Sundaymail Editor
The GOVERNMENT has objected to the selling of the country’s biggest sugar producer, Tongaat Hulett, to Kagera Sugar, a Tanzanian sugar producer, as part of a plan to rescue the group, which has struggled for survival since 2019. Treasury Secretary Mr George Guvamatanga recently wrote to Tongaat’s administrators, questioning the decision to pick the East African company as the buyer of the country’s biggest sugar estates. The Sunday Mail (SM) interviewed Mr Saul Chin’anga (SC), the spokesperson of the Zimbabwe Sugarcane Development Association (ZSDA) — one of the country’s largest sugarcane farmers’ representative organisations — on this development and other issues facing the sector.
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SM: Tell us about the constitution of the Zimbabwe Sugarcane Development Association, focusing on what the body stands for and who it represents.
SC: The Zimbabwe Sugarcane Development Association is an association of sugarcane outgrower farmers based in the Lowveld.
Our role and objective as an association is to protect and advance the interests of our farmers. We represent outgrower farmers who are in three milling groups, which are Triangle, Hippo Valley and Mkwasine.
We are the voice of sugarcane farmers.
We are involved in advocacy work. Farmers have issues that affect them, so we represent their rights in meetings with the authorities.
Our objective is also to improve and increase the productivity of our farmers.
This is in terms of sugarcane output.
We actually have an objective to increase our productivity by five percent this year.
Through our work, we engage stakeholders in the sugarcane value chain.
These include millers, the Zimbabwe National Water Authority (Zinwa), the National Railways of Zimbabwe (NRZ), Zesa (Zimbabwe Electricity Supply Authority) and input suppliers. These players are very critical in the sugarcane production value chain.
For example, our crop is not rain-fed, it is all irrigated, making Zinwa a key stakeholder.
Over 12 months, sugarcane has to be attended to because it’s an all-year crop.
So, stakeholders such as Zinwa are critical because they have to be available to supply water. Some of our crops are irrigated using electricity, so power must be always available when needed.
The same goes for NRZ, which provides haulage services.
When you harvest your sugar, you cannot keep it on the farm for two or three days because you are losing the quality of the crop.
So, NRZ has to play its part by making sure that the sugarcane, once harvested, is collected and taken to the miller without delay.
In terms of supplies of inputs, we have to make sure we bring in fuel suppliers and many other players, We have to make sure they are playing ball.
No matter how much effort you put into pushing farmers, if these other players are not playing their role, it’s going to waste.
So, we have to make sure that all these players are playing their roles.
So, in broad terms, this is what we do as an association.
We fight for our farmers, we advocate for our farmers, and we engage with different stakeholders to make sure our farmers are given requisite attention for purposes of improving production.
SM: The Government is presently on a drive to develop new water bodies countrywide. How will such a programme help in improving sugarcane output in the country?
SC: First of all, when you look at water bodies, particularly those in the Lowveld, Masvingo province, their impact is not just on sugar. The impact is usually on the gross domestic product (GDP) of Masvingo, in line with the Government’s devolution agenda.
Take Tokwe Mukosi Dam as an example, which, as a province, we are fortunate to get.
It unlocks vast economic opportunities and we are very thankful to Government for establishing such water bodies.
As I mentioned, our sugarcane is not rain-fed.
So, if the Government comes in and develops water bodies, they become an enabler of sugarcane production.
It means we have additional capacity to produce more sugarcane.
It means we have additional capacity to increase our sugarcane production.
SM: How far has the involvement of smallholder indigenous farmers in sugarcane production helped improve the livelihoods of rural people, in line with the Second Republic’s mantra of leaving no one and no place behind?
SC: First of all, just the aspect of having been allocated land is massive on its own; it is transformational.
So, the first thing we look at is the availability of land to farmers, particularly in an area that was predominantly a preserve of white farmers.
That opening up of that sector is very important.
Beyond that, you will notice that the Second Republic has declared sugarcane a strategic crop and we have started seeing the benefits of that declaration.
This has come in the form of support, which includes the supply of Zimbabwe dollar fuel, though at the moment, it is in small quantities.
But the gesture is appreciated and we believe, as we move forward, we will begin to see more benefits coming.
I am mentioning this to develop the point that through these initiatives, we see the livelihoods of sugarcane farmers improving as they increase their productivity.
We see sugarcane farmers increasing their efficiency and when they increase their efficiency, it means they are improving their productivity, and incomes, in line with the Government’s agenda of leaving no one behind.
This is also in line with the Government’s agenda of achieving an upper middle-income economy by 2030.
Already, you can see that sugarcane farmers are a step ahead in that respect. So, we are very thankful to the Second Republic for these initiatives.
