Service Contract No 2007 / 147-446 Strategic ... - Swaziland

3 THE SUGAR SECTOR IN SWAZILANDSugar is the backbone of Swaziland’s economy. The agriculture sector contributesapproximately 8.6% of the national GDP, and sugar cane makes up 74% of that. Whenadding the production of sugar and sugar by-products to the equation, we have that thesugar industry, as part of the agricultural as well as of the manufacturing sector, directlyaccounts for 12% of the overall country’s GDP. As well it also contributes indirectly throughits links to other sectors, such as banking and services.Up to around 2003 the sugar industry accounted for approximately 10% of formal sectoremployment. However, changes in the economy and the depreciation of the Euro against theRand have led to a decline in the formal employment in the industry. The industry alsocontributes to human development through the provision of social services such as housing,clean water, education, health care and recreation to employees, their households andneighbouring communities. Some of these services are at the moment jeopardised due to thereform of the sugar sector, and are subject of attention by the NAS.Sugar cane is currently grown on approximately 52,068 ha by the mill estates, commercialfarmers and small cane growers (SSA Annual Report 2008-2009). The area under sugarcane is currently under expansion through two large irrigation projects: the KomatiDownstream Development Project (KDDP) and the Lower Usuthu Smallholder IrrigationProject (LUSIP). In the LUSIP area approximately 800 ha have been planted and a total of3,500 ha are expected by 2012.Sugar cane is grown under irrigation in Swaziland; it is also and by far the main user ofavailable surface water, with 96% of the total. Land under sugar cane is grown mainly onIndividual Tenure Farms (ITF) or on Swazi Nation Land (SNL) leased by estates. Morerecently development of irrigated sugar cane on SNL by smallholders has started under theKDDP and LUSIP projects. Most of the sugar cane is grown in the vicinity of the sugar mills,although there are areas under sugar cane further afield, such as in Malkerns andSidvokodvo.Currently there are three sugar mills in Swaziland, which together milled about 5.3 milliontonnes of cane in the 2008/2009 season and produced around 620,000 tonnes of sugar 3 .The Royal Swazi Sugar Corporation (RSSC) owns the northern mills and miller-cum-planterestates at Mhlume and Simunye, while the Illovo Sugar Company owns the Ubombo Sugar’smill in Big Bend.By 2006 the estates of the two milling companies and the few large growers (including Tibiyo4Taka Ngwane, Tambankulu Estates and Crookes Plantations) accounted for 77% of thearea planted and 81% of all cane produced. However, in the last ten years the number ofsmall growers has increased, and expected to further increase through KDDP and LUSIP.Such farmers are organised under Farmers’ Associations (FA), Farmers’ Companies orindependent growers. In the three cane growing areas, at least 150 medium- and small-scalegrowers have arisen, most of which are Farmers’ Associations.A new sugar cane area and sugar mill is being proposed for the Sidvokodvo area, whichcould better service the cane growers in Malkerns.Distilleries are also considered as part of the sugar industry, as their prime raw material ismolasses, a by-product of the sugar production process. There are two distilleries currently3 Information provided by RSSC and Ubombo Sugar for 2009.4 The land under sugar cane at the three mill estates is as follows (2010 data): Mhlume Sugar Estate: 9,595 ha; SimunyeSugar Estate: 11,309 ha; Ubombo Sugar Estate: 8,171 ha.RDMU (Strategic Environmental Assessment of the National Adaptation Strategy) - Page 18