Keeping it Sweet

Written By : SWANI MAHARAJ. The Fiji Sugar Corporation owes about $200 million in loans for mill upgrading. The forecast price this year is an unattractive $ 45 per ton.
06 Dec 2010 12:00

image Written By : SWANI MAHARAJ. The Fiji Sugar Corporation owes about $200 million in loans for mill upgrading.
The forecast price this year is an unattractive $ 45 per ton. Indo-Fijian farmers are pulling out of sugar cane farming and rural poverty and unemployment are rising. To date there is no solution in sight for the problem of land leases for sugar cane farming.
In such a scenario, what is the way forward for FSC and the Government? What is the incentive for sugar cane farmers? Should Fiji let its investment in sugar (capital investment, infrastructure, loans. etc.) go to waste? If not, is there a way to recoup investment and retain much needed sugar earnings?
Sugar was the biggest foreign exchange earner for Fiji since the colonial days and up to the 1980s, when tourism earnings surpassed those of sugar. Tourism is a good earner to boost foreign exchange reserves, but there is no logic in destroying the sugar cane industry to promote tourism as has been the trend in the past decade.
Every country endeavours to take advantage of all available options for national economic progress.
The wisdom is in exploiting as many avenues as possible for the national benefit, rather than destroying one for the sake of the other.
When the first ALTA leases began to expire in the 1980s, the Government made no effort to find some alternative lease solution to protect the golden goose – sugar cane farming.
Later, after the 1987 coup, to the 2000 coup and all through the reign of the SDL, there was a concerted effort to systematically destroy the sugar industry.
Overt and tunnel-visioned racism led to an uncompromising attitude and lack of initiative to resolve the land lease issue.
This was done to secure indigenous vote banks – and voters were so swayed by the racist rhetoric that they failed to see that ultimately the reduction of sugar earnings would hurt not only the Indo-Fijians, but everyone in Fiji.
On top of this, after the 2000 coup, Indo-Fijian farmers were terrorised and thrown out of their farms and homes, many with nothing but the clothes they were wearing.
This was such a traumatic experience that most Indo-Fijians farmers have been effectively deterred from re-engaging in sugar cane farming. And the lack of government will to effect a smooth transition of alternative lease arrangement has convinced farmers that there is no land lease security whatsoever and therefore there is no incentive for sugar cane farming, at least among the Indo-Fijian community.
All this while, the focus was on developing Tourism. This was mistakenly perceived to be more economically beneficial to the indigenous community, but it ignored the fact that tourism is restricted to very few areas.
Fiji needs every dollar it can earn and any effective administration must make national economic developmentits first priority.
There is still much to gain from sugar. Despite the loss of preferential prices, we must remember that Fiji still has market access. This access must be exploited to the fullest. In addition, the Government has ploughed in millions of dollars into FSC infrastructure, subsidies and loan guarantee – all this with taxpayers’ money.
It would be foolish to waste all this money, therefore, every effort must be made to revive this industry for the benefit of our people as well as to boost the economy which is in extremely bad shape.
The Prime Minister is making a sterling effort through legislative provisions to revive sugar and alleviate rural poverty. This effort also needs to consider the following:
Firstly, sugarcane farmers will no longer primarily be Indo-Fijians, therefore the Government needs to see how indigenous farmers can be empowered to take up this work; Secondly, in view of falling sugar prices, the Government and FSC need to provide incentives to ensure that farmers make maximum profit. Subsidies from taxpayers’ money are a total waste of resources. The best incentive is efficiently planned commercial intercropping.
Encouraging indigenous farmers: The modern trend in sugar producing countries is that the millers grow 25 per cent to 35 per cent of the cane to sustain themselves.
Therefore the FSC should create a subsidiary company and acquire all reserve land not utilised by landowners. In order to do this, FSC should assess the amount of land area required; subsequently the Government and NLTB should make it available to the FSC subsidiary company.
How soon this is done depends on the will and efficiency of the Government and NLTB, and the willingness of landowners to lease land, co-operate in sugar production and increase their earnings fourfold through lease rental, share-farming, inter-cropping and labour income. The FSC subsidiary company must utilise this land for commercial mechanised farming using paid indigenous labour.
NLTB should appoint two or three TASKFORCE OFFICERS for acquiring land leases and relevant consents within a given deadline. These officers should also develop share farming or other partnership models through mutual agreement with stakeholders.
Further, they must liaise with Sugar Research Institute to empower indigenous share farmers (in the FSC company/ private ones) through providing relevant education, negotiating and conflict resolution – so there are no ad hoc closing of roads, rail lines, for example.
Government can consider other ways to encourage indigenous farmers through mentoring, discipline and skills acquisition programs to eventually enable self – motivation.
FSC and the Government could identify and honour successful Indigenous farmers with awards similar to Small Business Awards. This will provide good incentives. Government could present regular programmes on TV to inform on farming advice, multi-cropping, best practice, advice on markets, options etc.
As mentioned earlier, intercropping cash crops with sugar cane will be an incentive for sugar cane farming as it will increase monetary gains to the farmer.
However, this needs to be well managed and commercialised, rather than the traditional subsistence intercropping that generally exists in Fiji where farmers might grow some beans, pulses etc, on sugar cane farms, for home consumption. Intercropping, which is associated with sustainable agriculture, is a farming practice where two or more crops are grown simultaneously on the same land.
The advantages of inter-cropping are numerous as recovering cane and inter-crop establishment cost per unit area generate additional farm income.
They also provide maximum land utilisation, weed control and cuts labour cost. Intercropping reduces hill side soil erosion, improves retention of moisture and improves soil health.
Research by Sugar Research Institute of Fiji (SRIF) shows that the cost of planting sugar cane, is $2300 per hectare. 50 per cent to 90 per cent of this cost can be recovered by the farmer through effective intercropping. This will enhance and supplement the farmer’s earning even with a low sugar price forecast.
Intercropping has been trialled in Fiji in good, medium and poor soil. The crops trialled off-season are long beans, water melon, cucumber and okra. Other crops such as peanuts and potatoes need to be trailed in Fiji.
Lower prices for sugar discourage farmers, but multi-cropping and mechanised farming can help increase monetary returns thereby making sugar farming more attractive. In these ways, Fiji could reverse the effects of the loss of preferential markets pricing. The loan could be paid off, and rural poverty and unemployment alleviated.
n Swani K Maharaj is a former Fiji Chamber of Commerce President. The views expressed in this column are his and do not reflect the views of The Fiji Sun.

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