Opinion

Growing Sugar For Sustainable Future

The following is Prime Minister  Voreqe Bainimarama’s address delivered on his behalf to the International Sugar Organisation 49th Council meeting at the Hotel Hilton Bomonti in Istanbul, Turkey.    
30 May 2016 08:50
Growing Sugar For Sustainable Future
Prime Minister Voreqe Bainimarama.

The following is Prime Minister  Voreqe Bainimarama’s address delivered on his behalf to the International Sugar Organisation 49th Council meeting at the Hotel Hilton Bomonti in Istanbul, Turkey.

 

 

Mr. Chairman,

My fellow Ministers,

The Executive Director,

Excellencies,

Ladies and Gentlemen.

Bula vinaka and a very good morning to you all.

First of all, I want to convey to the Turkish Government Fiji’s appreciation for the wonderful hospitality that has been extended to our delegation since we arrived in Istanbul last Saturday (May 21). It has been a great privilege to be in this beautiful and historic city. And I want to commend Turkey for the way in which it has so successfully met the challenge of hosting the World Humanitarian Summit, as well as this gathering of the ISC.

So much has happened since we last met for the 48th session in London that I can scarcely believe that it was only six months ago. Because for the world and for Fiji, events have been moving very quickly.

Just after our meeting last November, of course, the nations of the world gathered in Paris for the United Nations Conference on Climate Change. And there we reached an historic agreement to cap global warming at no more than two degrees Celsius above the level that existed before the industrial age.

A wave of euphoria swept the world because we had at least agreed on something. Yet Fiji regards Paris as merely a first step, not the final destination. Because the scientists tell us that a cap of two degrees is not enough to save us from the more extreme and more frequent weather events and rising seas caused by climate change.

Fiji and the other members of the Pacific Islands Development Forum went to Paris with our Suva Declaration calling for the global warming cap to be lower – one point five per cent, not two per cent.

And while this was rejected, I urge you all in the global sugar industry to embrace this as a crucial next step. Because it is clear on current predictions that we need much more radical action to maximise our chances of adapting and, in some cases, surviving the challenge this warming presents.

Fiji is proud to have been the first country in the world to formally approve the Paris Agreement and lodge the ratification instruments. And I am using every available opportunity to urge the rest of the world to follow our lead, including any sugar producing nation that has yet to do so.

But I repeat: Paris must be merely the first step. And I say that because the Fijian experience over the past three months is a stark lesson to the world of the frightening new era that is dawning on us because of climate change.

On February 20th, the biggest tropical cyclone ever to make landfall in the southern hemisphere slammed into Fiji with winds of more than 300 kilometres an hour. As I explained at the World Humanitarian Summit earlier in the week, Cyclone Winston killed 44 of our people and damaged or destroyed 40,000 homes, along with a great deal of public infrastructure, including 229 schools.

Winston has left us with an all up damage bill of 1.4 billion US dollars (FJ$2.98bn). And as you can imagine, the cyclonic winds and associated flooding ravaged our agricultural production, including the sugar cane sector.

Our industry and the people who work in it took a fearful beating from Winston – a beating from which in many instances, it will take months or even years to recover.

Our all up losses in the sugar cane industry add up to 163.35 million Fijian dollars. The loss of workers’ livelihoods is 53.3 million Fijian dollars. The damage and losses at the Fiji Sugar Corporation’s mills is pegged at 72.7 million Fijian dollars. Production infrastructure losses are 16.9 million dollars. And a further 19.7 million Fijian dollars has been lost in industry services.

Mr Chairman, before the cyclone, we had high hopes for a bumper year when our 2016 crushing season starts next month. But because of Winston, this year’s production is expected to drop by about 30 per cent.

We are now estimating a crop of 1.48 million metric tonnes of cane and 164,330 metric tonnes of raw sugar with a TCTS (Tonnes of cane to tonnes of sugar) of 9.0. When compared to the 2015 crushing season, these estimates represent a decline in cane production of 19.6 per cent; a decline in sugar production of 25.9 per cent and a slight decline in TCTS of 8 per cent.

Mr Chairman, obviously for an industry and an economy on the scale of Fiji’s, Winston has been a terrible setback. But we were fortunate that the cyclone spared our main tourism areas, our visitors kept coming and our main export revenue earner has remained buoyant. It means that that Fijian economy overall has been able to weather the blow to sugar – our second biggest earner – reasonably well. And we are still expecting our economy as a whole to grow by up to 3 per cent this year despite the devastation wrought by Winston.

But as I have already explained this week, it is simply a matter of luck. Winston affected only part of the country and as I say, spared our main revenue earner. But we live in constant fear of what might happen if a cyclone scores a direct hit on the entire country. Our economy could be devastated for years to come, all our hard won development gains would be lost and we would have little or no chance of meeting our 2030 Sustainable Development Goals.

