Sometimes learning can be devastating. A case in point is our sugar industry. Here we sit with a near perfect climate, ideal land, and all it takes to run a fantastic sugar industry, providing the livelihoods for thousands and driving our own sugar exports, and instead our sugar industry is in tatters.
For the unlearnt fact at the core of all the livelihoods lost and industry imploded as that ‘fixing’ an industry in ways that cripple the producers cripples the industry.
Yet even as the idea of a conflict between raw material producers, processors, traders and consumers still holds our policy makers - in the belief that politicians need to intervene and protect, say, the processors - it has long since been proven moribund. Our milk industry is just a single case study that proves the power of throwing away the price fixing and market strait jackets and instead turning to maximising market access and development. The outcome has been ballooning production and sales.
Indeed, we and all the rest of the world have jacked in nearly all of the state-wide pricing and market fixes for agricultural commodities, and agriculture has risen far and wide.
But for some reason, here we are in 2019, still debating how we ‘fix’ the pricing of sugar, calling it an ‘agreement’ without the sellers having ever agreed to it, and then forcing them, even beyond their unagreed agreement, to sell to only one single supplier, as a matter of law, under the charmingly designated idea of ‘zoning’.
The whole is so archaic and arcane, it’s difficult to credit that our highly educated and dynamic technocrats, and most especially within the president’s office, are still playing around with all this monopsony price-fixing nonsense – they all know it’s a dead hand on any vibrant industry. So why are we even stuck in this black-and-white 1960s movie rerun?
The best hope, for any consumer genuinely interested in cheaper sugar, is that the whole old-fashioned, lopsided ‘agreement’ gets tipped into the sugar bin in this long overdue and final reckoning with how we have killed our sugar industry.
Instead, we can decide not to do more of the same and not to destroy even the last vestiges of a once backbone industry, and seize this moment to genuinely enable sugar production to flourish. As it is, our sugar yields have tumbled. It’s not just that we’re growing less sugar on less acreage, but we’re growing it less well. Our attention to extension services and farmer training has departed, it seems, apparently as part of our general sugar production funeral cortege.
Likewise, research has died. Studies show that for every dollar spent on agricultural research the payback in increased productivity, livelihoods and economic growth is a phenomenal multiple. Yet in reconciling all of our previous agricultural researchers into a single body we didn’t set any proportions around what should be researched – so sugar died there too. We stopped the sugar levy, and aren’t any longer racing to provide road and market infrastructure to enable market access for sugar farmers.
Our largest producer has done its bit too in providing a company that can only work by not paying for its supplies - and cannot work when it has to.
Indeed, the whole of our sugar debate seems to be substantially about badly run and mismanaged sugar mills, in truth. Peel away the noise and rhetoric, and we seem to have been playing a long-term game of – ‘oh, we can’t function if we have to pay market rates for our raw materials’.
So, let’s just stop. Let’s look, instead, at why production costs and prices are so high, and use a sugar levy to get the production prices down. There is nothing inherent about sugar itself that means we have to produce at half the yield levels of, say, Egypt. In fact, our natural resources are more advantageous.
For sure, when you beat a horse until it can no longer move, more of the same will most definitely kill it. The only question now about our sugar horse is: Can we actually restore its health with some care and attention? And there lies the task that needs some force.
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Note: The results are not exact but very close to the actual.
