Growers like Gyan Deo may be the reason why Fiji’s sugar industry will still have a future in the next half a century.
Like the bulk of the country’s 12,000 sugarcane growers, Deo works his 12-acre farm in rural farmland, outside Nadi town, on the west coast of Fiji’s main island.
“If I can get 300 tonnes from this year’s crop, I would be happy,” said Deo. “I might not have a lot in my take home pay, but at least I would be able to pay my cane cutters, and meet my fertiliser, delivery and other costs.”
At the current Fiji government guaranteed price of F$85 (US$40) per tonne, the Nadi farmer should expect a gross income of F$25,500 ($11,800).
Unfortunately for him and the Fiji Government, such feelings of optimism among cane growers are not contagious.
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Fiji’s Sugar Cane Growers’ Fund (SCGF) is calling on Fiji’s working population to buy sugar cane farms, as more farmers go out of business and defaulters plague its loans portfolio.
SCGF’s chief executive officer Raj Sharma told Islands Business that the fund currently has 11 cane farms on mortagee sale, with some going for as low as $15,000.
And it is inviting members of the Fiji National Provident Fund – who can now also borrow from SCGF – to consider investing in these properties or cane farming in general.
“If someone has found a farm in the Western or Northern Division and has agreed with the owner on a price, you can go to FNPF to check your housing eligibility and if more money is needed, we can lend that balance to you based on our lending criteria. And you become a registered canefarmer,” Sharma said.
Yesterday, SCGF’s status as one of FNPF’s approved lenders was officially announced by the two parties and is a fresh attempt to encourage participation in an industry that is slowly buckling at the knees from decades of politicisation and unaddressed infrastructure deterioration.
Sugar has, over the years, lost its status as Fiji’s major agricultural commodity, export earner and employer, supporting almost a quarter of the national population.
Total lending by commercial banks and credit institutions to the industry has dwindled from what used to be over $10million in the early 2000 to a mere $1.6million in 2018, according to Reserve Bank of Fiji data.
Sugar exports too have been inconsistent.
RBF’s provisional estimates anticipate a huge drop in sugar export earnings for 2018 – from a projected $178.6m in 2017 to just $78.5m.
If this happens, it will be the second time since 2000 that sugar’s annual revenue has dropped to below $100m – the last time was in 2010, when sugar exports fetched only $70.1m in export earnings.
These days, the industry is struggling to keep its three sugar mills afloat as millions of dollars in losses are recorded by the government-owned Fiji Sugar Corporation, who owns the mills and buys the cane.
Farmers are also leaving the land – their population had dropped from over 18,000 in 2008 to a little over 16,000 in 2017, according to FSC’s 2018 Annual Report.
Old issues such as burnt cane and low sugar quality are now joined by a new problem in termites that suck cane dry well before harvest time, causing thousands of dollars in losses for farmers in the Western division.
As a lending institution set up by government in 1984 to cater specifically for cane farmers, the SCGF has also been sorely hit, with around 15 percent of its $30m loans portfolio attributed to farmers defaulting on their loans, according to Raj.
Not only is it inviting FNPF members to buy sugarcane farms, SCGF is also begging defaulting farmers to stay on through a ‘back to farm’ incentive package it launched yesterday.
“That applies to farmers who can’t pay their loans. Instead of taking legal action against them, we're telling them to come back to the farm, we are giving you interest-free rates plus $2,000 to restart the farm. That starts today (yesterday) and goes on for the next 3 months. It ends on December 31,” Raj said.
These farmers too can now use their FNPF housing eligibility to pay off loans arrears.
FCGF has over 16,000 registered cane farmers, of which, according to Raj, around 11,400 are active producers and who benefit from FCGF’s loans services.