the current Government.

Prof Prasad said while production increased last year from 2013 figures, global price volatility, the end of preferential access to the EU and increasing production costs would make it difficult for growers to survive if the Government was not willing to set a guaranteed minimum price for cane.

"The average cost of production of one tonne of cane is $45," he explained while speaking at the Pacific Dialogue Youth Forum earlier this week.

"This includes all farm, harvesting and delivery costs.

"For the 2013 season, farmers received a little less than $89 per tonne.

"If one removes the cost of production, harvesting and delivery of cane of $45, the net income that farmers get from a tonne of cane is $44."

The NFP leader said 70 per cent of canefarmers in the country produced an average of 200 tonnes annually.

"Their net income at $44 by 200 tonnes is $8800 in a season.

"And farmers receive this money over a period of 14 months.

"This is well below the tax threshold of $16,000.

"No other commercial business can survive on this.

"That is why we have been calling for the implementation of a minimum guaranteed price of $85 per tonne for the next four years so that we can instill confidence in farmers so that the industry can be resuscitated."

Prof Prasad said the NFP had repeatedly asked for a parliamentary select committee on sugar with a bipartisan approach to ensure the viability of the industry that directly and indirectly supported 200,000 Fijians.

Responding to questions from Opposition member Ratu Sela Nanovo in Parliament on March 20 on a minimum cane price, Prime Minister Voreqe Bainimarama had this to say:

"The question is not to pay an arbitrarily derived guaranteed price to the farmers, but to ensure that we pay a price to our farmers that is fair and reasonable, so that they continue to remain in the industry and make a reasonable living from farming.

"I am sure that the honourable member is aware that sugar is a commodity and is exposed to the world market price for commodities.

"The farmers are presently paid as per the outdated Master Award and as such, are exposed to the risk of the world market prices."

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