Canegrowers said it will continue to ensure that transformation funds are spent in an accountable and transparent manner. (Delwyn Verasamy/M&G)
A disagreement has erupted in the sugar industry about the amount of funds allocated to small-scale and black-owned growers after SA Canegrowers allegedly requested a reduction in transformation funding.
The South African Farmers Development Association (SAFDA) and the SA Canegrowers (Canegrowers) are at loggerheads as to how the R238.9 million allocated in transformation funding should be disbursed.
“The fund was used as a top-up for black small-scale growers and land-reform growers. Suddenly, the Canegrowers decided to propose a reduction of those funds by R30 million. They just decided we don’t need it anymore,” Siyabonga Madlala, SAFDA executive chairman, told the Mail & Guardian.
A statutory body representing the sugar industry, the South African Sugar Association (SASA) committed funding – called transformation funding – which would be paid out to small-scale and black-owned growers, as well as land reform beneficiaries, between 2019 and 2024.
This funding, which was distributed biannually over the five-year period, was meant to transform the industry and foster inclusiveness.
The last payment of R176-million was paid out in January. However, because the industry is still reeling from shocks caused by floods, Covid-19 and the ongoing crisis in parts of the milling industry, SASA committed another R238.9 million for the year.
The sugar milling industry faced a period of struggle in KwaZulu-Natal when the biggest milling company, Tongaat Hulett, entered into voluntary business rescue in 2022 after losing 95% of its value. This was due to a R3.5 billion accounting scandal over which former chief executive Peter Staude and a group of managers and accountants have been charged with fraud.
Black sugarcane farmers picketed outside the Canegrowers offices in KwaZulu-Natal on Tuesday holding signs that read: “Black growers want transformation funds to continue” and “Racist Canegrowers oppose benefits to black growers”.
Madlala said the Canegrowers were racist for requesting that the funds be reduced as they were a remedy to assist with the inequality in the sugar industry.
“It is a fight for justice; it is a just cause,” Madlala said.
Responding to Madlala’s allegations, Canegrowers’ chairman Higgins Mdluli told the M&G that the association wants transformation funding distributed to farmers when they deliver their sugarcane to the mill and to farmers who embark on regional projects that improve farming outcomes.
“SA Canegrowers do not want to reduce the transformation fund,” Mdluli said.
In a statement, Canegrowers said it will continue to ensure that transformation funds are spent in an accountable and transparent manner.
“We will also continue to stand for what is right and that is to ensure that the funds reach the intended beneficiaries and are not intercepted,” the statement read.
The South African Sugar Association said it is aware of the issue and that the matter is being dealt with on an urgent basis.