SA Canegrowers

SCIENTIFIC RESEARCH

SA Canegrowers holds the discipline of scientific and industry research as a fundamental priority to secure the future sustainability of South Africa's sugar industry.

At SA Canegrowers research and development are considered an absolute priority for the advancement of the sugarcane growing sector. Staff are encouraged to enter into research projects on an annual basis and to submit their work for peer review and publication across the industry, both nationally and internationally.

 

 

SA Canegrowers Research: Agriculture - 2023/24

The rules of the Local Pest, Disease and Variety Control Committees that operate in the South African sugar industry require that growers use only Certified and Approved Seedcane to plant commercial fields. Certified Seedcane Nurseries are the first stage of seedcane production and are established with conventional hot water treated (HWT) seedcane, NovaCane® plantlets or single-budded sugarcane seedlings/transplants. The seedcane from Certified Nurseries is used to plant Approved Nurseries, which is the bulking stage. The aim of this study was to identify and provide costings for all the factors involved in establishing Certified Nurseries with the different types of planting material that are currently available. The installation of a new HWT facility and the establishment of the seedcane scheme at Pongola provided valuable information for the development of the model calculator. This information was supplemented by interviews with nursery owners and managers, which allowed the development of regionalised calculators to assess the following scenarios: a) The cost of running and maintaining an existing HWT facility and being able to recycle seedcane, compared to planting with NovaCane® or transplants, and with the option of recycling the plant and 1R NovaCane® crops through the HWT facility; b) The cost of running and maintaining an existing HWT facility and being able to recycle seedcane, compared to planting with NovaCane® or transplants only when no HWT tank is available; and c) The cost of using NovaCane® or transplants only to establish a Certified Nursery in an area where no HWT facility is available, compared to setting up and running a new HWT facility. The calculator for each region represents a standard seedcane scheme where the plant and 1R crops of the Certified Nurseries are used to establish Approved Nurseries, from which they are used for commercial plantings.The results indicated that the average cost of establishing a Certified Nursery with Certified Seedcane that is cycled through an existing HWT facility, in order to supply sufficient planting material for Approved Nurseries for different regions, was approximately R1 million per annum. This was the most cost-effective system. The differences between the regions were largely due to the differences in their annual commercial replant area and irrigation requirements. Using NovaCane® to establish Certified Nurseries on an annual basis, with no option to recycle through a HWT facility was on average, ~R3.8 million more expensive than recycling conventional Certified Seedcane through an established HWT facility. Setting up and running a new HWT facility (the cost of CAPEX covered by a 10-year fixed-term loan, at an interest rate of 12%) was calculated to be a cheaper option than establishing a nursery with NovaCane® or transplants on an annual basis, with no option to recycle the resulting Certified Seedcane. This was influenced by the number of tanks required to provide sufficient seedcane for the annual replant of the Certified Nursery area, the transport costs, as well as whether the installation of an irrigation system was required as part of the facility. NovaCane® remains an important option for establishing Certified Nurseries and it is currently the only method available for virus elimination. Methods or systems to make this source of planting material more economically viable in a Certified Seedcane production system should continue to be explored.

For its small size in the global context, the South African sugar industry has performed well; it is consistently in the top-15 of the most cost-competitive producers of sugar globally, with its sugarcane production over the past five seasons (2017/18 to 2021/22) averaging 18.1 million tons. The average sugar production over the same period was 2.05 million tons of sugar. However, this performance in cane and sugar production is being threatened by the poor cane milling performances over the past few seasons, which has led to the compounding effect of carry-over cane. Carry-over is sugarcane on a farm that a grower was going to harvest during the season, but which he was forced to carry over to the next season. In most cases the carry-over cane for the 2022/23 season in the Coastal and Midlands milling areas is estimated at 20% of the total in-season cane production. Some mills, like Noodsberg, have been worse off in the 2022/23 season, with an estimated 40% carry-over. Therefore, growers are unable to deliver 20 to 40% of their sugarcane to the mills and must bear the effects of an erratic cashflow and lower revenue, as well as the added interest costs. This paper analyses the impact that the estimated carry-over cane has on the growers’ finances by considering the lost revenue in a period of unprecedented input-cost increases. This will be done by using the SA Canegrowers 2020/21 Large-scale Grower Cost Survey data, as well as the forecast models for the Coastal and Midlands mills for the 2022/23 season.

