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Forget fuel, sugar is the bitter pill to swallow

Jul 08 2018 09:00
Terry Bell

There was, legitimately, a great deal of fuss made in the past week about the fifth increase so far this year in overall fuel prices. Once again the poorest of the poor will suffer most as the extra charges feed through to other sectors of the economy.

But there does seem to be a major rebellion building, much like the one that has virtually crippled the e-tolls scheme in Johannesburg. And, like the e-tolls resistance, it seems to be driven by vehicle owners who tend to comprise slightly better-off workers, and people with small businesses.

In the process, another bitter pill for the country to swallow was almost totally overshadowed: the looming crisis in the sugar industry. Never mind all the arguments about a sugar tax and whether sugar is good or bad. The simple fact is that it is a part of life, demanded and used around the world.

In economic terms, there is an even more crucial fact for South Africa: we are among the world’s most cost-effective producers of sugar. The fields and mills of the country annually make available a surplus to domestic requirements.

This should mean a regular source of foreign currency to help ease the country’s indebtedness.

But South African users have been importing sugar from countries such as Brazil and — of all places — the United Arab Emirates (UAE). The argument is that it is cheaper, despite having to be shipped halfway across the world.

Sugar subsidies

It is cheaper. But only because it is subsidised. This is something I have complained about for years, mirroring the regular, but usually not sustained, objections from the labour movement.

This is happening despite the “strategic support” promised by the government for the “optimal development of the sugar industry”. But then, the government, while remaining committed to “free trade”, has pledged to not only safeguard, but also create jobs.

Yet, if there existed truly free trade in this globalised economy, South African sugar would be a solid foreign exchange earner. But all the rhetoric about free and fair trade is a myth and is regularly shown to be so.

Cheaper imported goods, either subsidised or produced by sweated labour in often horrific conditions, has already seen a once-thriving domestic garment industry become a threadbare version of its former self. Then there was the effect of European imports of goods, such as canned tomatoes, and the extensive dumping of chicken from the US and Brazil.

I have also asked how — unless it is a case of unfair competition — it is that chocolate bars and biscuits, for example, from regions such as the UAE can undersell local products. There have been no answers, perhaps because it is self-evident: the government, having ingested the free trade drug, has become blinded to reality.

The hallucination this drug apparently produces is that continued addiction will make everything better in the long term. The situation regarding sugar should have provided a serious wake-up call.

Because this agriculturally based manufactured product employs thousands of people at farm, factory and other levels. It is also, arguably, one of the economic areas that has, in recent years, seen more diversity develop in terms of small-scale producers, the major victims of essentially unnecessary imports.

At the end of last month there was a nationally unreported protest march of these farmers who fear that their livelihoods are in jeopardy.

Theirs is a legitimate fear: according to a report produced by the University of Pretoria’s bureau for food and agricultural policy, there are 17 500 farm-level jobs alone at stake.

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terry bell  |  sugar tax  |  fuel price
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