Research from the Bureau for Food and Agricultural Policy shows that under a continued sugar tax regime, the sector could lose up to 10% of its direct jobs in seven years.

This is despite research from the South African Medical Research Council (SAMNR) and the Center for Health Economics and Decision Science at the University of Witwatersrand (Wits) showing that sugar taxes are not linked to job losses in sugar-related industries in South Africa. Africa.

Higgins Mdluli, president of the South African Sugarcane Growers’ Association (SACS), says the wrong conclusion was initially drawn from the quarterly labor force survey (Kamo), which uses average employment across South Africa’s agricultural sector. This information includes employment in all sectors of agriculture in South Africa – including major employers such as the grain, citrus and livestock sectors.

He says the sugar tax has little to no effect on the viability of most sectors of South African agriculture, but it has a very real and direct effect on the demand for sugar cane. “To suggest otherwise is in bad faith,” he says.

Mdlulu says the SAMNR and the Wits Center say in their own publications and website that they advocated for the health promotion levy before it was introduced by government in April 2018. “Because they were strong supporters of this tax, their research into its impact may be conflicting. Data obtained both independently and by the industry shows that (imposing) sugar tax has led to job losses among sugarcane farmers,” he said.

An independent study by the National Economic Development and Labor Council (Nedlac), released in 2020, estimates job losses in the sugar and soft drinks industries at 16,000. Nedlac’s research, which compares employment figures in the sector between 2017 and 2019, shows that small-scale and commercial sugar cane growers lost more than 9,700 jobs after the sugar tax was introduced in 2018.

These job losses due to the impact of the sugar tax occurred before the Covid-19 pandemic and the associated disruption to the economy after 2020, contrary to the study’s conclusion.

Mdluli says SAKV also conducts annual opinion polls among its members. “Demand for sugar among local buyers has fallen as a result of the sugar tax, with SAACS estimating that the sugar tax represents a decline of 250,000 tonnes in domestic sales.”

Even a small increase in the sugar tax will lead to a smaller area of ​​sugarcane cultivation, due to the declining demand for sugar. The greatest job losses are expected among small-scale producers in rural areas of KwaZulu-Natal and Mpumalanga.

The SAMNR and the center also look at employment trends in the agriculture sector, which employs more than 900,000 people directly and many more indirectly. In contrast, there are currently approximately 22,000 sugar cane growers in South Africa, of which 21,000 are small-scale producers.

The sugar industry, including sugar cane growers and others, currently supports an estimated 65,000 direct jobs and 271,000 indirect jobs, with a million people dependent on the income it provides.

The continued implementation of the sugar tax threatens the livelihoods of mainly the 21,000 small-scale producers and those who depend on the jobs they create in rural South Africa.