The South African sugar industry has had some major challenges over the past few seasons. To mitigate the risks facing the industry, the Sugar Industry Master Plan, which provides the plan and framework for ensuring that the sugar industry survives and thrives, was formulated in 2019 and signed in 2020. Subsequently there have been a multitude of crises, both domestically, with the severe floods in the coastal regions and the milling capacity constraints at some mills, and internationally, with the fertiliser price crisis that began because of Covid-19-related logistical problems, the very high gas prices, which are a major input in fertiliser production, followed by the high demand for fertiliser, due to the rising global agricultural commodity prices. The Russian invasion of Ukraine, and the subsequent war, have led to further oil and gas price increases, which have compounded the already-complex cost scenario facing South African growers. Farmers are price-takers in the market, so they must reduce costs in a low-price environment to remain profitable. Bearing these crises in mind, along with the already-established Sugar Industry Master Plan, where growers and millers agreed to an annual increase of the notional sugar prices according to the Consumer Price Inflation (CPI) rate. These increases in CPI, however, do not come close to matching the steep rise in production costs over the past few years, with the 2022/23 season highlighting this fact. This paper, using the 2020/21 SA Canegrowers Large-Scale Grower Cost Survey data forecast to the 2022/23 season, will show the effect that the severe input cost increases have had on growers and the need for above-CPI national price increases.

SA Canegrowers Research: Agriculture - 2023/24 continued

Cane contractors play a critical role in the sustainability and profitability of cane growers in the sugar industry. The Small-Scale Growers (SSG) sector of the industry relies mostly on cane contractors for its cane-growing activities, from planting, ratooning and harvesting. This therefore means that the contractors’ performance is critical for ensuring that the growers deliver quality cane. A study was conducted in 2019 by SA Canegrowers (Dube and Nicholson, 2019) on the relationship between SSGs and contractors within the sugarcane industry. One of the outcomes of that study highlighted the importance of the institutionalisation of contractors within the sugar industry (Dube and Nicholson, 2019). This paper seeks to provide a case study analysis on the adoption of the cane contractors’ Code of Conduct across the mill areas.

Since the 2000/01 season, the change from the sucrose-based to the Recoverable Value (RV) cane payment system has aimed for growers to minimise the fibre and non-sucrose content in their cane deliveries. The RV formula also included the addition of the ‘c’ and ‘d’ factors, which are applied to the fibre and non-sucrose cane content, respectively. To reduce the vast inter-season volatility of these factors, three-year rolling average values were included in their calculations. The ‘d’ factor is recalculated monthly during the season, whilst the ‘c’ factor remains constant for the full season. The formulae for the ‘c’ and ‘d’ factors are displayed below and, according to the RV formula, an increase in each factor results in a reduced RV.

