Chairman for the ISO Council
Ladies and Gentlemen
Bula vinaka and a very good morning to you all.
First of all, I want to again add Fiji’s voice to the rest of the global community in expressing our strong condemnation of the terrorist atrocities in Paris. Our condolences and solidarity are with the French people, and we will stand with them and with people of goodwill everywhere to defeat these forces of evil.
I also want to begin by conveying my warm congratulations to everyone involved in the successful hosting of the 47th Council meeting in Antigua, Guatemala, in June.
I very much regret that a crucial meeting of the Melanesian Spearhead Group, our alliance of Pacific island States, prevented me from attending. However, I remained engaged from a distance with the substance of the meeting and the progress made, and I’m very pleased to be with you all in London this week.
At the 46th Council meeting last year, many of you will remember that I briefed you on our return to parliamentary rule in Fiji in the first genuinely democratic election in our nation’s history. We have since completed over a year of our new democracy based on equal votes of equal value, a common and equal citizenry and a single national constituency that encourages unity and cohesion. And all things considered, the year has been a great success.
For the first time, Fiji is one nation, one people, with a common identity and a common name. And Fijians of every background now have equal opportunity and a sense of truly belonging, that a large number of our citizens have never known before.
We are also more confident about our nation’s direction and prospects than at any other time in our 45 years of independence. And nowhere is that sense of optimism more evident than in our economy.
As confidence builds, we are in the throes of one of the longest running periods of economic growth in our history – 5.3 per cent last year, a performance that eclipses our larger neighbours.
In our parliamentary democracy, we are seeing all the vigorous debate and difference of opinion that characterises democracy everywhere. Indeed only yesterday, our Parliament approved the 2016 National Budget after 4 days of spirited and extended debate.
Speaking personally, I am most proud of our achievement in introducing free education in our primary and secondary schools for the first time. Ending the nightmare for low-income families of not being able to properly educate their children. And increasing the access of ordinary Fijians to higher education in our universities and technical colleges with an expanded program of scholarships and tertiary loans.
We have set ourselves the goal of becoming a clever country – to equip our people with the skills they need to lead more productive and satisfying lives. And to enable Fiji to make a greater contribution to the advancement of our own region and the rest of the world.
We already make a significant contribution to United Nations Peacekeeping. But we want to strengthen the voice of the Pacific in world forums on the great issues of our time. And also take the Fijian-Made brand of quality goods and services to many more markets around the globe.
With our foreign policy of being friends to all and enemies to none, we are making new friends and rebuilding some of our other relationships – re-establishing old ties with some of our traditional partners who didn’t approve of our reform process and turned their backs on us.
These nations are coming to see the merits of Fiji resetting its national compass by upending the old order of inequality, division and corruption that had held us back since Independence. And we are encouraging them – and the rest of the international community – to engage with us in forging a new era of cooperation and friendship.
We are grateful to the European Union for restoring European Development Fund support to Fiji, and we expect to sign financing agreement documents for 28 million Euros under the 11th EDF in the first quarter of 2016.
Mr. Chairman, Fiji and its Pacific neighbours are gravely concerned about the threats posed to our islands and our way of life by climate change. The entire world is finally coming to grips with the need to confront the challenge that climate change presents, in the form of rising sea levels and extreme weather events. But we in the Pacific are already living with the most alarming consequences of this crisis. One that we have not caused but from which we are suffering, and will suffer, the most.
Climate change poses an immediate threat to our people, our culture and our sources of livelihood. At the third summit of the Pacific Islands Development Forum held in Fiji in September, Pacific Leaders agreed to lobby our development partners in every global forum to step up their efforts to address this crisis. To persuade the nations that contribute most to global warming, to commit to drastic and binding cuts in carbon emissions.
This threat, Mr. Chairman, extends way beyond the Pacific to all small island States and low lying countries of the world, including some represented here today. In Fiji, we have identified more than 800 communities that are directly threatened and more than 40 settlements that already need to be relocated to higher ground and that work, has already begun.
So for us, this crisis is immediate, not a challenge to be faced sometime in the future. And it is having a direct effect on agriculture, including cane production. Seawater is beginning to intrude on our cane fields as a result of broken flood gates. Rail-lines that carry cane to our sugar mills have been corroded by seawater, and we will have to invest significant sums to re-mount and reroute them.
Aside from rising sea levels, we are deeply concerned about the increasing frequency and ferocity of the extreme weather events that are also associated with climate change. We have had two years of drought and severe storms occurring even outside the normal cyclone season. And this is already putting all of our agriculture in Fiji under stress, including the cane sector. So we are already in clear and present danger.
Fearful of more complacency, more excuses not to make the hard decisions required, my fellow Pacific Island heads of government will join me in leading the charge for drastic cuts in carbon emissions at the Cop-21 conference in Paris at the end of this month. And I ask you all at this important gathering to give us your wholehearted support. We need to add your voice to ours in saying that we are at five minutes to midnight and soon, it will be too late.
