HomeBusiness DigestBad govt policies haunt sugar production

Bad govt policies haunt sugar production

Eric Chiriga

THE current shortage of sugar is due to the incompetence of new farmers and the price controls imposed on the commodity by government, the opposition says.



erdana, Arial, Helvetica, sans-serif”>MDC shadow minister and former Grain Marketing Board general manager Renson Gasela said settling of new farmers on Mkwasine Estates caused a reduction in the production of sugarcane.


“Besides failing to take up the land they had been offered,” Gasela said, “those A2 farmers who took up the land are producing sugarcane that is well below standard.”


Gasela said this in paper titled “The future of sugar production in the wake of land reform”, dated July 7.


He said the future of A2 farmers was bleak because they do not have the required resources to carry out sugarcane farming.


“It is obvious the A2 farmers, without sufficient capital, without equipment, with no experience and working individually, will not be able to survive,” Gasela said.


He said although 2 700 hectares had been allocated, about 50% of those just left one or two people to look after their property.


This has left a lot of the cane in a very bad state. A lot of it cannot be used at all.


“It is a very sorry state to see sugarcane fields full of stunted drying cane when there is so much water around, flowing in canals.”


He also said the National Railways of Zimbabwe was failing to move the sugar to the markets.


Sugar could be moved to Harare by rail via Gutu in Masvingo, but the parastatal is unable to because of the controlled price of sugar, which makes it uneconomic to do so.


Gasela said another factor contributing to the shortage were large quantities of sugar exported illegally.


At the start of the sugar-milling season annually, government allocates quantities of sugar to be exported, including a quantity set aside for indigenous exporters.


Sufficient sugar is then reserved for the local market.


“There are however well connected sharks who smuggle and export from local stocks,” he said.


“The authorities should prove me wrong through an independent audit,” he added.


Gasela said the selection of the new farmers was political and many of them were likely to move from sugarcane production into irrigated maize.


However, completely irrigated maize could only be profitable if sold as green mealies, Gasela said.


Mkwasine Estate is a sugar estate and was designed and developed to produce sugarcane.


Gasela said the acquisition of the sugar estates and subsequent allocation to those in influential positions in government and the ruling party would prove to be an unmitigated disaster.


He said Mkwasine now remained with 42% of its previous hectares and this was diminishing as more fields continued to be parceled out.


“The estate has now lost the economies of scale which enabled it to bear the cost of transporting cane to the mills.”


It was the size of the operation and economies of scale that enabled Mkwasine to subsidise Chipiwa settlers in the area.


The new farmers will now have to meet the full cost of transportation.

Mkwasine used to contribute 15% of national sugar production.


Triangle and Hippo Valley Estates had also been badly affected by the unplanned settlements and land appropriations.


The estate is being forced to lay off 50% of its workers and stop subsidies to the hitherto successful Chipiwa farmers. Alternatively, if economics of scale do not permit, it may be forced to close down.


Gasela said if Mkwasine closes down, that would be the end of sugarcane production and a loss of employment for about 2 000 people with over 10 000 dependants.


“The government is in the throes of achieving yet another ‘success’ by destroying the sugar industry as they have done to the other agricultural commodities, namely tobacco, maize, wheat, beef, dairy, horticulture,” Gasela said.


He said while there was talk of multiple farm ownership, in Mkwasine there were influential individuals who owned as many as 11 fields in some cases. “There are obviously many with more than one field but the policy is that each person is allocated one field.”


Each field is approximately 20 hectares.


The new farmers have an average yield of 40 tonnes per hectare. This was not enough to cover the cost of transportation let alone production costs and a profit, Gasela said.


Hippo Valley Estates said the land resettlement programme had disrupted their operations and would cause huge losses to the company and the economy as whole.


“The serious developments at Mkwasine Estate have greatly disrupted farming operations on 2 063 hectares currently occupied illegally,” Godfrey Gomwe, the chairman of Hippo said in the company’s annual report for 2004.


“Out of a possible 4 880 hectares,” Gomwe said, “the estate only managed to actively maintain 2 817 hectares over the last six months.”


He said the illegal occupations would cause substantial loss of sugar production and associated benefits to the company and the economy.


Hippo Valley North, consisting of 70% of the company’s sugarcane land, was first listed for compulsory acquisition in September 2000 and de-listed in October the same year.


Mkwasine was listed in August 2000 and de-listed in September 2001.

On March 22, both properties were relisted and applications for their de-listing were lodged on April 11, 2002.


Both properties were again listed for a third time on August 6 and 15 2003 respectively.

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