‘c’ factor = tons sucrose in bagasse / tons fibre in cane Equation 1

‘d’ factor = (1 – [m x PM / RS/ES x b x PS]) x b Equation 2

where: M is the industry’s average molasses yield per unit of non-sucrose delivered; PM is the industry’s notional average realisation per ton of molasses; RS/ES is the industry’s average unit recovery of saleable sugar (S) from the estimated sugar (ES)); b is the ERC ‘b’ factor [(tons non-sucrose in molasses and sugar) / tons non-sucrose in cane) x (tons sugar in molasses / tons non-sucrose in molasses)]; and PS is the industry notional average realisation per ton of saleable sugar. After more than twenty seasons of utilising the RV cane payment system, a time-series analysis of these two factors was conducted from the 2000/01 season to the 2022/23 season. Firstly, this poster illustrates that the ‘c’ factors have increased steadily from 0.0195 in 2000/01 to 0.0298 in 2022/23, which represents a rise of over 50% throughout the review period. This is because more sucrose is being lost to bagasse or reduced front-end extraction, which decreases the overall industry revenue. Secondly, it has been more volatile due to the more complex ‘d’ factor equation, but there has also been an overall increase. Starting with a value of 0.424161 in 2000/01, it fell to under 0.40 for many seasons; however, it has risen sharply since 2019/20 and ended at a record high value of 0.477753 in 2022/23. Although there are other reasons, the recent rise can largely be attributed to the overall higher industry losses of sucrose to molasses. Therefore, both of these factors, in isolation, have led to a decline in the RV cane content and industry revenue. In addition, a sensitivity analysis was compiled by using the high (Komati), mean (industry) and low (Maidstone) final home mill cane quality ranges from the 2021/22 season, to display the impact of the RV cane content. Compared to 2000/01, the RV cane content has been negatively affected by these factors by a range of -0.22 and -0.27 units in 2021/22, with a greater impact resulting from the poorer cane quality, e.g. its higher fibre and non-sucrose cane content. More specifically, when using the 2021/22 factors, it was found that there was, on average, a 0.029 RV unit decrease for every 1 unit increase in fibre and a 0.046 RV unit decrease for every 0.1 unit increase in non-sucrose. If the rising trends of both of these factors continue, the detrimental impact of the RV content will be enhanced.It is recommended that these negative trends need to be taken into account, together with the analysis of the cane quality changes. Growers must continue aiming to reduce the fibre and non-sucrose cane content in their deliveries, and the Mill Group Boards should consider these factor changes analysing their quality and season RV content estimates. Furthermore, when comparing the results, researchers are advised to focus on specific cane quality variables instead of overall RV cane content. This analysis suggests that the overall industry revenue has been negatively affected by the poor value chain performance, and this ought to be further investigated.

SA Canegrowers Research: Agriculture - 2022/23

In April 2018, the South Africa government implemented a tax on sugar added in non-alcoholic Sugar-Sweetened Beverages (SSBs), called the Health Promotion Levy (HPL). This study estimated the financial impact of the HPL, specifically on sugarcane growers in South Africa. The estimation was conducted across three annual seasons based on the final Recoverable Value (RV) prices paid to sugarcane growers in South Africa, compared to a hypothetical RV price, without the reduction in sugar sales to the SSB sector. The HPL resulted in the cost of sugar for SSB manufacturers rising above the threshold level and almost tripling instantly on 1 April 2018. Many SSB manufacturers in South Africa swiftly reformulated their product mixes by substituting sugar with artificial sweeteners, which resulted in a significant demand decrease for local sugar in South Africa, which is currently the greatest source of industry revenue. Sugar sales data over three seasons indicate that local sales to SSB manufacturers have been reduced by approximately 50% and contributed to an initial 14.6% decline in the RV price in 2018, as South African sugar industry legislation prescribes that the equivalent decrease in sugar sales be exported at lower prevailing world prices. The annual average large-scale SA Cane Growers Cost Survey results for rainfed and irrigated regions are analysed to demonstrate the negative impact of the HPL on the growers’ returns. The earnings before interest, the management salaries, as well as the tax and depreciation are compared in the two scenarios over three seasons.

The Recoverable Value (RV) cane-payment system has been utilized in the South African sugarcane industry since the 2000/01 season and compared to the previous sucrose-contentbased payment system, the RV formula aimed to incentivize sugar cane growers to minimize the fibre and non-sucrose cane content. After two decades of using the RV payment system, a review of the macro-environment changes over time was conducted. This paper provides the trends of sucrose, non-sucrose, fibre and overall RV cane content, pre- and post- the RV cane payments system, at a Mill Supply Area (MSA) level. For inclusivity, the movements in the ‘c’ and ‘d’ factors, included in the RV formula, are also analysed. A seasonal dataset is used to analyse each of the 14 MSAs in South Africa for the period 1996/97 to 2020/21. An average value from the 1996/97 to 1999/20 seasons is used as the ‘base’ season, which is compared to each season since 1996/97. The results suggest that, since the introduction of the RV payment system, there have generally been increases in sucrose content, but underwhelming changes to fibre and nonsucrose cane content in most MSAs. The ‘c’ and ‘d’ factors have generally increased, which negatively impacts RV. Many MSAs have experienced an increase in fibre and non-sucrose, which may have negatively affected the throughput and sugar recovery of the mills. The reverse could also apply at some MSAs, where the degradation of factory performance increases the harvest-to-crush-delay, which negatively influences the non-sucrose. These areas can be investigated further. Other recommended studies include analysing the effect of the length of the milling season changes on cane quality, the choice of cane variety in the RV payment system, and a potential review of the intended effectiveness of the variables included in the RV payment system.

