VP Mohadi pushes for sanity in sugar industry

Vice President Kembo Mohadi is frantically working to resolve the stand-off between Lowveld sugar producer Tongaat Hulett Zimbabwe and indigenous cane farmers to ensure harmony and increase in aggregate sugar output in the country.

The two parties have been at loggerheads over a raging Division of Proceeds (DOP) dispute and absence of a milling agreement between the firm and outgrower farmers who benefited from Government’s land reform programme.

DOP is the scientific ratio used to share proceeds from sugarcane milling between the miller (Tongaat) and the outgrowers.
Outgrower farmers, led by their respective associations, last year approached VP Mohadi seeking a lasting solution to the standoff with Tongaat.

Minister of State in VP Mohadi’s Office Cde Davis Marapira yesterday said the Vice President was seized with the matter.
He said the VP remained committed to finding a lasting solution that will engender harmony in the sugar industry.

“We have been meeting both sides (Tongaat and outgrowers) as part of an ongoing engagement process being led by the Vice President to make sure there is harmony in the Lowveld sugar industry and we have so far covered some ground.’’

“The main sticking issue at the moment remains the issue of DOP and both sides have made presentations in support of their positions, but we have asked representatives of farmers to bring more documentation before we can make a determination,” he said.

The drive to end the raging deadlock is being led by VP Mohadi’s office and the Ministry of Industry and Commerce.
Minister Marapira said they will make a recommendation on the way forward to VP Mohadi upon completion of the ongoing consultations. “It is everyone’s hope that at the end there is a win-win situation. We want our farmers to benefit to remain afloat, but at the same time we must also take cognisance of Tongaat’s concerns,” he said.

The minister said Government wanted harmony in the sugar industry for all players to benefit and ensure the country’s sugar output continues to rise.

Currently, farmers say that Tongaat’s share of the DOP (milling charges) is too high at 23 percent considering that the firm no longer extends some exemptions and benefits, especially in cane haulage like what used to happen during the era of white former cane commercial farmers.

The farmers’ predicament is further exacerbated by that outgrowers farmers are not paid for other sugarcane by-products such as ethanol and electricity which is produced during milling of sugar.

Tongaat has also been under fire for not paying farmers their share of exported sugar, with the firm arguing that the funds were being used to import inputs such as fertilisers and repair of the cane mills at Triangle and Hippo Valley.

However, farmers argue that meeting the costs of repairing the mills and importing fertilisers will be tantamount to double charging them as they pay 23 percent milling charge and also buy inputs from Tongaat at exorbitant prices.