So it is against this sobering backdrop that Fiji goes to the world with an urgent plea. For the global community to give us immediate access to the finance we need – in the form of grants or loans – to build our resilience to climate change. To strengthen our homes and our infrastructure, including in the sugar cane industry. To future proof our nation against the ever-rising seas and more extreme weather events the scientists say are coming our way. To give ourselves a fighting chance.

Mr Chairman, that is now our number one national priority – to strengthen our economy, the industry, and protect the 200,000 Fijians who depend on sugar for their livelihoods. While at the same time, embracing the reforms that we must embrace to make the Fijian sugar cane industry more efficient and guarantee a viable future.

New or better technology; new strains of cane; new uses for our sugar crop. Working harder and smarter to ensure a future not only for those dependent on cane today but those to come.

And Mr Chairman, it is working.  Over the past five years, my Government’s reforms have improved sugar extraction by 37 per cent, reduced our sugar production cost by 30 per cent and increased the sugar cane payment to our farmers by 78 per cent, even at times of price volatility for sugar in the global marketplace.

Yet all we get is carping negativity from our domestic critics, who seem to get some kind of perverse pleasure from talking down the industry and spreading anxiety among ordinary Fijians about the future.

As you all know, we are preparing the industry for a new era – the abolition of the sugar quotas to the European Union from October 1st 2017. And we have undertaken a series of reforms to put us on a better footing when that challenge comes in 16 months time.

We have already dismantled a number of industry structures, begun to upgrade three of our four mills and strengthened the finances of the Fiji Sugar Corporation.

Now, we are concentrating on the legal framework of the industry – further refining and streamlining its processes – with two bills that have been before a Parliamentary Committee that will soon report to Parliament itself.

An Industry Reform Bill merges administrative functions and brings the various industry stakeholders closer together, especially farmers and millers. And both bills dispense with some historical institutions that are no longer relevant in the much more dynamic and price volatile environment that is the sugar cane industry today.

Because the industry plays such a key role in the Fijian economy, my Government was keen to get the views of as many people as possible through a public consultation process. Yet instead of coming forward with constructive ideas to improve the bills and help make the industry more efficient, a few politically motivated individuals and organisations turned the hearings into a circus.

We had a conga line of failed politicians and other naysayers attacking our reforms without putting forward a cogent alternative blueprint, a single fresh idea. Other than throwing good money after bad. Short term fixes rather than long term sustainability.

It is the mentality that brought the Fijian industry to its knees in the first place. No business sense. No idea how a modern economy works. No concept of innovation or embracing new technology. Just the same old crude politicisation of the industry.  The same old grandstanding. The same attempt to instill fear in ordinary Fijians about their futures when as Franklin Roosevelt famously said, “all we have to fear is fear itself”.

Because, Mr Chairman, my government intends to maintain a healthy sugar cane industry in Fiji and give it a healthy future by doing things differently. By thinking outside the box. By embracing new ways of doing things.

Earlier this month the Fiji Sugar Corporation, which owns the four sugar mills, launched its Strategic Business Plan for 2016 – 2020. This gives the industry the platform it needs to prosper after October 2017. The overall strategy is to reduce the cost of production while maximising revenue. And I urge the entire industry to embrace it with the confidence and optimism I believe it deserves.

We also eagerly await the findings of the study funded by the EU “on Current and Forecast Market Developments for ACP Sugar Suppliers to the European Market” carried out by LMC International in April. As you know, Fiji was one of five sugar producing countries in the ACP group that participated in this study. And we expect that it will give us some strategic options in terms of finding alternative markets when the EU quotas end next year.

Two new diversification projects – our proposed Syrup Mill for Penang and the proposed Cogeneration Project in Rarawai – are temporarily on hold pending independent feasibility studies. While we are behind schedule in the initial start-up dates for these projects, we intend to do them properly in the interests of credibility, transparency and the long term benefit of growers.

Mr Chairman, I repeat:  Despite the setback of Winston, the overall outlook for the Fijian industry is positive. We are not only producing more cane but more importantly, producing more sugar from less cane and approaching international benchmarks. So I appeal to sugar cane growers and other industry workers to turn their backs on the naysayers and join my government in embracing the future.

Yes, we have some underlying challenges but we are methodically dealing with these. And I am convinced that we are on course to establish a genuinely sustainable industry IF we can embrace change and IF we can stay focused and united.

We have certainly demonstrated to the world in the past three months that we are a resilient people capable of extraordinary things when we work together. And I hope that we can harness that spirit to also move the Fijian sugar cane industry forward and give the 200,000 people who depend on it the future they deserve.

Vinaka vakalevu. Thank you.

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