SA Canegrowers Research: Agriculture - 2020/21. Due to the Covid-19 pandemic and the subsequent economic lockdown no research was submitted for publication or review during the 2020/21 financial year

SA Canegrowers Research: Agriculture - 2019/20

Small-scale grower (SSG) sustainability continues to be under severe pressure due to low yields, increasing production costs and the lack of economies of scale. In a renewed effort to support the Small-scale and Land Reform growers, the sugar industry approved an immediate transformation fund worth R172 million for the 2018/19 season. This fund has eight key interventions to accelerate transformation in the sugar industry. Interventions 1, 3 and 5 of the interventions are to provide direct financial relief to SSGs within the sugar industry. Where intervention 1 is a grant cane payment, intervention 3 subsidises sugarcane transport costs and intervention 5 subsidises sugarcane grower levy costs. This paper aims to estimate the potential impact that these interventions have on SSGs.

Small-scale sugarcane growers (SSGs) have significant challenges affecting their production, such as low yields, rising costs and poor quality sugarcane delivered. SSGs in most cases rely on contractors for planting, ratoon management, harvesting and haulage of sugarcane. The relationship between the two parties is therefore critical to ensure that quality sugarcane is delivered to the mill. The purpose of this research was to understand the dynamics of SSG contracting systems in certain mill areas, to highlight issues in contractor services and provide recommendations for solutions to challenges highlighted by growers and contractors.

SA Canegrowers Research: Agriculture - 2018/19

Overloading heavy vehicles is a road safety and cost concern for both heavy vehicle owners and end users of transported products. Overloading causes premature road deterioration and increased vehicle maintenance, and these contribute significantly to South Africa’s poor road safety record. The South African National Department of Transport incorporated the campaign against overloading on its roads as a safety strategy. A self-regulating initiative called the Road Transport Management System (RTMS) was partially introduced in 2008 to address overloading in the South African sugar industry and be in line with the National Department of Transport’s campaign for a road safety strategy. This paper discusses the successful collaboration of various stakeholders in reducing vehicle overloads in the South African sugar industry from 2007 to 2016. 

“By 2050, there will be around 10 billion hungry people in the world and less farmland and resources. We believe there is a need for young leaders to be engaged in finding sustainable agricultural solutions to the growing global need for safe, nutritious food. Only by inspiring our youth to pursue careers in science and agriculture can we continue to advance sustainable and innovative agricultural practices and ensure the security of our future food” (Youthagsummit, 2017). Young people are the future of farming and their participation in the agricultural sector is crucial for sustainable development. Succession planning is therefore needed to avoid the decline in family farming, poor transfer of knowledge and skills to subsequent generation of farmers (Naamwintome and Bagson, 2013). This study aims to provide the benefits of promoting youth participation in the South African sugar industry; it also aims to identify existing programmes to support youth in agriculture in South Africa, while assessing the extent to which youth in agriculture programs promote future sugarcane farming in South Africa. Lastly, the study will recommend strategies to better promote young future cane farmers.

South African sugarcane growers have experienced a gross margin squeeze over the past decade, mainly due to above inflation input cost increases. Simultaneously, cane yields have declined. With limited vertical expansion potential in the value chain, grower focus has been on streamlining input costs. However, there is potential for sugarcane growers to increase their revenue by improving on farm efficiencies. To achieve this, the grower must prioritise opportunities and implement effective changes. This paper focuses on highlighting the potential grower quantifiable gains, using the ‘Back to Basics’ decision support tool. SA Canegrowers, with assistance from SASRI extension on the south coast, developed the Microsoft Excel® based model, which quantifies the benefit of improving 15 on-farm operational activities. Some of these activities include topping height, base cutting, harvest-to-crush-delays, ripening, timing of herbicide application, bundle size, and increased average harvest age. SASRI reported research results are used to determine the conservative potential gains for each activity, which is then converted into monetary terms using the current season RV price. 

