Sugar subsidies questioned amid declining cane tonnage

Fiji's continued financial support to sugarcane farmers is not delivering results, with production and tonnage still falling despite years of Government subsidies.

The Standing Committee on Economic Affairs heard this during the Ministry of Agriculture, Waterways and Sugar Industry’s submission on the Ministry of Sugar Industry's 2021-2022 Annual Report.

Committee chairperson and Assistant Minister in the Office of the Prime Minister Sakiusa Tubuna raised concerns about whether the level of support provided to the sugar industry was producing adequate returns.

"The subsidies and every support that we are giving the industry is not yielding the return," Mr Tubuna said. "I don't think the return has been attained."

Mr Tubuna said only 20 per cent of farmers produced 80 per cent of total cane tonnage, adding that subsidies were provided to all farmers without proper targeting.

Director Operations Pranil Naidu said a tiered system was now in place for planting grants, but a similar system could not be applied to cane top-up payments, which needed to remain open to all farmers.

Mr Naidu also acknowledged that the Ministry could not confirm whether subsidies were producing returns.

He said fertiliser subsidies were reduced from $20 million to $15 million last year without knowing their impact on yields.

Permanent Secretary Andrew Tukana said the industry needed reform rather than continuing to survive on subsidies.

"We cannot continue to indefinitely address structural problems through subsidies and short-term interventions," he said.

Mr Tubuna said a special sugar task force was now considering the future shape of the industry, which could result in a smaller sugar sector.

"You might have one or reduced," he said.

He added that subsidising sugar alone was unfair to other crops, including coconut, cocoa and coffee, which also needed support.