26 May 2015: Media Release – Government must top up 4th cane payment

Government must top up the fourth cane payment to $15 per tonne of cane, which is due to be paid to cane farmers at the end of this week.

Government should direct the Fiji Sugar Corporation to top up the payment because the FSC’s line of credit with ANZ has been extended by another 5 years through parliamentary approval of a government guarantee of $120 million. FSC therefore is in a position to obtain short-term funding.

The total price paid so far for the 2014 harvesting and crushing season is $65.29 per tonne of cane. Both the Prime Minister and Fiji Sugar Corporation Chairman have stated the total price for last season would be around $73 per tonne of cane. This means a sum of almost $8 would be split between the 4th cane payment and the final payment in October, with bulk of this meagre amount to be paid in the 4th payment.

A $73 per tonne total payout for last season would mean a reduction of a little over $15 per tonne of cane paid to farmers for the 2013 season. The price paid to farmers was $88.49 including a special payment of $5 per tonne.

A reduction to $73 would mean a loss of $27 million to farmers in direct income. This will be massive and have an adverse impact on the livelihood of farmers as well as their capability to increase cane production because such a reduction would be extremely demoralizing.

A $15 top up to the fourth cane payment will boost the final expected price of $73 for last season to over $80 per tonne. That would leave the final payment and another top up will be necessary to ensure a minimum guaranteed price of $85 per tonne.

The National Federation Party has been repeatedly calling on government to implement a minimum guaranteed price of $85 per tonne for the next four years and this top up will instil confidence in farmers to increase cane production.

Increasing cane production is the prerequisite to the survival of the sugar industry and the livelihood of 200,000 people in the future. This is vital if we are to overcome the abolition of the European Union sugar production quota at the end of September 2017.

And simultaneously with a minimum guaranteed price, government should bite the bullet and accept the fact that unilaterally imposing solutions aimed at reviving the industry will fail. It needs a bi-partisan approach and collective will of every stakeholder. That is why a parliamentary committee on sugar is vital and we repeat our call to the Prime Minister to initiate moves for the committee’s formulation in the next scheduled sitting of parliament from 6th July.

We therefore request Government to direct the FSC to top up the 4th cane payment so that farmers are able to better and confidently prepare for the 2015 harvesting season.
Biman Prasad
Leader