The South African Cane Growers’ Association (SACGA) has since 2012 taken part in the agri benchmark network based at the Thünen Institute of Farm Economics in Germany through the South African network partner, the Bureau for Food and Agricultural Policy (BFAP). With the aim of strengthening the output of the Large-Scale Grower Cost Survey data, SACGA has researched and developed ‘Typical Farm’ models for the North Coast, South Coast, Midlands, Zululand and Mpumalanga regions. Due to this expansion of the South African sugarcane network of farms, SACGA has an industry wide set of models. The methodology employed is used to validate the current cost survey data results from what are called ‘Typical Farms’, which describes a typical farm as a modal farming enterprise under similar conditions with modal characteristics such as size, organisation and practices. 

Chemical ripening of commercially grown sugarcane in South Africa is a well-researched and established method of enhancing sucrose content and reducing non-sucrose content. A search of the literature revealed that there has not been a study quantifying the benefit at a mill supply region scale. The Recoverable Value (RV) payment system used in South Africa incentivises growers to maximise sucrose content while minimising fibre and non-sucrose content in cane produced. The aim of this research was to quantify the benefit of early season chemical ripening for both growers and millers at a mill supply region scale. 

SA Canegrowers Research: Agriculture - 2017/18

A FINANCIAL ESTIMATION OF THE MILL AREA-SCALE BENEFITS OF VARIETY ADOPTION IN SOUTH AFRICA: A SIMPLISTIC APPROACH - M KADWA

The South African Sugarcane Research Institute has a well-established commercial variety breeding programme that is funded by the industry. Studies estimating the value delivered by varieties on commercial fields and at the mill-scale are limited. Therefore, SASRI initiated a study in conjunction with the South African Cane Growers’ Association, and in collaboration with two milling companies, to estimate the potential increased industry proceeds of adopting new varieties on a farm (per hectare) and mill area-scale level (total RV tons harvested). While there are alternative methods to estimate the financial benefit, in this study, the analyses were compiled from two datasets: the Illovo Sugar (SA) Sezela estate and RCL Nkomazi production area.

The recommended age at harvest for coastal rainfed cane on the North Coast was 18 months, until 1978, when eldana’s presence became recognised as a significant threat. Various changes in agronomic practices were soon adopted to minimise the impacts of eldana on sugarcane yield and quality, the most effective being a reduction in harvest age to 13-15 months. While effectively minimising eldana damage, a less than optimal crop age at harvest has resulted in increased costs due to the increased area to be ratooned, as well as lower revenues resulting from a reduction in cane quality and yields. However, in late 2015, the registration of new eldana suppression chemicals utilising diamide and oxadiazine chemistries has augmented the opportunity for the lengthening of growing cycles in coastal and hinterland regions.

Rainfall since 1948 was assessed in order to highlight the plight that growers in the Zululand region of the industry have faced. Analysis of the trend included an attempt to take a forward-looking view on future sustainability practices given the weather trends, and the potential use of weather derivatives to mitigate risk. SASRI rainfall records for the Felixton catchment area were used to make the long-term rainfall assessment to determine whether the region is facing a long-term drying off of the climate. An initial weather derivate model was built to assess suitability for mitigation of adverse rainfall risk. The conclusion reached was that the Felixton region has been experiencing decreasing rainfall over an extended period. Mean annual rainfall from 1948 to 2004 was 1038.1 mm. A total of 15 of the 16 years from 2001 to 2016 had annual rainfall below this level. 

