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Written By : Kelera Serelini. Erosion of European Union sugar prices has placed substantial pressure on all sugar producing countries including Fiji, to adopt appropriate measures to face global competition, Renuka Mahadavan of the University of Queensland reveals in her study papers.
She presented her papers titled “The viability of sugar industry” at the University of the South Pacific on Monday.
Ms Mahadavan said the viability of the industry was further threatened by the non-renewal of land lease which had adversely affected farm investment.
In her study, she also supported concerns that the transfer of land to Fijian landowners after expiry would encourage the influx of inexperienced and undercapitalised.
“The empirical evidence of this study supports this,” she said.
“Assertion as native farmers on average produced 10 per cent less cane than Indian farmers.
First, she said, increasing farm size by amalgamating leases to enable economies of scale in output and allow better use of inputs and technology for improved efficiency performance.
“Large farms are not more commercially viable in a competitive environment,” she said.
“This will however mean that many of the current small farm households may face difficulties but given the high possibility of facing eviction after the lease expires, this maybe an opportune time to form large plantations.
“These farmers can however be employed for a stable wage to work on the farms or to possibly work on a shared arrangement of cane proceeds that make it sufficiently attractive of them to be employees.”
Ms Mahadavan indicated that an advantage to large scale farming was that their economic viability would make it easier to obtain loans from financial institutions to improve investments in farm inputs.
Also, she said, with less small scale farms, extension visits by research officers will be more feasible and easy to monitor and help if the number of farms requiring attention is small.
“Eighteen second, the market can resolve the issue of who should remain in the industry based on efficiency and competitiveness but this may not foster the social objective of the Fijian government to increase ethnic Fijian participation in the sugar cane industry.
“However, a reasonable compromise can be made on this objective by encouraging native Fijians to be involved in alternative crop farming.
“This is in line with the Alternative Livelihood Project in Fiji that began in 2006 and funded by the Asian Development Bank, the Fiji government, and other local institutions.
“It is timely to channel available labour into these new crops especially if cane cultivation is new to them as well.”
She said with the loss of EU sugar prices, it was best if market was catered for by efficient producers.
Thirdly, Ms Mahadavan said, as land efficiency was affected by the quality of land farmed, more should be done to prevent soil erosion, to encourage adequate and timely fertilisers and weedicides application, and control diseases.