All is not lost on EU sugar reforms

THE price decline of sugar exported to the European Union (EU) under the new sugar reforms could actually expand the market for Swaziland, it has been observed.

Restructuring and Diversification Management Unit (RDMU) Team Leader Dr Christof Batzlen says with the price decline of sugar into the EU market, Swaziland could actually export more of its sugar as the market had become more competitive.
He was speaking during a media briefing on the country's National Adaptation Strategy (NAS) to the EU sugar reform. He explained that the NAS had come about because the sugar industry was critically important to Swaziland and the country was one of the top five producers worldwide, in terms of efficiency.

He said it was important for government to come up with a response to mitigate the effects of the market reforms with assistance from the European Commission (EC) and other stakeholders so as to assist smallholder farmers who were the most affected.
Batzlen noted that the country's sugar industry employs over 35% of the workforce in the agricultural sector and contributes about 12% to national economic output. He said 30% of cane supply comes from smallholder farmers and LUSIP.
"Farmers in Finland and Ireland, for example, could only export into the EU market because of the guaranteed price, which was twice that of the world market, but now they're suffering like the smallholder farmers," he said.
"Actually, Ireland and Finland are not producing anymore and therefore, the market is increasing. For Swaziland there's potential to export more of its quality sugar at a lower price, yes, but at larger quantities, which could offset the loss."
Meanwhile, RDMU Finance Manager Noel Cooke noted that despite the global economic meltdown, which required everyone to rethink strategies and so on, the demand for sugar would remain constant.
demand
"We do not anticipate that the demand for sugar is going to fall automatically because of the global crunch. We think it's going to be constant," he said.
Batzlen added, on the other hand, that sugar cane farming for smallholder farmers was still a viable option, provided there was assistance such as the EU agriculture diversification programme, which assists farmers with 70% funding for irrigation equipment.
He said unlike the current scheme, where farmers had to finance themselves 100% in terms of irrigation equipment, the new concept was workable and profitable for all. He said under this scheme, the farmers only had to finance the remaining 30% either through their own funds or by acquiring a loan.
"A lot has gone wrong in the past, with farmers having to finance themselves through loans, which has led to most of them being highly indebted. Also, there hasn't been any proper training for the farmers on how to manage farmer organisations and so on," he said.
"These have all been all along neglected and I wouldn't advise a farmer to go into sugar cane farming if they would have to get a 100% loan for irrigation equipment. That would be suicide. But with the 70% finance scheme, I can definitely recommend it."
source: observer