The South African sugarcane grower is under increasing pressure, as higher input costs and lower revenue margins threaten overall sustainability. A significant cost of up to 13% of the total planting costs and 18% of ratoon management costs are attributable to herbicides and their application, mainly to control creeping grasses such as Cynodon dactylon. The way in which modern agriculture has tackled these issues is through gains in research and development, in this case the potential for the South African Sugar Research Institute’s (SASRI) development of a Genetically Modified (GM) sugarcane variety. This paper analyses and estimates the cost savings and benefits that could hypothetically be achieved through the implementation of a GM sugarcane variety, modified for both herbicide tolerance and insect resistance (Bt) to Eldana saccharina. 

The South African sugar industry has faced many challenges, of which the most noticeable have been depressed real RV prices as well as increasing real input costs, which, together with a four-year drought, have put its sustainability under threat. To enhance sustainability, a model of diversified production practices has been investigated, which include the production of biogas from sugarcane residue. It is envisaged that the production of biogas through digestion will bring with it various benefits to all growers. The production of biogas from cane residue is relatively new to the sugar industry and has not been practised extensively. Initial results from the pilot plant are proving rewarding and are achieving the aim of reducing the growers’ dependence on external energy sources by producing significant volumes of gas, enhancing grower sustainability through a closed loop system by substituting a significant amount of the required nutrients and by ensuring an additional revenue stream. This paper deals with the biogas pilot plant that has been built in a Joint Venture by the South African Cane Growers’ Association and Crownhill farm.

A TIME-SERIES ANALYSIS OF LARGE-SCALE GROWER INPUT COSTS IN THE SOUTH AFRICAN SUGARCANE INDUSTRY: 2000/01 TO 2014/15 - RJ NICHOLSON

There is an increased focus globally on the economic impacts of research and development. Farmers are more unlikely to adopt new technologies and management practices, if they have an adverse impact on profitability. This is mainly due to lower gross margins, resulting from above-inflation input cost increases. In the sugarcane industry, the gross margin squeeze has been more prominent, due to gradual decreased global yields and lower world prices since 2010. Therefore, a greater understanding of sugarcane production economics is required in the sugarcane research environment. To aid this process, the South African Cane Growers’ Association has been conducting large-scale grower surveys since 1926/27. The survey results are currently used for various industry purposes. 

SA Canegrowers Research: Processing - 2016/17

This paper describes the general derivation and development of the RV formula for distributing proceeds between Growers in the South African sugar industry. The formula introduces the parameters of sugarcane quality such as sucrose, fibre and non-sucrose content of cane and the financial parameters such as the value of the sugar and molasses made from the sugar cane.

SA Canegrowers Research: Agriculture - 2016/17

This paper, through an in-depth analysis, investigates special cases of women’s involvement in sugarcane production and the triumphs of these female growers against adversity. The paper highlights their complex socio-economic circumstances and their contribution to the industry, production and innovation. The industry supports female farmers and has indicated a desire to see more women graduate to becoming farm owners and ultimately taking up leadership positions within industry structures.

Sugarcane tops and leaves, which are becoming more available in the fields due to mechanical harvesting, could be an extra source for the sugarcane industry to produce more energy or alternative products in the form of electrical power using cogeneration, or as cellulosic ethanol. One ton of sugarcane, after harvesting, leaves a residue of around 140 kg of trash in the field. This amount of biomass has the same energy content of dry bagasse from the same ton of cane. However, the logistics of trash collection should be addressed before trash utilisation projects are developed. 

SA Canegrowers Research: Agriculture - 2015/16

In recognition of the complexity of SSG livelihoods, it must be acknowledged that the sustainability of SSGs can only be achieved through the following: comprehensive Hurly KM et al Proc S Afr Sug Technol Ass (2015) 88: 318 – 336 333 development of rural areas in partnership with all stakeholders; using a multi-stakeholder approach; embracing ISO 26000 principles; and building on the past successes of industry institutions. This needs to be undertaken with a special focus on rural communities and their dynamic livelihoods, the use of contractors and the vital role that the youth play in ensuring the long-term viability of the South African small-scale cane growing sector.

Rapidly declining small-scale grower (SSG) sugarcane production in the Umbumbulu tribal region highlighted the necessity to find an economic and practical solution to restore higher production. Challenges faced by growers included issues of access to finance for replant and ratoon management. A one-tenth hectare seedcane model was considered ahead of one hectare plots.