GOVERNMENT cannot continue to conduct business with an industry that is costing taxpayers millions.
Sugar Industry Minister Tomasi Tunabuna said this while highlighting the large amount of debt that the Fiji Sugar Corporation was accumulating and the growing demands from cane growers to increase the guaranteed price to $110 per tonne.
“We have not made any final decisions on whether the subsidies should increase to $110. There have been recommendations received. We are also looking into this,” he said.
Mr Tunabuna said while the Government understood farmers’ concerns, any decision on increasing payments had to be carefully considered.
“We cannot continue doing business that is costing the Government and taxpayers a lot.”
For last year alone, Mr Tunabuna said, the Government paid off $28million for the top-up.
“With the price per tonne at $85, we will be paying close to $40m for this year alone.”
Apart from the top-up, he said the support to the sugar sector extended beyond direct payments to farmers, with the government also funding maintenance work at sugar mills and other industry operations.
“The Government continues to invest in the industry despite the ongoing production challenges, such as providing subsidies for fertilisers.”
However, he said there was a pressing need to ensure government funding was spent wisely so that more people, particularly young farmers, could benefit from development spending.
“When we look at how income is spread across rural communities, there is a clear need to ensure government funding is spent wisely so that other farmers can benefit from development spending.”
He also pointed out FSC’s ongoing financial and operational challenges that have generated a large amount of debt.
“The Fiji Sugar Corporation was in $310m debt.
He said the Government had since helped reduce that burden significantly by paying off a large portion of the loans.
“We are paying off their loans and were spending over $10m each year in trying to pay off their loans.”
Mr Tunabuna added close to $200m of FSC’s debt had already been paid by the Government as part of ongoing efforts to stabilise the sugar industry.
