SPC Implements EU-Funded Project on Improvement of Key Services to Agriculture

The Secretariat of the Pacific Community (SPC) is presented with a unique opportunity to address some of the challenges to Fiji's sugar industry.

The Secretariat of the Pacific Community (SPC) is presented with a unique opportunity to address some of the challenges to Fiji's sugar industry, and realise new opportunities for import substitution in the horticulture sector, while addressing the land use management and sustainability challenges facing the sugar belt region.

These were the comments of Acting Director of SPCs Land Resources Division Inoke Ratukalou while officially signing a new FJD 9 million project with the European Union (EU) earlier this week. Mr Dirk Meganck, Director for Asia, Central Asia, Middle East/Gulf and Pacific, represented EU.

'Through the EU-funded Improvement of Key Services to Agriculture project, SPC will deliver better livelihood outcomes for the families of Fiji's sugar belt region. The sugar sector faces numerous challenges created by the end of the Sugar Protocol and price support,' Ratukalou said.

He explained that Fiji's sugar production had fallen from a peak of 341,000 tonnes in 2000 to less than half that figure today, and the price paid to the farmers had dropped from ?24.4/t of cane to ?18.4/t in the 2010 harvest season.

'Such prices are not compatible with the current cost of production of cane. Subsequently, it is likely that 20% of the land presently used for cane production, in particular on steep slopes with poor and shallow soils, is expected to be released for other uses.'

This, he added, is equivalent to around 5000 farmers leaving the industry, on the top of the 5000 farmers who have left the industry since 2000.

Mr Meganck commented that Fiji will continue to enjoy preferential access to the EU market under the Market Access Regulation until 2014 (pending the application by Fiji of the interim Economic Partnership Agreement) as well as certain price guarantee mechanisms until 2015, but the current Fijian cost of production cannot be sustained in the long run, and the industry is on the verge of collapsing if strong and appropriate measures are not taken immediately to recover efficient costs before the international market price returns to its normal trends.

The objective of the Improvement of Key Services to Agriculture project is to cushion the economic and social impacts of the sugar restructuring by supporting a diversified, market-driven agriculture and supporting fair-trade associations that provide additional revenue to farmers. SPC will assist cane farmers to improve the income they receive from their present sugar cane production through the assistance to fair-trade and to reduce their dependence on cane farming by assisting them to diversify into horticultural crop opportunities.

In 2011, SPC also supported the sugar cane growers of the Labasa area to re-organise as a FairTrade certified co-operative.

The big increase in demand for Fair Trade chocolate in the UK has increased the demand for Fair Trade sugar, with few countries currently able to supply it. The 26% price increase the Labasa growers were able to negotiate led to over FJD 4m in Fair Trade premiums being paid to farmers and the growers' representative body.

SPC looks forward to working with the EU Project Management Unit and the stakeholders of Fiji's sugar industry, to deliver better livelihood outcomes for struggling families.