We believe, as we go into the second term, we will be able to unlock further benefits, as we explore exports.
SM: Last season, hundreds of Lowveld sugarcane farmers delayed harvesting their crop on account of payment disputes with Tongaat Hullet. Can you take us through what that dispute entailed and how far you have gone in resolving it?
SC: It was not last season, as it were.
It was actually the beginning of this season.
The sugarcane season runs from April to March.
When the new season started, farmers withheld their sugarcane.
The reason was that, at the time, farmers and Tongaat Hulett were discussing issues to do with the sugar producer price.
As you know, with maize, the Government gazettes the producer prices so that farmers know how much they are going to get for their crop at the end of the season.
However, with sugarcane, the price is negotiated through a milling agreement and cane purchase agreement (CPA).
On both ends, the two agreements were not available and it appeared to farmers that the miller was dragging his feet by not setting the price.
Farmers felt it was not proper for them to supply the crop without the producer price.
Fortunately, we ran around as farmers’ representatives, along with the miller, and we managed to come up with an agreement through an arbitration process.
We came up with the milling agreement and CPA.
So, those agreements are now in place and the farmers started to supply the crop.
There are still other issues we are looking at and we hope we will address them during this season.
But in respect of issues at the beginning of this season, it had to do with the absence of those supplier agreements.
SM: Tongaat Hulett, which is the sole owner of Zimbabwe’s two sugar mills, is currently in the process of being sold to Kagera Sugar of Tanzania, a development that has been challenged by the Government. Do you think Kagera is a suitable buyer of an asset of such significance to the national economy?
SC: We do not know much about Kagera.
Despite producing 40 percent of the country’s sugarcane, we were never consulted about the deal.
We have never been consulted by Tongaat Hulett and whoever is facilitating that transaction.
So, we do not know what they represent and what their aspirations are.
We only got to hear of the transaction through the press, just like everyone else.
Our expectation, as farmers, was that, in light of the contribution we make to the industry, we were also going to be consulted or even be part of the process.
We were expecting to give our opinion on Kagera and also on their merits.
As it stands, we don’t know the merits of the Kagera proposal and we never had sight of that proposal.
So, we are glad that the Government has challenged that transaction.
We felt someone had to stand up and question what was happening and we were very excited that our Government had done just that.
They have stood up!
They have raised questions and we are happy about that.
We are now waiting to hear from them and we believe, as stakeholders, we should be part and parcel of what is happening.
SM: The Government has, on its part, proposed buying the Tongaat Hulett estates through the Sovereign Wealth Fund (SWF). What is your view of that bid?
SC: We believe that the Government intends to ensure that locals are involved in the ownership of a local asset.
I believe, as the Government is running this process, they have, at the back of their mind, the 1 200 sugarcane outgrowers in Chiredzi.
So, we are really hopeful that efforts to acquire the assets will materialise with a view that we will also participate in the process. We don’t believe that Government wants to buy it for itself.
We believe Government wants to be a broker for locals, particularly the sugarcane farmers.
It only makes sense that the farmers are also involved and also play a role in horizontal integration.
We know Tongaat Hulett are also sugarcane farmers; they have sugarcane estates.
So, horizontal integration of farmers and Tongaat Hulett will bring a win-win arrangement.
The coming in of the Government within this transaction is very important because we see ourselves in that transaction, through the Government.
We are quite eager to see how it develops.
SM: What other strategies do you think the Government should pursue to enhance local sugarcane production?
SC: I think the first one, which is the biggest one, is the banning of imports; that will help us a lot.
Number two, the cost of sugarcane production is very high.
This is because it is a 12-month crop.
This means a farmer is pumping money into the crop for 12 months non-stop, then gets their return in the 13th month.
Compared to other crops such as tobacco or maize, which have smaller production cycles — three months — it means sugarcane farmers need deep pockets.
What we have seen in other countries that are big sugarcane producers — for example, India and Brazil — farmers are subsidised.
This is something we hope to see happening in Zimbabwe in the future.
In addition to that, we also hope to see the establishment of funding schemes for sugar farmers.
We also want the same programmes that Government is running with banks such as CBZ, which are funding farmers of other crops such as maize and tobacco.
Then there is the issue of tenure.
We want the Government to issue farmers with 99-year leases and we hope Government will bring these on board.
If we get those leases, we may be able to go to banks and negotiate for finance
The last one relates to milling.
The two mills in the country are owned by one company.
So, that creates a monopoly, which is a very difficult environment to operate in.
When there is competition, everyone stands to benefit.
But when you have a monopoly, you get a lot of inefficiencies.
We are advocating an additional miller to provide completion.
We believe, as more water bodies are opened, more land is unlocked. As more capacity is opened, there is a need for another miller so we improve efficiencies.
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