Deputy Speaker Sir,

As Minister responsible for the Sugar Cane Industry, I rise today in this honourable House to give a report on the state of the Industry.

Deputy Speaker Sir, there are few issues in Fiji that have been more politicised than sugar. In the lead-up to the election last year, many people were out in the grassroots spreading misinformation – using fear as a weapon to erode ordinary people’s confidence in my Government’s reforms. And unfortunately, some have continued to spread misinformation and fear even after the election – including some of those sitting on the opposite side of the House.

Deputy Speaker Sir, the address given by the Honourable Prem Singh on 16 October, 2014 – during the debate of His Excellency the President’s address – is a good example of this sort of behaviour.

Rather than engaging in a productive – or even realistic – discussion about the challenges the Industry faces, the Honourable Member decided to dwell on the past and try and score cheap political points using misinformation and distorted facts.

For example, Deputy Speaker Sir, the Honourable Singh engaged in a long rant about past history with the EU, but failed to mention that Government is once again working with the EU – and the Government of India – to bring about development assistance to further boost the industry.

The Honourable Member criticised Government’s failure to renew the majority of expiring land leases, when in fact Government’s rental subsidy has resulted in lease renewals soaring to 80 per cent in 2013, from 43 per cent in 1997.

The Honourable Member said that a 50 kilogram bag of fertiliser costs $31.50 without mentioning that this price is after a Government subsidy of $14.09.

And he spent a large section of his time discussing the Sugar Cane Growers Council – a favourite topic of his. He complained about the termination of the 38 councilors in 2009, without acknowledging that the Council was one of the most highly politicised organisations in the Industry. The councilors were political appointees, perhaps some of them were Honourable Singh’s friends, who cared more about the interests of a small group of elite than the ordinary cane farmer.

Proof of this, Deputy Speaker Sir, is that there have been no representations made by the growers to convene a new election. I wonder if the Honourable Singh continues to raise this issue because – like his colleague and party leader –he has found his traditional support base in the cane belt eroding from beneath him?

Deputy Speaker Sir, I would also like to point out that the administrative arm of the SCGC continues to exist and provides regular assistance to growers. We believe that the Council should exist to serve their best interests – not those of a select few. And so we intend to carry out further reforms of the organisation to enable it to better assist our cane farmers.

Deputy Speaker Sir, I also note how quick some of those in the Opposition have been to politicise the issue of the special cane payment including the Honourable Biman Prasad.

This was a payment made in the past before the beginning of the new school term, to help farmers prepare their children for their courses. However, with the provision of free tuition, free textbooks and subsidised bus fares, the demands on parents have been greatly eased by Government.

And of course you can add free water, free medicine and subsidized electricity. Something that the members opposite conveniently ignore. I suppose because all these wonderful initiatives – which have been embraced by the Fijian people – irks them.

Deputy Speaker Sir, the fact is that not all cane farmers require such a payment, but those who do are being assisted through the Sugar Cane Growers Fund.

I understand that – as of yesterday –a total of 1,000 cane farmers have accessed loans from the Sugar Cane Growers Fund, totaling $811,000.

Deputy Speaker Sir, the Sugar Cane Industry is a national issue, not a political issue. If the Industry is to have any chance of long-term success and prosperity – which we believe it does – politics must be removed from the equation. All stakeholders need to work together in the best interests of the Industry and the 200,000 Fijians who rely on it for their livelihoods.

There must be a commercial approach as has been taken in Mauritius which Honourable Prasad used as a reference in his Budget response speech but unfortunately he walked out, even though he is supposedly the opposition spokesperson on Finance, when he had the opportunity to scrutinize the Appropriation Bill. If this is the level of commitment or more appropriately lack of genuine commitment they have to the national budget then how can we expect them to be genuine regarding this important sector in our economy which nearly 200,000 Fijians depend on, directly or indirectly for their livelihood.

No one will deny the challenges that the Industry faces in the years ahead. But unlike those who have only negative things to say without offering any solutions, on this side of the House, we are fully committed to the survival, prosperity and future viability of Fiji’s Sugar Cane Industry.

So today, Deputy Speaker Sir, I would like to outline my Government’s plan to keep our reforms on track and continue to build on the successes of the past few years.

But before I do, Deputy Speaker Sir, I would first like to take a moment to pay a special tribute to my former Permanent Secretary for Sugar and my right hand man in the Industry, Manasa Vaniqi, who passed away earlier this year.

I am still coming to terms with his loss as are his family, his many friends, and colleagues across society, and especially in the Sugar Cane Industry. He left a positive and lasting mark on all of us and the Sugar Cane Industry in Fiji is better off for his years of service.

Deputy Speaker Sir, the Sugar Cane Industry in Fiji is at a critical turning point. When my Government assumed office, many people had simply written the Industry off, convinced that it was on the verge of collapse. But where others saw no viable future for sugar in Fiji, my Government was determined to not only keep the Industry alive but to place it on a new and more secure footing.

