SPEECH BY HON SATYA VEYASH FAUGOO, MINISTER OF AGRO INDUSTRY, FOOD PRODUCTION AND SECURITY ON THURSDAY 25 JUNE 2009 ON THE OCCASION OF THE ANNUAL GENERAL MEETING OF THE MAURITIUS CHAMBER OF AGRICULTURE
Mr Thierry Merven, President of the Chamber of Agriculture
Mr Jocelyn Kwok, Secretary General
Members of the Chamber
Ladies & Gentlemen
I am pleased and honoured to be present amongst you this morning, the more so as it is the first time I am attending this Annual General Meeting of the Chamber of Agriculture since assuming the office of Minister of Agro Industry, Food Production & Security.
2. I would like to thank the Chamber for giving me this opportunity to address its members and other important stakeholders in the agricultural sector.
3. The Chamber of Agriculture has always been and still is a privileged partner of Government. It has always cooperated with the authorities for the formulation and smooth implementation of policies regarding the development of the agricultural sector.
4. The agricultural sector, throughout its history, has been confronted with numerous challenges and difficulties. Thanks to the efforts and collaboration of all stakeholders and to our innovative spirit and creative mind, we have been able to successfully overcome most of these difficulties. We have even done better by turning the challenges into opportunities.
5. Our agriculture, despite the emergence of new economic sectors, still remains an important pillar of the economy. Agriculture, in particular the sugar cane sector, continues to be an important earner of foreign exchange and a source of employment. Sugar cane has now been recognized to have a multifunctional role. On the other hand, the agri food sector is assuming more importance in the light of new challenges following the world food crisis. The country will always need to produce food to feed the population and we should, therefore, ensure that we produce an acceptable volume of food to enable the population to be adequately fed and nourished.
6. The world has been hit by two successive crises, namely the food crisis in 2007 and the financial crisis which is still persisting. Mauritius which has suffered from the effects of these crises is still trying to cope with this difficult situation. It has also seen its sugar industry being hit by the reform of the EU sugar regime in 2005.
7. Indeed, much apprehensions were expressed following the decision of the EU to cut drastically the export price of sugar by 36 per cent. The fear was further intensified with the subsequent decision of the EU to put an end to the Sugar Protocol. The Sugar Protocol, as you all know, has, for decades, ensured a guaranteed quota and a guaranteed price for our sugar on the EU market. This has enabled the country to obtain a regular flow of income in foreign currencies. This income has allowed the country to honour, to a large extent, its import bill. It has also been judiciously invested in emerging sectors such as tourism, textile and the services sector which have broadened the economic base. The diversified base has brought resilience to the economy and is helping us to face the financial crisis today.
8. Fortunately, Government and the Sugar Corporate sector have been quick to react to these challenges and in a short span of time we have been able to come up with the Multi Annual Adaptation Strategy. With the timely implementation of measures contained in the MAAS, such as the VRS and ERS, the centralization of factories, the Field Operations, Regrouping and Irrigation Project and the setting up of clusters, we are beginning to find a ray of hope and see light at the end of the tunnel. I must here extend my appreciation to all members of the MCA who have made vital contribution in these endeavours.
9. Indeed, the progress achieved is quite impressive. We have last week witnessed the opening of the first flexi factory at La Baraque in the South which will produce refined white sugar for export as from this year. I also had the opportunity to visit the refinery that is being set up at FUEL. The reform of the sugar cane industry and its modernisation are gathering momentum. It is the wish of one and all to see the sugar sector getting out quickly of its present difficulties and moving on the track of progress and development.
10. The announcement of the 36 per cent cut in sugar price and the end of the sugar protocol might have created panic among the planting community. We have noticed that there has been an increasing demand for land conversion for real estate development. We have also received reports that small planters are discouraged and are abandoning cane cultivation.
11. In the light of what we are witnessing today, we are confident that the sugar cane industry still holds a promising future. Sugar mills will still require cane to operate with optimum capacity to produce the different products of the clusters. I would, therefore, like to make an appeal to the planting community to continue growing cane for its own benefit and for the benefit of the sector and the country at large.
12. We are still left with two major issues that need to be addressed urgently. The first is the reform of service providing institutions financed by cess. With the application of the 36 per cent reduction in sugar price as from 1st October 2009, revenue of planters will diminish. Government is alive to the fact that planters cannot be asked to continue paying the same amount of cess as at present. The second issue concerns the metayers. Despite agreement reached on this matter, no tangible progress has been made. We shall have to sit down soon to address these two issues.
