The Sunday Mail
Business Reporter
TRANSPORT costs are gobbling more than 33 percent of revenues generated by Mkwasine’s small-scale sugarcane farmers who deliver their product to milling companies to Hippo Valley and Triangle in the Lowveld.While average earnings for farmers are US$185 000, more than US$32 400 is used to move the sugarcane to the nearest sugar milling plant, which is 70 kilometres away. More than 300 new farmers in Mkwasine are being affected.
The two sugarcane milling plants are owned by Tongaat Hulett, a Johannesburg Stock Exchange-listed company which wholly owns Triangle Sugar Estates and controls 50,3 percent of Hippo Valley Estates.
Transport costs are therefore chewing a significant chunk out of the profits being made by the farmers. However, farmers continue to lobby Government to import mini sugarcane mills from India and China that could significantly help to lower costs.
Zimbabwe Sugarcane Development Association chair Mr Edmore Veterai told The Sunday Mail Business that if transport costs were left unchecked, this could significantly affect the viability of small-scale farming.
“Farmers in Mkwasine, particularly small-scale farmers, continue to be disadvantaged by the 70km distance from the nearest sugar mills. This costs them around 33 percent of their production and this situation is compounded this year by continuous breakdowns and poor turnaround, particularly at Hippo (Valley) Mill.
“Farmers continue to engage Tongaat at a high level but the results are not pleasing as bankers are not satisfied with their targets on return of investment,” said Mr Veterai.
Small-scale sugarcane producers harvest an estimated 10,6 tonnes per hectare worth US$4 500.
Added Mr Veterai: “Continued stay of overripe cane in the field brings unnecessary maintenance costs and delay income to the farmer while at the same time the banks are piling interests on advanced loans.
“Lots of good quality sugarcane in the fields is not money until the sugarcane is crushed and carted to the market, hence the need to invest in milling plants to avoid over ripping of canes.”
Sugarcane is a one-year crop that has over-controlled and limited cutting quotas. Apart from the high transport and haulage costs, farmers also have to contend with a shortage of equipment for operations, low prices paid for harvested cane, limited training and failure to plough out old cane.
There have also been difficulties in accessing cheap finance and credit.
Government is, however, in the process of acquiring dozens of mini sugarcane millions from China. Treasury also plans to buy sugar mills from Mauritius.
