South Africa's deputy minister of trade, industry and competition, Zuko Godlimpi, has called for a more coordinated and innovative approach to financing sugarcane growers, smallholders included, Food for Mzansi reported on 31 October.
He was speaking at the Sugar Industry Grower Finance and Government Engagement Workshop, which looked at the structural barriers that stop cane growers from getting finance and at practical ways to make them more bankable. "We need to have a conversation about what the structural problems are that make it difficult for funding institutions to give money to cane growers," Godlimpi said.
He said government, financial institutions and industry should look at mechanisms that let smaller growers aggregate their holdings and borrow collectively, with suitable insurance and credit arrangements. Rather than hunting for new sources of money, he wants existing funding across development finance institutions better aligned. "My instinct is not to look for new money. My instinct is to try to optimise the existing money," he said.
Godlimpi also said capacity-building and funding readiness should be part of the approach for growers who do not yet meet lenders' requirements, and pointed to gaps in insurance cover. Financing models are needed, he said, for investment in renewable energy, infrastructure, mechanisation and diversification.
On the move towards new cane-based products such as bioethanol, he said the industry would first have to show enough production capacity while protecting the sugar supply needed for food security. "We need to build this structural capacity to meet demand on both sides of the equation," he said.
The deputy minister indicated that the workshop's discussions and recommendations would be taken forward for further consideration.
Photo: Helena Hugo / Wikimedia Commons (CC BY-SA 4.0)
Source: Food for Mzansi
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