13. Government, on its side, will continue to provide the necessary support to all stakeholders. We are also pursuing our struggle both at the ACP/EU level in Brussels and at WTO level in Geneva to safeguard the interest of the industry.
14. Ladies and Gentlemen, let me turn now to food security. As you are aware, the world food crisis in 2007 had created much havoc and chaos in many countries which have faced food shortages because of their incapacity to produce or import due to soaring prices. Fortunately, we have not gone through this traumatic experience. In fact, Government has again acted promptly and has set up a Food Security Fund of Rs 1 billion in the 2008/2009 budget. Within a short span of time, my Ministry, in collaboration with all stakeholders including the Chamber of Agriculture, has prepared the Food Security Strategic Plan which was launched in January this year. This plan, as you are all aware, aims at increasing production in the different subsectors, namely food crop and fruits, livestock, dairy products and fisheries. This has become necessary in order to ensure food security and at the same time to gradually reduce our dependency on imports.
15. Mauritius is importing around 70 per cent of its food requirements and the import bill is around Rs20 billion. We believe that this represents an interesting opportunity for our entrepreneurs who can produce many of the products that we are presently importing. In fact, my Ministry has received numerous agricultural projects which are competing for funds under the Food Security Fund. These projects are being currently examined. However, the biggest constraint remains the availability of land. The total demand for land has exceeded 3,500 arpents. The 1,000 arpents out the 2000A of MSPA land earmarked to be transferred to Government for agricultural projects will, therefore, not suffice to meet the actual demand.
16. My Ministry is considering the setting up of an Agricultural Land Bank where data on all state agricultural lands and abandoned private lands formerly under agriculture will be compiled. The Land Bank will enable a proper monitoring of land utilisation and the lease of land to prospective planters, breeders or agri–entrepreneurs for the implementation of their projects.
17. Speaking of land, my attention has recently been drawn to the fact that sugar estates are not providing adequate land to planters as per the provisions under the SIE Act for diversification purposes. I would like to make an appeal to the sugar estates to comply with the legal requirements and to make available the required extent of land to the planters concerned. If they can provide more land, this would be better still as this will enable us to produce more.
18. Government would like to see a greater participation of the corporate sector in agricultural projects. We know that Medine Sugar Estate and SUDs have embarked on agricultural diversification projects which are giving very interesting results. We, however, do not know if other major stakeholders are engaged in such activities. In fact, we have been advised that data on agricultural production by the corporate sector may not be furnished to the Central Statistical Office. If such is the case, I would like to make an appeal for a regular submission of such data as it is very important and crucial for policy makers to know what is being actually produced to be able to take the right decisions at this juncture as food production and food security stand high on the agenda of Government.
19. As you may be aware, the measures enunciated in the Food Security Fund Strategic Plan have started to be implemented. For example the Potato Seed Purchase Scheme, the Onion Seed Purchase Scheme and the Food Crop Insurance Scheme have already been introduced to boost up production of the two commodities. Moreover, Government is aware that to attain a satisfactory level of food security, efforts at National Level will not suffice. Initiatives have to be taken at regional levels and the participation of the Corporate Sector is necessary. I invite the Chamber of Agriculture to support the cross border initiative on food security that my Ministry is promoting.
Ladies and Gentlemen
20. As you may be aware, Vita Grain Ltd, a Singaporean Company has expressed interest to cultivate hybrid rice seeds in Mauritius. Government is giving necessary support to this project and an MOU has already been signed between the Company and Rose Belle Sugar Estate for the lease of land. The company also plans to cultivate rice eventually in Mauritius and for this purpose more land will be required. This project appears to be very interesting and if successfully implemented will ensure a regular supply of rice on the market and reduce our imports of that commodity.
Ladies and Gentlemen
21. The agricultural sector has undergone numerous changes in the past four years and many projects have been implemented and remarkable progress achieved. I would once again like to congratulate all the stakeholders for their participation and their collaboration.
22. I would now like to conclude by thanking once again the Chamber of Agriculture for its dedication to the cause of the agricultural sector and for its collaboration and cooperation with Government and with my Ministry in particular for the development and advancement of agriculture in Mauritius. We look forward to your continued collaboration and cooperation.
Thank you for your kind attention.