Government is taking a series of measures, such as the diversification of products namely, organic sugar and bioplastics, the introduction of Artificial Intelligence and precision agriculture to reduce cost of production, and the development of software to optimise use of cane lands, so as to ensure the medium and long term sustainability of the sugar cane sector.
The Minister of Agro-Industry and Food Security, Mr Mahen Seeruttun, made this statement at the National Assembly, yesterday, in reply to the Private Notice Question pertaining to the medium and long term measures that will be taken to ensure the survival and prosperity of the sugar sector, especially, those of small planters.
Minister Seeruttun stated that other measures include the access to new markets namely, China and India; the creation of more inroads in our regional markets such as the Southern African Development Community and the Common Market for Eastern and Southern Africa; the compliance with international sugar standards such as Altromercato and Bonsucro; and encouraging more planters to comply with fair trade requirements. He pointed out that Government has been very sensitive to the plight of sugar cane planters, especially the 12 000 small planters whose livelihood depend on the income derived from sugar, and will not leave any stone unturned so as to ensure the sustainability and viability of this industry.
Furthermore, Minister Seeruttun said that on top of those measures, Government has enlisted the services of the World Bank to carry out a thorough study of the sugar cane sector.
The salient terms of reference of the study include, among others, the development of: an economic and financial analysis tool to undertake an assessment of the performance of the sugar cane industry (smallholder growers, producers, millers, traders); a value chain risk assessment tool to assess the main risks to the sugar cane industry sector, including world market sugar price volatility, energy price volatility, weather, and plant health shocks); and scenarios (vision exercise) of a sustainable sugar cane industry and develop public policy and program options to transition to a sustainable state.
The World Bank's study will also undertake an estimate of the value of externalities produced by the sugar cane industry (multiplier effect in other economic sectors, socio-environmental impacts, etc.) as well as an assessment of the performance of public sector institutions supporting the sugar cane industry; and review the operation of all institutions directly involved in servicing all the industry stakeholders and propose institutional reform measures for the support to be provided in an efficient and cost effective manner.
With regards to the provision made in Budget 2019-2020 for the allocation to all planters of an all-inclusive price of Rs 25 000 per ton of sugar for the first 60 tons of sugar accrued to them, the Minister said that this price includes the expected ex-MSS price of sugar per ton of Rs 10 000; other revenues including molasses and bagasse of Rs 2 625 per ton of sugar; and grants from the Central Electricity Board (CEB), the State Investment Financial Corporation and the Sugar Insurance Fund Board of around Rs 12 375 per ton of sugar. He added that the total grant will amount to Rs 650 million, of which the bulk amount will come from the CEB, to the tune of Rs 500 million.