The SA Canegrowers Association (SACG) and the South African Farmers’ Development Association have called on Finance Minister Tito Mboweni to suspend the sugar tax, pending an assessment of its socio-economic impact.
The tax, also known as the ‘health promotion levy’, had already cost the sugar industry in the region of R1,5 billion since its implementation in April 2018, amounting to jobs losses in the region of 9 000, said SACG chairperson Rex Talmage.
‘The financial and human costs are escalating, and rapidly: in February 2019 industry costs were nearing R1 billion, and consequent job losses were expected to be in the region 6 500.’
The industry was ‘currently on its knees’.
‘Weak protection against cheap imports, drought and plunging sugar prices are already hurting the sugar sector. The sugar tax, if not reconsidered by Treasury, will be the kiss of death for an industry that supports one million livelihoods.’
Talmage said the most vulnerable in the sector were small-scale sugarcane farmers and farmworkers, ‘because they have few, if any options, meaning that any decrease in local demand for sugar will ensure the demise of their businesses’.
He said the ‘resultant decay and degradation of our deep rural areas in KwaZulu-Natal and Mpumalanga could prove catastrophic to these communities’.
Talmage noted that the government had acknowledged the ‘crisis’ in the sugar industry and was working with SACG on a master plan ‘to rescue the situation’ – but added that no rescue would be possible ‘with the current sugar tax in place’.