SA Canegrowers call to scrap sugar tax gets DA backing

‘Repealing the tax will restore much-needed competitiveness to the sugar industry,’ says the organisation’s chair.

Sugarcane farmers’ industry body SA Canegrowers has received backing from the Democratic Alliance (DA) for national government to scrap the Health Promotion Levy, or ‘sugar tax’, as it is commonly referred to.

On Tuesday, the organisation welcomed the announcement that the DA is also calling for a repeal of sugar tax in SA.

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Read: Cane growers appeal to keep sugar tax at current levels

Higgins Mdluli, chair of SA Canegrowers, said the DA’s stance was “a step in the right direction”.

“Introduced in 2018, the tax has significantly impacted the sugar industry, particularly small-scale sugarcane growers in KwaZulu-Natal and Mpumalanga’s rural areas,” SA Canegrowers reiterated in a statement.

SA Canegrowers represents 24 000 small-scale and 1 200 large-scale growers across KwaZulu-Natal and Mpumalanga.

“We are encouraged by the recognition that the tax has done more harm than good,” said Mdluli.

“Repealing the sugar tax will restore much-needed competitiveness to the sugar industry, bolster job security in rural economies, and provide relief to the thousands of families whose livelihoods depend on sugarcane farming,” he added.

According to SA Canegrowers, the sugar tax was introduced to address public health concerns, aiming to reduce obesity and related health issues. However, it has had limited success in achieving its health objectives while creating significant economic challenges for the sugar industry.

It cites a 2018 Nedlac report, which noted that over 16 000 jobs were lost in the first year of the levy.

Rural impact

“The tax has disproportionately affected small-scale growers, who form the bulk of SA Canegrowers’ 24 000 members. These growers are essential to sustaining rural economies by providing employment and stability in areas with few alternative job opportunities,” said SA Canegrowers.

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“The financial strain has extended to the broader industry, with both small and large growers facing higher borrowing costs due to perceived risk. This has constrained their ability to invest and expand, further weakening the sector’s long-term prospects,” it added.

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SA Canegrowers has urged policymakers to repeal the tax, arguing that this move aligns with the government’s goals of inclusive economic growth and job creation.

“We urge [National] Treasury and policymakers to prioritise rural jobs and stability while crafting evidence-based policies that support industries integral to the country’s socio-economic well-being,” said Mdluli.

As debate about the future of the sugar tax continues, SA Canegrowers said it remains committed to advocating for the sector. The group has emphasised the importance of policies that balance public health goals with economic sustainability.

Mdluli expressed hope that the DA’s proposal would prompt a shift in policy.

“Repealing the sugar tax would relieve the economic burden on the sugar industry and help secure the livelihoods of thousands of South Africans,” he said.

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