Richard Nicholson
South African Cane Growers’ Association, 170 Flanders Drive, Mount Edgecombe, 4300, South Africa
The South African Cane Growers Association (SACGA) has, since 1927 represented growers and provided services in all economic, governance, and industrial affairs. To do this, the Association has needed a strong data-gathering and analysis component to ensure that it can negotiate reasonably and accurately on behalf of its constituents. The Large-Scale Grower (LSG) Cost Survey has played a prominent role in the association’s functions. The cost survey was first implemented in 1932/33 and this data collected over the years has proved invaluable to lobby for growers’ economic interests. Recently, the industry has faced a multitude of challenges. To mitigate these risks, the Sugar Industry Master Plan, signed din 2020, provides the plan and framework for ensuring that the sugar industry survives and thrives. The Sugar Industry Master Plan, however, stipulated that increases to the notional price (the proxy price determined in the division of proceeds based on the volume of saleable sugar) are to be based on the Consumer Price Index (CPI) rate. Subsequently, there have been many crises, such as flooding, milling capacity, and milling company financial issues, as well as extremely high input costs. Bearing these crises in mind, the increases in the notional price of sugar per CPI, however, did not come close to matching the steep rise in production costs in the 2022/23 season. This paper, using the 2021/22 SACGA LSG cost survey data forecast to the 2022/23 season, shows how severe input cost increases affected growers. This data highlighted the economic shocks to growers and successfully lobbied the industry for a revised notional price increase methodology. The Producer Price Index (PPI) was agreed as a guide in 2023 for the notional price increase to more accurately reflect the input cost pressures faced by producers.