dyton mupawaenda
George Maponga-Masvingo Bureau
Lowveld sugar producer Tongaat Huletts Zimbabwe has reaffirmed its commitment to creating a viable sugar industry for the country’s benefit and expressed optimism that the current stand-off between the sucrose maker and over 1 200 out-grower farmers over the payment mechanism for cane deliveries in the current milling season will soon be rectified.
Out-grower farmers, who are beneficiaries of the land reform programme, have been singing the blues, with most facing bankruptcy owing to what they said was a skewed payment model by Tongaat.
Commercial cane farmers at Mkwasine, Hippo Valley, Triangle and Mupapa, among other cane-growing blocks in the Lowveld, were being paid for their cane using a Milling Agreement which entails that the farmer owns their milled sugar until it is disposed off in the shops, with Tongaat only providing milling services charged at 27 percent.
Farmers, beginning the impending 2023/24 milling season that was scheduled to start at the beginning April, want to be given a choice between a Milling Agreement and a Cane Purchase Agreement.
The Cane Purchase Agreement entails that out-growers simply sell their sugar cane to Tongaat and get paid once-off an agreed fee per tonne of delivered cane.
The stand-off with Tongaat has resulted in out-growers delaying cane harvesting for the current milling season seeking to press for an agreement first.
Farmers say delays in harvesting by out-growers who account for 45 percent of Zimbabwe’s aggregate sugar cane production will not hurt local supplies as there was a surplus carried over from the prior season which closed on 31 March.
A high-powered ministerial delegation is expected in Chiredzi to try and hammer an agreement between Tongaat and the farmers.
There are also reports farmers were threatening to forcibly close the country’s only two sugar mills at Hippo Valley and Triangle to pave way for talks to strike an agreement.
Tongaat Corporate and Industry Affairs Executive Dr Dahlia Garwe expressed hopes of a breakthrough, dismissing assertions that the Lowveld sugar producer was bent on short-changing out-growers.
He said Tongaat had started harvesting its cane for the new milling season, saying she was optimistic that out-growers will soon follow suit.
“Harvesting of cane has commenced from the miller’s (Tongaat) side and we are looking forward to delivery of cane from the farmers at the beginning of May (this month),” she said. “We are currently in discussions with the farmers regarding a pricing arrangement for cane delivered to the mills.
“We firmly believe in a fair and equitable mechanism to pay the farmers that will allow them to be successful and viable. It is also important to note that farmers play a key role in industry (sugar industry) decisions involving pricing of sugar, with the current chair of the Pricing and Marketing Committee being a competent farmer.
“A viable industry would benefit not only the farmers and the company, but also local communities and the country as a whole. We will continue to uphold the tenets of ethical, fair and professional conduct in business because that is the only way our industry will survive.’’
Dr Garwe said the way forward for the industry was predicated on the outcome of an arbitration process facilitated by Government through the Ministry of Industry and Commerce.
“As indicated above, the millers (Triangle and Hippo Valley) are in discussion with the farmers with the intention of agreeing on a payment mechanism for cane delivered,” she said. “It is important to note that there was an arbitration process that was facilitated by the Ministry of Industry and Commerce that took place.
“The award was only given on 13 April and we are now looking at complying with the terms of the award. ‘We have been approached by farmers with proposals on both a cane milling agreement and a cane purchase agreement. It is our expectation that we will reach an agreement with the farmers on the way forward in the next few weeks.’’
Dr Garwe revealed that Tongaat had not offered farmers a price for their cane under a cane purchase agreement, saying the sugar miller had only “shared with them a draft of an agreement negotiated in the past with another cane supplier.’’
This, Dr Garwe said, was only meant to guide discussions between Tongaat and out-growers.
While she was not at liberty to discuss the finer details of a deal between Tongaat and Greenfuel, which grows cane in Chisumbanje and at one time supplied the Lowveld sugar maker with cane, Dr Garwe said the company last supplied its cane three years ago.
Tongaat also pledged to continue assisting out-growers to ramp up sucrose output, with Dr Garwe saying an out-grower extension scheme was in place to help ramp up yields.
“The company (Tongaat) has in the past and continues to today, to offer technical assistance to the farmers through the Out-grower Extension scheme,” she said. “The main aim of the scheme is to help farmers to increase their yields and efficiencies. By so doing, farmers will see a substantial increase in their revenues.
“The company works with the Zimbabwe Sugar Association and the Zimbabwe Sugar Sales Boards, on which the farmers are represented, to review sugar prices. It is in the interests of both farmers and the company that the sugar price supports viability on the farms.
“In other countries, when the sugar price is not viable or economic fundamentals are unstable, the government extends direct and indirect subsidies to cushion farmers.’’
While the sugar industry was not insulated from the prevailing harsh economic climate, Tongaat was optimistic that the local industry will continue to adequately satiate local needs as evidenced by surplus sugar carried over from the prior year into the current milling season.
Ramping up productivity was one of the ways to cushion farmers from effects of high input costs.
Tongaat also remained committed to the Kilimanjaro Sugar Project that will benefit indigenous new farmers as part of Government’s empowerment drive.
“The Company is committed to seeing the sugar industry grow for the mutual benefit of all stakeholders as evidenced by the current co-management framework (under which the traditional chiefs are benefiting), Pezulu Project, the 700ha Project Kilimanjaro Empowerment Block and the ongoing development of the 3 300ha that will benefit new farmers,’’said Dr Garwe.
“In addition, the Company has an extensive out-grower Extension Support scheme that assists willing farmers with technical aspects of growing cane, facilitation of inputs on credit and provision of stop order facilities for farmers.’’
Online Reporter