Sugar Industry in South Africa

The European Union (EU) should reform without delay the way it subsidises sugar exports. It uses taxpayers’ money to subsidise large corporations and large-scale farmers, ruining the livelihoods of smallholder farmers in poor countries, and pushing them into poverty.

South Africa is a major sugar-producing country. There are around 50,000 small farms and 1,800 medium to large-scale plantations on the arc stretching from the province of Eastern Cape through Kwa Zulu Natal and Mpumlanaga. The sugar industry relies heavily on exports, with half of total production being sold on the international market. Large-scale export dumping of sugar by European countries drives the price of sugar down, causing pain for South Africa. According to Oxfam’s estimates, in 2002 alone, South Africa sustained losses of US$60 million because of lowered international sugar prices resulting from EU dumping.

Mzo Mzoneli, 63, is a self-employed sugar farmer in South Africa. Married with four children, Mzo Mzoneli has been cultivating sugar cane in Stanger, KwaZulu Natal province for ten years. Mzoneli’s family has a history of cultivating sugar cane dating back to the 1860s; the business has been passed down for several generations. Mzoneli formally took over the business after his father’s retirement.

There are ten members of Mzoneli’s family. They live in a five-bedroom house. In order to sustain the family, they have to pool all the family’s resources. It is impossible for them to live only on their income from cultivating sugar cane.

Mzoneli’s sugar refinery was set to begin operation in April but the opening was postponed to May due to the recent drought, making Mzoneli’s financial condition even worse. He is pessimistic about his future, saying that the situation is worsening year after year without a glimmer of hope.

It is very convenient to cultivate sugar cane in South Africa. Take Mzoneli as an example. His fields are not far from his home; and he can be sure that the finished products will be his. Nevertheless, in view of oversupply and EU dumping of sugar, Mzoneli worries that the price of sugar will remain low and he will have to give up his business one day.

Mzoneli said, “I cannot do anything other than growing sugar cane. At my age, changing jobs is almost impossible. Maybe I can grow other crops, but the land in this area is not so suitable for other crops. Maybe I can grow some vegetables, yet it will only be enough to feed my family.”

He added, “Low world sugar prices and the dumping of sugar are big problems. I would like to see all the sugar subsidies scrapped so that industry players in the world can compete fairly. European sugar farmers should grow something more suitable for their climate than beet sugar. That way, developing countries, especially smallholder farmers, can grow more sugar cane for the export market. My financial condition will definitely be improved then. I cannot grow anything other than sugar cane.”

He continued, “My children do not want to follow in my footsteps because they see how I have been struggling. They have no motivation to become a sugar farmer. I am disappointed, but I cannot blame them. I also worry about their future.”

“I am also concerned about the supply of food in South Africa in the future. Young people do not enter the farming industry because they do not think it can make money. Who will grow food for our country?”

“It is quite impossible for me to take a break. It’s too much of a luxury. Who will manage my farm if I do so? Who can guarantee that the harvest will be done efficiently and economically?”

“I keep working even when I am sick. If I am too sick, I will go to a public hospital since the consultation fees of private doctors are too high. However, the quota of patients in public hospitals is always exceeded. You have to wait for a long time – and may even have to be prepared to sleep on a bench.”

The EU dumps thousands of tonnes of beet sugar in poor countries every year. The beet sugar is produced with major government subsidies and sold at a price less than half of what it costs to grow in developing countries. It is impossible for poor countries to compete in the market even if their production costs are much lower than those of EU members.