Bitter times for sugar announced

Funding for six service providing institutions (SPIs) of the sugar industry, through the Global Cess, will decrease from Rs 519 million to Rs 287 million by June 2012.

This declaration was made by minister of Agro Industry and Food Security Satish Faugoo, who also said that the implementation is already underway.

On Tuesday at the National Assembly, Opposition leader Paul Bérenger chose to focus his Private Notice Question to Faugoo on the reform of six institutions funded by the Global Cess.

In his response, the latter provided guidance on the progress of this project that aims to reduce the dependence of producers’ income from sugarcane. The contribution to the Global Cess is levied directly on the money payable to farmers.

The minister explained that this project is one of the measures being undertaken to transform the agro-industry by sugarcane industry Reforms in the sugar industry comprise a reduction in the Global Cess, which is used to finance the six institutions namely Mauritius Sugar Authority, Mauritius Sugar Terminal Corporation, Mauritius Sugar Industry Research Institute, Farmers Service Corporation, Cane Planters and Millers Arbitration and Control Board and the Sugar Planters Mechanical Pool Corporation.

They all have activities that are directly linked to sugar production. Faugoo highlighted that staff downsizing is also part of the restructuring of these six institutions. The number of employees in the six sugar factories will decrease from 900 to 500.

To another question from Opposition MP, Faugoo revealed that proposals will be made to these employees and meetings will be held. He also said the restructuring was one of the conditions imposed by the European Union to be eligible for support measures disbursed in African Caraibe and Pacific countries.

The leader of the Opposition also wanted to know why the cess is being reduced. Faugoo said this is not something new and that the cess money has been decreasing from Rs 601 million in 2005 to Rs 519 million in 2010 with an exception for 2008 when cess went up to Rs 650 million because of PRB commitments.

“Cess reduction and restructuring of the cess-funded service is a long standing issue dating back to the year 2000,” he said. He added that this has been addressed in the Multi Annual Adaptation Strategy (MAAS) Action Plan 2006-2015.

“The reform of the cess-funded institutions is considered an important component of MAAS, given that the amount of cess weighs heavily on the revenue of planters, especially the small planters and metayers,” said Faugoo. Therefore, a restructuring of these institutions has been planned. A joint committee has initiated a process of reflection to establish a new working structure for the industry