Cane growers bitter at proposal to double the sugar tax
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SOUTH African cane growers have responded with near vehemence to the proposal for the doubling of the Health Promotion Levy (HPL), also known as the sugar tax, citing the loss of 16 621 jobs across the industry and 9 000 job losses in the cane-growing sector alone in the first year of the sugar tax’s implementation.
In a statement yesterday, the chief executive of the SA Cane Growers Association, Andrew Russell, said calls by some public health scholars and the Healthy Living Alliance for the government to double the sugar tax showed zero regard for the impact the tax hike would have on the million people who relied on the sugar industry for their income, or for any discernible impact the HPL has had on reducing obesity levels in South Africa.
Russell said most of the job losses had been in communities living in rural areas, where poverty levels were the highest.
According to a report commissioned by the National Economic Development and Labour Council titled “Economic impact of the Health Promotion Levy on the sugar market industry”, the output of the sugar-cane farming sector had declined by a cumulative R414.2 million by 2019 as a result of the sugar tax, was R214.7m in 2018 and R199.5m in 2019, and the sugar processing sector’s output had declined by a cumulative R772.1m by 2019.
The sugar tax also resulted in a R653m decline in investment into the economy.
“Perhaps the reason for the group of scholars downplaying the devastating economic impact of the sugar tax to date is because the majority of them are based at overseas universities and, therefore, do not understand the dire economic situation our country finds itself in, with unemployment standing at 44.4 percent, or the hardships that so many rural people face,” Russell said.
Russell said although the group presents two studies that tracked young adults’ intake of taxable sugar sweetened beverages in Langa, Western Cape, and Soweto, Gauteng, as evidence that the sugar tax has had a positive impact, there was still little or no evidence that it has had a positive impact on obesity levels in the country.
This is despite the sugar industry making numerous requests to the government to commission a study to measure whether the tax has achieved its objective of improving health.
“The fact is that without jobs, people struggle to provide their families the health and nutrition they need. It is therefore in everybody’s interest that rural jobs are protected,” he said.
Russell that SA Canegrowers remained committed to working with the government to achieve the commitments of the South African Sugar Cane Value-Chain Masterplan in order to ensure a more diversified and sustainable sugar industry.
“However, in order to achieve this, it is critical that we safeguard the livelihoods of both commercial and small-scale growers, emergent farmers and thousands of workers living in rural communities,” he said.
BUSINESS REPORT ONLINE