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Sugar Industry Agreement Amended

June 25, 2020

Department of Trade, Industry and Competition

The Constitution of the South African Sugar Association and the Sugar Industry Agreement of 2000 have been amended.

The trade, industry and competition department published the amendments in Government Gazette 43466.

They were drawn up in terms of the Sugar Act.

The notice also announces that the sugar industry has, in terms of Section 10 the Competition Act, been designated for 12 months.

The designation of an exemption is intended to support the economic development, growth, transformation and stability of the sugar industry in line with the objectives of the proposed Sugar Masterplan.

The department confirmed that a Sugar Masterplan has been developed.

“It requires a set of collaborative actions by stakeholders in the industry, which in turns require an appropriate exemption from certain provisions of the Competition Act, given that collaboration between competitors is not ordinarily allowed in terms of the Act.”

The Masterplan aims to “create a diversified and globally competitive, sustainable and transformed sugarcane-based value chain that actively contributes to South Africa’s economic and social development, creating prosperity for stakeholders in the sugarcane value chain, the wider bio-economy, society and the environment”.

Phase 1 of the plan will run for three years.

During phase 1, industrial users and retailers of sugar have committed to minimum levels of locally grown and produced sugar and sugar producers have agreed to price restraint during the period.

In year 1, a detailed sugar industry restructuring plan must be developed and put into operation.

Key amendments to the Constitution and Agreement include that the new agreement will run from 1 July 2020 until 31 March 2024; affairs of the Association to be administered by a Council consisting of an independent Chairperson; members of the Association to be the South African Sugar Millers Association (SASMA), South African Cane Growers Association (SACGA) and South African Farmers Development Association (SAFDA); 18 delegates to represent each Section, provided that SACGA and SAFDA shall each be entitled to appoint 9 delegates to the Growers’ Section and all questions arising at general and special meetings of SASA shall be determined by a majority representing at least two-thirds of the delegates present at the meeting, provided that such majority includes at least 1 vote from the Millers Section and the Growers Section.

The notice comes into effect on 1 July 2020.

In a statement, the trade, industry and competition minister, Ebrahim Patel, declared that, “given the crisis facing the South African sugar industry, one that threatens tens of thousands of jobs and hundreds of thousands of livelihoods, government has, together with industry stakeholders including producers and users of sugar, developed a masterplan to enable the industry to restructure and grow”.

According to the department, annual sugar production in South Africa has declined by nearly 25%, from 2.75 million to 2.1 million tons per annum, over the past 20 years with sugarcane farmers declining by 60% and sugar industry-related jobs reducing by 45%.

The process to produce the Master Plan was co-chaired by both minister Patel and the agriculture, land reform and rural development minister, Thoko Didiza.