Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry Understanding the Factors that have impacted on Cane Production in the South African Sugar Industy 2014 Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry Understanding the Factors that have impacted on Cane Production in the South African Sugar Industry Identifying Potential Business Options for Future Development 2014 Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry Preamble A CANEGROWERS contracted the Bureau for Food and Agricultural Policy (BFAP) at the University of Pretoria to Sconduct a study on the key drivers that have in uenced and led to the current state of the South African sugar industry and to propose some business options to stimulate cane production. This document constitutes the project report and is divided into two sections / phases: Phase I Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry Phase II Identifying Potential Business Options for Future Development September, 2014 Disclaimer The views expressed in this report re ect those of the BFAP authors and not necessarily that of SA CANEGROW- ERS. While every care has been taken in preparing this document, no representation, warranty, or undertaking (expressed or implied) is given and no responsibility or liability is accepted by BFAP as to the accuracy or complete- ness of the information contained herein. In addition, BFAP accepts no responsibility or liability for any damages of whatsoever nature which any person may su er as a result of any decision or action taken on the basis of the information contained in this report. – 4 – Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry PHASE 1 Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry – 5 – Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry Table of contents 1 Introduction . 10 2 Methodology . 11 3 Cane production . 12 3.1 Area under cane . 14 3.2 Yield . 20 4 Factors a ecting area and yield . 24 4.1 Large-scale grower indicated factors a ecting cane area and yield . 24 4.1.1 North Coast – Darnall, Gledhow and Maidstone . 24 4.1.2 South Coast – Sezela and Umzimkulu . 24 4.1.3 Zululand and Tugela – Umfolozi, Felixton and Amatikulu . 24 4.1.4 Midlands – Noodsberg and Eston . 25 4.1.5 Northern Irrigated –Malelane, Komatipoort and Pongola . 25 4.1.6 Identi cation of main factors . 25 5 Economic factors. 27 5.1 Input costs . 27 5.1.1 Farm sta and labour . 29 5.1.2 Fertiliser . 29 5.1.3 Fuel, lubricants and mechanisation maintenance and transport . 31 5.2 RV payment system . 32 5.2.1 RV payment system’s impact on allocation of proceeds to farmers . 32 5.2.2 RV’s impact on sugar production . 42 5.2.3 Felixton’s Brix minus pol issue . 46 5.3 Pro tability . 47 5.4 Economic factors – conclusion . 49 6 Sustainability . 50 6.1 Main agronomic factors limiting sustainability . 50 6.2 Analysing each factor in the context of Sustainability . 50 6.2.1 The decline in organic carbon levels in the soils . 51 6.2.2 Increasing soil acidity on sugarcane elds . 51 6.2.3 The depletion of certain essential plant nutrients . 51 6.2.4 Compaction of soils due to heavy machinery . 52 6.2.5 Increasing insect pressure – Eldana, Thrips and Nematodes . 52 6.2.6 Farming for RV . 53 6.3 Sustainability factors – conclusion . 53 7 Socio-political factors . 54 7.1 Land reform . 54 7.2 Grower – miller relationship . 54 – 6 – Understanding the Factors that have Impacted on Cane Production in the South African Sugar Industry 7.3 Urban Development . 54 7.4 Socio-political factors – conclusion . ..