Doubling the sugar tax will result in thousands more rural job losses

Doubling the sugar tax will result in thousands more rural job losses

The calls by some public health scholars and the Healthy Living Alliance (HELA) for national government to double the Health Promotion Levy (“sugar tax”) shows zero regard for the impact of the hike.

One million people rely on the sugar industry for their income, and the studies show little discernible impact the HPL has on reducing obesity levels in South Africa.

While the group claims the HPL has had little impact on employment levels in the sugar industry, a report commissioned by the National Economic Development and Labour Council (NEDLAC) shows the exact opposite to be true.

The report titled: Economic Impact of the Health Promotion Levy on the Sugar Market Industry, shows that in the first year of the sugar tax’s implementation there were 16 621 job losses across the industry and 9 000 job losses in the cane growing sector alone.

Job losses

Most of these job losses have been in communities living in rural areas, where poverty levels are the highest. The report also highlighted that the sugar farming sector’s output had declined by a cumulative R414.2 million by 2019 as a result of the sugar tax (2018 – R214.7 million and 2019 -R199.5 million), while the sugar processing sector’s output had declined by a cumulative R772.1 million by 2019. The sugar tax also resulted in a R653 million decline in investment into the economy.

Perhaps the reason for the group of scholars downplaying the devastating economic impact of the sugar tax to date is because the majority of them are based at overseas universities and therefore do not understand the dire economic situation our country finds itself in, with unemployment standing at 44.4%, or the hardships that so many rural people face.

Little evidence

While the group presents two studies that tracked young adults’ intake of taxable sugar sweetened beverages in Langa, Western Cape and Soweto in Gauteng as evidence that the sugar tax has had a positive impact, there is still little or no evidence that it has had a positive impact on obesity levels in the country. This is despite the sugar industry making numerous requests to government to commission a study to measure whether the tax has achieved its objective of improving health. 

The fact is that without jobs, people struggle to provide their families the health and nutrition they need. It is therefore in everybody’s interest that rural jobs are protected.

SA Canegrowers remains committed to continue working with government to achieve the commitments of the South African Sugar Cane Value Chain Masterplan in order to ensure a more diversified and sustainable sugar industry. However, in order to achieve this, it is critical that we safeguard the livelihoods of both commercial and small-scale growers, emergent farmers and thousands of workers living in rural communities.

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