Godlimpi urges aggregation support for small-scale sugarcane growers to access funding
Trade, Industry and Competition Deputy Minister Zuko Godlimpi has called for more coordinated and innovative approaches to financing sugarcane growers, particularly smallholder farmers, as South Africa works to realise new sugarcane-based opportunities.
During a Sugar Industry Grower Finance and Government Engagement Workshop hosted on October 26, Godlimpi said small-scale growers are often deemed "unbankable" and therefore suggested that government, financial institutions and industry stakeholders explore mechanisms that enable smaller growers to aggregate their holdings and collectively access finance.
"We need to address the structural problems that make it difficult for funding institutions to give money to canegrowers," he said, adding that these farmers need appropriate insurance and credit arrangements.
Godlimpi also emphasised the need to better align existing funding across development finance institutions and other funding sources, rather than simply seeking new sources of financing.
It is not about looking for new money, but optimising the existing money, he stated.
Further, Godlimpi suggested that capacity-building and funding readiness should form part of the approach to assisting small-scale growers, particularly those who are unable to access finance owing to not meeting funding requirements.
He recommended that the industry also address insurance gaps affecting growers and develop financing models that can support investment in areas such as renewable energy, infrastructure, mechanisation and diversification.
"The transition toward new sugarcane-based opportunities, including bioethanol, will require the industry to demonstrate sufficient production capacity while protecting the supply of sugar for food security.
“We need to build this structural capacity to meet demand on both sides of the equation, sustain the tonnage you give to food and have enough feedstock for this thing that we’re talking about,” Godlimpi said.
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