And our commitment to the Industry has never been stronger. The fact that I continue to be the Minister for Sugar in the new Government – as well as Prime Minister – demonstrates the importance that I attach to the welfare of the Industry. It is in the same manner I continue to be the Minister for iTaukei Affairs.

Deputy Speaker Sir, it’s no secret that the reform program hasn’t been easy. But I’m pleased to report to you today that through determination, innovation and a lot of hard work, those who work with me on the front line – keeping this vital part of our economy turning – have succeeded.

Deputy Speaker Sir, just look where we’ve come from:

• The uncertainty over the renewal of expiring ALTA leases;
• A 36 per cent cut in the price of our export sugar;
• The rising cost of production;
• The poor performance of our mills;
• The weak financial position of the Fiji Sugar Corporation.

And just look where we are now:

• The lease renewal issue addressed through the rental subsidy initiative, through CBUL which has benefited tenants and landowners alike;
• $116-million dollars invested in the upgrade of our three largest sugar mills as part of our drive to modernise the Industry and put it on a more secure footing;
• Plus initiatives we’ve invested in for the benefit of sugar cane growers, such as our funding for fertiliser to keep prices low and our work to improve cane access roads around the country.
• Increase in the share value of FSC and its collaboration with the private sector such as the ANZ Bank. The private and financial sectors are now confident to deal with FSC.

Deputy Speaker Sir, an overall snapshot of the Industry shows that we are not only producing more cane, but more importantly, producing more sugar from less cane and approaching international benchmarks.

Against an initial estimate of two million metric tonnes of cane for the 2014 crushing season, we crushed 1.83 million metric tonnes of cane and produced 226,000 metric tonnes of raw sugar with a TCTS of 8.1. Please note Deputy Speaker Sir that this is lower than the outdated 2013 statistic that the Honourable Singh decided to quote in his address.

Deputy Speaker Sir, for those who don’t know, TCTS stands for tonnes of cane to tonnes of sugar. It indicates how many tonnes of cane it takes to produce a single tonne of sugar. It is a reliable measure of efficiency in our fields and in our mills. Not long ago, Fiji’s TCTS was over 13. Our goal for last season was a TCTS of 9, which would have indicated a massive improvement in overall efficiency.

As it turned out, thanks to the investment we have put into our mills, we beat our target. This past season, Fiji’s TCTS dropped to 8.1. In other words, just over eight tonnes of cane to produce a tonne of raw sugar. And against the mill recovery target of 83 per cent, the Industry achieved a mill recovery rate of 88.1 per cent. Both impressive results.

Deputy Speaker Sir, our Industry was hampered – along with other sectors – by a drought which started back in March and continued throughout the harvesting season from June to November. But compared to the 2013 crushing season, these figures still represent an increase in cane production of around 14%; an increase in sugar production of more than 25% and an improvement in TCTS of 11%. All extremely gratifying.

Deputy Speaker Sir, one of the other remarkable success stories of the last few years is the remarkable turn-around of the Fiji Sugar Corporation - FSC.

Deputy Speaker Sir, Government funding to FSC in 2011 and 2012 allowed the organisation to reduce its accumulated losses. From $175 million in 2010, to $36.5 million in 2011, to finally recording a profit in 2012.

The FSC is now able to stand on its own two feet. Government has not needed to provide it any direct funding since 2013.

Of course, Deputy Speaker Sir, Government has supported a 40 million Euro pre-export facility for the FSC – in partnership with ANZ – to improve the organisation’s cash flow situation. With this facility, FSC has access to short-term funding from ANZ – guaranteed by Government – in order to ensure farmers are paid on time and to enable preventative maintenance works as and when needed at the mills. Or for any other operational cost. The participation of private commercial bank directly in the sugar industry in such a manner is unprecedented. It demonstrates the enormous confidence the private sector has in our reforms and the strength of the management under the Executive Chair, Mr. Abdul Khan.

Deputy Speaker Sir, in 2014 Government also provided a budget of $8.4 million for a cane development grant with the target of planting 3,000 new hectares of cane.

I am pleased to announce that – by the end of the extended planting season last December – the Industry managed to plant more than 5,600 hectares, exceeding our target by 2,6oo hectares. The total area under cane production now stands at 40,418 hectares.

Deputy Speaker Sir, as you can see, we have kept the faith with the 200,000 Fijians who looked to us to turn back the tide of neglect by successive previous Governments. We have provided them with new hope for the future.

But the Industry is not out of the woods yet. We all know the challenges we face in the years ahead. That’s why it’s more important than ever before to carry our momentum forward. To keep working together to guarantee a viable future for the sake of those working in the Sugar Cane Industry now and the generations to come.

