Beware sugar industry opportunism!
The Healthy Living Alliance (HEALA) is alarmed by the political opportunism of the sugar industry, supported by the vote-seeking Democratic Alliance (DA), in blaming its economic woes on a tax on sugary drinks introduced less than a year ago.
We urge the Members of Parliament in the Trade and Industry, Health and Finance committees not to be manipulated by powerful organised business to the detriment of our health.
The tax – called the Health Promotion Levy (HPL) – is designed to protect South Africans from our out-of-control consumption of fizzy drinks, which is contributing to 10,000 new diabetes cases every month, 240 daily strokes and poor oral health.
However, the sugar industry has been in crisis for more than a decade. The facts are clear:
- The world sugar price halved between 2009 and 2014 (from about US$600/ton to about US$300/ ton).
- The EU reduced its the export quota for sugar, which many southern African sugar producers had access to under the Lomé Convention, from US$524/ton in 2009 to US$335/ton in 2014.
- Sugar production in South Africa has dropped by around 33% between 2002 and 2012.
- Illovo reduced its workforce by 25% between 2009 and 2014.
- Three successive droughts have had a significant impact on cane production.
Three major sugar corporations – Tongaat Hullet, Illovo and Transvaal Suiker Beperk (TSB) – account for 90% of sugar production in the SADC region.
These three corporations have protected their profit base by increasingly outsourcing sugar cane growing to small farmers – called outgrowers – who assume all the risk and have borne the brunt of successive droughts. The proliferation of black small-scale sugar cane growers has benefited the industry far more than most farmers. In the 1990s, there were about 50,000 small farmers but this has plunged to 20,500 registered small growers as drought and debt have taken their toll.
Today, Illovo and Tongaat Hulett both source more cane from other sub-Saharan countries than South Africa because labour costs are cheaper. Regional production of sugar cane totaled 36 million tons in 2012, and South Africa’s share of total regional production dropped from 60% in 1992 to 40% in 2012. This is driving local job losses not the HPL.
The case for sugar is not going to get better.
Sugar production requires large volumes of water, which is unsustainable in a water-poor country getting drier with climate change.
There is also a global trend towards producing food and drinks with less sugar, which is an essential health imperative. Even the sugar-sweetened beverage industry, including Coca-Cola Beverages SA, have acknowledged that excessive sugar intake is a health risk and have committed to reducing sugar in their products.
It is clear that the sugar industry needs to diversify to survive, and this is where the support of government is important. There are a number of possibilities.
Ethanol production from sugar is one. The EU and US both have mandates to include biofuel ethanol in petrol. South Africa, Tanzania, Mozambique and Zimbabwe have also talked about ethanol blends over the past three years. A requirement for one per cent ethanol in South Africa’s market for petrol fuel is estimated to be equivalent to 180,000 tonnes of sugar (about one per cent of total sugar output in South Africa).
Electricity generation for sale to national grids is also possible.“Mills typically generate 90 per cent or more of their own electricity requirements by burning the cane residue following sugar extraction,” according to academics Alex Dubb, Ian Scoones and Philip Woodhouse writing in The Political Economy of Sugar in Southern Africa.
“Improving efficiency, and the possibility of retrieving more biomass by not burning the cane in the field before harvesting, raise opportunities for producing surplus electricity for sale. All three major sugar producers are increasingly using their sugar production as a feedstock for a biochemical industry with a diverse range of products.
“Land is also a significant part of wider business portfolios. Acquired in the past for sugar cane production, often with state support, areas are now being sold off as part of real estate deals.”
In addition, the land currently used for sugar cane production can be better used to cultivate more nutritious crops.
The sugar industry’s short-term, profit-driven approach does not have the long-term wellbeing of South Africans at heart.
HEALA supports a country where nutritional food is grown by small farmers to sustain healthy living. We call on government to put our health first and work with the sugar industry to find solutions that do not compromise our health.
Issued by: The Healthy Living Alliance
From more information, contact: Thando Lamula (011) 880 0995
Alex Dubb (2015). Dynamics of decline in small-scale sugarcane production in South Africa: evidence from two ‘rural’ wards in the Umfolozi region. Land Use Policy 48, 362 – 376 http://dx.doi.org/10.1016/j.landusepol.2015.06.029
Alex Dubb (2016) The Rise and Decline of Small-Scale Sugarcane Production in South Africa: A Historical Perspective, Journal of Agrarian Change, Vol. 16 No. 4, October 2016, pp. 518–542. doi: 10.1111/joac.12107
Alex Dubb, Ian Scoones & Philip Woodhouse (2017) The Political Economy of Sugar in Southern Africa – Introduction, Journal of Southern African Studies, 43:3, 447-470, DOI:10.1080/03057070.2016.1214020 https://www.tandfonline.com/doi/full/10.1080/03057070.2016.1214020
Stephen Greenberg (2017) Corporate power in the agro-food system and the consumer food environment in South Africa, The Journal of Peasant Studies, 44:2, 467-496, DOI:10.1080/03066150.2016.1259223
Greenberg et al (2017) ‘Trade, food and nutrition security in South Africa: The cases of sugar and poultry’, Working Paper 46. PLAAS, UWC: Cape Town.
Paul James & Philip Woodhouse (2017) Crisis and Differentiation among Small-Scale Sugar Cane Growers in Nkomazi, South Africa, Journal of Southern African Studies, 43:3, 535-549, DOI: 10.1080/03057070.2016.1197694
Alex Myers, David Fig, Aviva Tugendhaft, Jonathan E Myers & Karen J Hofman (2017): The history of the South African sugar industry illuminates deeply rooted obstacles for sugar reduction anti-obesity interventions, African Studies, DOI: 10.1080/00020184.2017.1311515
Alex Myers, David Fig, Aviva Tugendhaft, Jessie Mandle, Jonathan Myers & Karen Hofman (2015): Sugar and health in South Africa: Potential challenges to leveraging policy change, Global Public Health: An International Journal for Research, Policy and Practice, DOI: 10.1080/17441692.2015.1071419
- Smith, S. Davis, S Madho and A. Chary, ‘Eighty-Eighth Annual Review of the Milling Season in Southern Africa’, Proceedings of the South African Sugar Technologists’ Association, 86 (2013), pp. 24–54.)
Thow et al (2017) ‘Food trade and investment in South Africa: Improving coherence between economic policy, nutrition and food security’, Working Paper 50. PLAAS, UWC: Cape Town
The Healthy Living Alliance (HEALA) is an alliance of organisations and thousands of interested South Africans with this mission in mind. Its current member organisations are: Health-e News Services, Health Promotion and Development Foundation, Khulisa Social Solutions, Rural Health Advocacy Project, Section 27, South African Dental Association (SADA), South African Paediatric Association (SAPA), Society for Endocrinology, Metabolism and Diabetes of South Africa (SEMDSA), Amandla.mobi and Treatment Action Campaign (TAC).