The Deputy Minister of Trade, Industry and Competition, Mr Zuko Godlimpi, has called for a more coordinated and innovative approach to financing sugarcane growers, including smallholder farmers, as government and industry work to strengthen the sustainability and growth of the sugar value chain. He was speaking at the Sugar Industry Grower Finance and Government Engagement Workshop in Durban yesterday. The engagement focused on identifying the structural barriers that prevent growers from accessing finance and finding practical ways to make them more bankable.
“We need to have a conversation about what are the structural problems that make it difficult for funding institutions to give money to cane growers,” said Godlimpi.
He said government, financial institutions and industry should explore mechanisms that enable smaller growers to aggregate their holdings and collectively access finance, including through appropriate insurance and credit arrangements.
Godlimpi also emphasised the need to better align existing funding across development finance institutions and other funding sources, rather than simply seeking new sources of money.
“My instinct is not to look for new money. My instinct is to try optimise the existing money,” he said.
In addition, Godlimpi said that capacity-building and funding readiness should form part of the approach, particularly for growers who are unable to access finance because they do not yet meet funding requirements. He also highlighted the need to address insurance gaps affecting growers and to develop financing models that can support investment in areas such as renewable energy, infrastructure, mechanisation and diversification.
He noted that the transition towards new sugarcane-based opportunities, including bioethanol, would require the industry to demonstrate sufficient production capacity while protecting the supply of sugar for food security.
“We need to build this structural capacity to meet demand on both sides of the equation, sustain the tonnage you give to food and have enough feedstock for this thing that we’re talking,” he said.
The workshop was intended to inform further work on practical financing solutions for the sugar industry, with Godlimpi indicating that the discussions and recommendations would be taken forward for further consideration.
Distributed by APO Group on behalf of The Department of Trade, Industry and Competition, South Africa.