Land leases remain impediment to Fiji sugar industry growth
A Fiji academic says the focus on the Fiji sugar industry needs to be on improving infrastructure and removing impediments in the land lease rules that are being applied
The Fiji sugar industry is celebrating some good news with likely record payouts to cane farmers this season, but an academic warns there is still much to do to restore farmers' confidence.
Fiji's sugar industry has been going backwards for the past 12 years, but the Bainimarama regime has been trying to restore what has always been an important cog in the economy.
Last week it announced payouts this year will exceed 80 Fiji dollars, while mill efficiency has improved and the industry's Strategic Action Plan is being put in place.
But economics professor at the University of the South Pacific, Dr Biman Prasad, told Don Wiseman there are still major factors holding the industry back.
DR BIMAN PRASAD: I think there are still farmers leaving the industry and they're doing so for several reasons. One, of course, is the land issue. While government has put in a lot of effort and while there is this perception that land leases have been resolved to a large extent, I think there are still several issues at the farm level when it comes to renewal of leases. For example, farmers still need to pay premiums for lease renewals and many of them find this to be a challenge. So I would suggest that while government could be commended for looking at the milling sector, where the efficiency has improved, I think more focus needs to be put at the farm level and we need to restore much more confidence back to the farmers at the farm level to ensure that we have farmers who can produce cane in the future.
DON WISEMAN: If I could just go back to the price, initially, that the farmers are getting this year, it has been suggested that that's being subsidised, but you're saying that's not the case.
BP: I think the government did negotiate with the company which buys Fiji sugar. And I think you can give some credit to the government for making sure that the price that the farmers are receiving for the last season's cane is good and the forecast for this season also looks much more promising. So I think on that front we can say it is positive for the farmers and it may restore some confidence to those who are still in the industry. The issue, of course, is the cost of production and the cost of dealing with farm-level issues. And I think in the future, if government concentrates more on the farm, I think we can restore some confidence back into the industry.
DW: And the cost of production is steadily getting higher, not least, I guess, because of the cost of petroleum.
BP: Yes, I think the cost of petroleum is one of the key ones. But I think there are other issues. I think we need to spend a little bit more on the cane area infrastructure - cane roads and dealing with the issues of transportation and making sure there is better efficiency on the delivery of cane from the farm to the mill so that farmers can reduce costs there. I think there are issues about the high cost of fertiliser and that will have to be factored in, as well. But the farmers need much more assurance, and those that are coming nearer to the expiry of the leases, there would not be this extra burden of premiums which is stated to be between $6,000 to $10,000 for the renewal of lease. So I think some attention will have to be paid to those issues, as well.
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