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The Portfolio Committee on Trade and Industry yesterday heard that the protectionist strategy for the sugar industry needs to be phased out in favour of one based on competitiveness.
This follows engagements held between the industry and the Minister of Trade and Industry, Mr Ebrahim Patel, and Minister of Agriculture, Land Reform and Rural Development, Ms Thoko Didiza.
Stakeholders agreed to an export-led approach targeting the African market through the implementation of the African Continental Free Trade Agreement (AfCFTA) to support industry competitiveness.
The Department of Trade and Industry emphasised the need for the sugar industry to diversify its product offerings to include ethanol, using sugarcane for co-generation of electricity and bio-based plastic products, among other things. The industry faces ongoing global and domestic challenges, such as a low global price, competition from sugar imports, high input costs and lower demand for sugar since the health promotion levy on sugar-sweetened beverages was introduced. Thus, the over-reliance on sugar production without investing in alternative products is unsustainable.
The Chairperson of the committee, Mr Duma Nkosi, welcomed the inter-departmental approach to developing a diversification plan to address the short-term challenges facing small-scale cane growers, and to develop a long-term strategy for the industry. The finalisation of the diversification plan should be completed by March 2020 and implementation should commence in April 2020.
The committee reemphasised that transformation across the sugar value chain must be expedited, along with the amendments to the South African Sugar Association’s constitution and the Sugar Industry Agreement.
The department, in collaboration with the South African Sugar Association, is committed to fast-tracking the processes to ensure the current regulations are amended before 31 March 2020. Failure to achieve this would result in the transformation advances that have been made being undermined. The committee welcomed the progress that has been made thus far, and has committed itself to continue its oversight over the industry.
Issued by the Parliamentary Communication Services on behalf of the Chairperson of the Portfolio Committee on Trade and Industry