NFP proposes rescue package for the Sugar Industry
Fiji One News (Monday 11 July, 2016)
The National Federation Party has again highlighted a motion in tabled in Parliament last week proposing an increase of $50 Million for sugar cane development and farmers assistance programme.
The NFP is calling on Government to reconsider the proposal which it says could save the ailing industry, claiming that Government had for the last six to seven years done nothing to improve confidence in the sugar sector.
NFP Member of Parliament, Dr. Biman Prasad says the rejection of their proposal to increase funding to $50 Million a year over the next three years, could mean the death of the sugar industry.
“As you know the industry is on the verge of collapse. You have FSC (Fiji Sugar Corporation) which is basically insolvent. Government has continuously put in money into FSC over the last eight to nine years and nothing on the farms. And basically what we are saying is that if you want to rescue the sugar industry you got to get back to the farmers. The farmers over the last eight to nine years have had no support from Government,” Dr. Biman said.
NFP proposes that if the price per tonne of sugar is set at $15 per tonne that will guarantee a minimum price $85 to $90 a tonne for the next three years.
“If Government puts in $50M a year for the next three years and out of that $50M if the price per tonne of sugar is set at $15 per tonne that will guarantee a minimum price of $85 to $90 a tonne for the next three years.”
“Now that would cost Government $22-$23M a year. The rest of the $50M that we are proposing could go into premiums for landowners to renew leases, for cane access roads, for other developments, for replanting and so $50M a year is not a lot of money given the fact that Government has not put in anything basically anything onto the farms over the last eight to nine years.”
Dr. Biman said Government still has time to reconsider their proposal to rescue the industry.
“Its not too late for Government to reconsider its strength – allocate $50M a year for the next three years and I’ve said what are the components of that $50M – if you have a price subsidy of $15 per tonne, if you have a forecast price today of $70-$75 it will take the minimum guaranteed price for sugarcane to about $90-$95 that will inspire a lot of confidence in farmers because the cost of productions has been going up – we did not do any adjustment.”
Dr. Biman says the EU funds that was with-held in 2017 because of the 2006 coup was supposed to help farmers to cope with the rising cost of production.
“If you’re in Seaqaqa, the average cost per tonne is about $40-$45 and if the farmers have a forecast price of $70 what do they get at the end of the day? Peanuts. And so what we are saying is about $22M-$23M into price support. The rest of the $50M – which is $26M to be put into cane development, into landowners premium, getting the leases renewed, increasing acreage, that’s how you’re going to rescue the sugar industry.”
NFP had proposed reprioritising budgetary allocations from the FRA or the International Golf Tournament to help the industry survive.