National Budget 2005/2006
The sugar industry would need a Special Funding Facility to provide immediate support for the financing of the industry’s investments
The Mauritius Chamber of Agriculture, the Mauritius Sugar Syndicate and the Mauritius Sugar Producers’ Association have submitted a joint memorandum to Government in the context of the forthcoming 2005-2006 National Budget. The main issue raised in the document concern the urgent need for the sugar industry to have access to adequate financial resources for its immediate investments.
As in last year’s memorandum, mention is made of the high level of indebtedness of the industry, which is affecting its profitability and seriously eroding its capacity to pursue its much needed investments. Given that the EU sugar reform is imminent and will have a significant impact on ACP revenue in the short term, it is imperative for the sugar industry to accelerate its restructuring process through the immediate implementation of the proposed Accelerated Action Plan. This will necessitate substantial investments in the short to medium term and calls for the mobilisation of significant financial resources given the tasks to be achieved.
The memorandum highlights that although the EU is committed, in the context of its sugar regime reforms, to provide adequate funding to the ACP sugar suppliers to facilitate their adaptation and more specifically improving their competitiveness, the delay for disbursement of EU support may be quite important and will in the meantime necessitate an alternative source of funding to support the industry’s projects.
Hence, it is proposed that a Special Funding Facility be extended to the sugar sector aimed at providing (i) adequate funds to support the priority investments to be undertaken by the industry and (ii) the necessary support so as to enable the above-mentioned funding facility to operate on soft terms.