Deputy Speaker Sir, the abolition of EU sugar production quotas post 30 September, 2017 and the consequent adverse implications on sugar prices presents a very big challenge indeed.

Moreover, EU sugar prices have already come under pressure, with significant falls compared to prevailing prices over a year ago. So suppliers like Fiji are having to prepare for a reduction in our export revenues even before 2017 – a sobering prospect for any developing nation.

Deputy Speaker Sir, we have already begun a serious search for new markets to give our Industry as many options as possible in the post-2017 era. Last year, a senior delegation led by the then-Minister for Industry and Trade and the Executive Chairman of FSC travelled to the Middle East and Asia to begin opening a dialogue. Encouraging talks were held and these will be pursued this year.

But, in the meantime, Deputy Speaker Sir, we are not resting on our laurels on the home front. We are not waiting to be swamped by events. Our Industry is fast-tracking other initiatives to diversify and expand its revenue streams. We are moving away from our reliance on one commodity – raw sugar – because we know this is no longer viable. We need to be smarter, to add value to our crop, to exploit new revenue opportunities and open up new markets.

This year, work will commence on a number of important projects:

• branded sugar packaging in Lautoka;
• an ethanol project in Rarawai;
• a syrup mill inPenang;and
• a sugar refinery in Labasa and cogeneration projects in Labasa and Rarawai.

Deputy Speaker Sir, these plans got a big boost when Indian Prime Minister Honourable Narendra Modi announced – during his historic visit to Fiji – a $US 70 million line of credit through the EXIM Bank of India. I note rather embarrassingly that the SODELPA members were absent at Prime Minister Modi’s historic address in this august House.

Of course, Deputy Speaker Sir these projects are in addition to the ongoing efforts to:

• raise cane production;
• pave the way for a cane quality payment system;
• improve mill efficiencies; and
• reduce farming costs to improve the livelihood of farmers.

Deputy Speaker Sir, it’s all about being smarter, taking a commercial approach, being more adaptable, talking facts and embracing technology rather than simply standing by, only talking and being swamped by events.

An example, Deputy Speaker Sir: One of the projects that we have just started is the digital mapping of our 13,000 sugar cane farms to establish precisely where they are, what they produce and how we can improve their output.

The Fiji Sugar Cane Industry WebGIS Portal – which I launched at the end of last year – is a technological breakthrough that promises to revolutionise our management of the Sugar Cane Industry. We’re now able to digitise the whole of the cane belt at farm and plot level to get a “real time” picture of the performance of the Industry.

Using GPS – the satellite Global Positioning System – we can establish the precise parameters of our cane farms. We can walk around any farm with a GPS device and get the co-ordinates of those areas under cultivation and those areas that are fallow and where more can be grown.

It’s all digitised and stored in the Industry WebGIS Portal, which is directly linked to the FSC’s database.

For each farm, we can enter all sorts of other information apart from its precise location and parameters: such things as the name of the grower, the farm number and sector, the cane access road used by the grower, the location of the nearest mill and the variety of the cane being grown.

What it gives us, Deputy Speaker Sir, is an unrivalled picture not only of individual farms and the performance of that grower but of the entire Industry. We can evaluate the performance of particular sectors and even each of the four sugar mills. And we can monitor the tonnage harvested and make estimates of the expected total Industry tonnage much more accurately and quickly.

It’s a wonderful new tool that marks a great leap forward in our ability to evaluate the Industry’s performance and allow the FSC, Government and other stakeholders to make better policy decisions.

Deputy Speaker Sir, it’s also about having a long-term plan. To use the data we collect to improve the Industry’s overall performance.

That’s why my Government – together with Industry Stakeholders – has put together a Sugar Cane Industry Strategic Action Plan, which lays out a vision for the development of the Industry.

Deputy Speaker Sir, the plan’s ultimate objective is to raise cane production to at least 4.2 million metric tonnes annually by 2020, which is the joint rated capacity of all the four mills.

To accomplish this, the plan is designed to help make improvements in six focus areas:

• Crop Production and Advisory Services;
• Harvesting and Transport;
• Milling and Processing;
• Marketing and Revenue Generation;
• A Cane Quality Payment System; and
• Industry Restructuring & Legislation.

Before I conclude, Deputy Speaker Sir, I would like to announce a new initiative today that I am personally very excited about. The Ministry is working closely with Industry stakeholders to put together what we have called a “New Cane Farmer Package.”

Deputy Speaker Sir, many of the labourers who work the cane fields have skills and know-how to run their own farms, but they don’t have the opportunity or the business knowledge to get started. So the idea behind this initiative is to help labourers – and other interested individuals – start their own farms by helping them with such things as cane contracts, leases and financing.

I look forward to having more to say on this soon.

Deputy Speaker Sir, with those words I conclude my statement this morning.

Vinaka Vakalevu. Thank you.