Mr. Chairman, our sugar cane industry remains a mainstay of our economy – our second biggest revenue earner supporting, directly or indirectly, some 200,000 Fijians or around 25% of our population.
So sugar cane is central to our economy, our future and the livelihoods of a great many Fijians. And it is irreplaceable economically, especially in the near term. It cannot and must not be allowed to decline. All industry stakeholders, the Government included, must ensure that the industry not only survives but thrives. So we are making it a national priority to put in place all those measures needed to generate the same optimism about the future of sugar as we have about the Fijian economy generally.
To this end, Mr. Chairman, we are determined to extract the maximum sugar possible from every stick of cane. And to produce other products with value added, such as refined and specialty sugars; to produce renewable power through cogeneration; to manufacture clean and renewable fuels such as ethanol. And, as we reported at our last meeting, to pursue other uses for sugar cane, such as pulp and building materials.
We must extract every economic advantage we can from the sugar cane plant and the more productive and resilient varieties we continue to develop. That is the key to the future prosperity of our industry and the way we can protect ourselves from fluctuations in global prices. As well as the protectionist policies of larger economic powers.
Our blueprint for the industry remains the Strategic Action Plan 2013-2017. And we are doing all we can to ensure that we achieve the targets we have set in that Plan.
Fiji’s crushing performance
Our crushing performance, like last year, was again hit by a prolonged drought that started in March. Our planting programme had to be aborted because of the lack of rainwater, and we planted a mere 1,300 hectares against a planting target of 3,000 hectares.
Mr. Chairman, as of 2nd November 2015, two of our four sugar mills completed their crush after 20 and 17 weeks respectively. The other two mills should finish their crush by about 30th November.
Against the crop estimates of 2.1 million tonnes made in March, crop harvested has yielded 1.9 million tonnes. The sugar make was 197,000 tonnes with a TCTS of 8.34.
These figures compare with cane production of 1.83 million tonnes and 226,000 tonnes of sugar with a TCTS of 8.0 in 2014.
Funding for the Sugar Cane Industry in the 2016 National Budget
As part of our continuing efforts to strengthen and consolidate the industry, my Government has increased its allocation for the sugar cane industry in our 2016 budget by 102% to 23.8 million Fijian dollars. There are two components: the operating component, which encompasses labour requirements and related support services; and the capital component, which encompasses investment and future development.
The operating budget is increased by 88% to 5.7 million Fijian dollars, while the capital budget allocation is increased by 119% to 17.8 million Fijian dollars.
An allocation by the European Union of 2.3 million Fijian dollars for Sustainable Rural Livelihood has contributed to the increase in the operating budget.
We have also set aside for the first time in 2016, funds to meet the annual operating budget of the Sugar Cane Growers Council, which for the last 32 years, has been met by the growers themselves.
Government made a conscious and deliberate decision to meet this expenditure—totalling 600,000 Fijian dollars. Because while we cannot influence sugar prices and, consequently, what cane growers get paid for their cane, Government nevertheless acknowledges that cane growers have struggled for many years to make ends meet. So this is a helping hand that Fiji’s growers need and that the nation as a whole is prepared to extend to them.
This initiative will also relieve cane growers of the burden of maintaining their own organisation and give them an incentive to remain on their farms.
In order to strengthen the staffing of the Ministry of Sugar to raise and improve service delivery, an additional 10 staff will be recruited in 2016. For which additional funding of 571,300 Fijian dollars has been allocated for remuneration and related expenditure. This will bring to 20 the total staff of the Ministry of Sugar.
The capital budget, on the other hand, includes allocations for our sugar cane development programme of 5.0 million Fijian dollars; for a subsidy to cane growers on fertilizers of 9.73 million Fijian dollars. And a sum for the maintenance of cane access roads of 3-million Fijian dollars.
We have proposed a cane-planting target of about 5,000 hectares from this allocation, with a focus on growers who have produced a minimum of 50 tonnes per hectare. The rationale here is to gain an immediate positive result by targeting growers who are already motivated, hard-working and productive. Should this planting target be achieved, it would take the total area under cane in Fiji by the end of December 2016 to about 50,000 hectares.
To blend a 50 kilogram bag of fertilizer costs about 45.59 Fijian dollars, and my Government pays a subsidy of 14.09 dollars, leaving cane growers to pay $31.50 per bag. This is still relatively affordable when compared to outside providers, who charge between 85 and 100 dollars per 50 kilogram bag.
The maintenance of cane access roads has an increased allocation of 3-million Fijian dollars from 2.5 million last year. In total, there are about 3,200 cane access roads that need to be maintained each year. The scope of work varies from locality to locality, ranging from simple gravelling to constructing Irish crossings, replacing culverts and building bridges.
The main objective is to make access roads accessible to trucks so that all harvestable cane is transported quickly and efficiently to the mill.
Mr Chairman, I want to say in closing that despite the odds that are stacked against us, we do not intend to give up on sugar cane in Fiji. It is about continuing our program to modernise the industry, to embrace new technology to improve our yields and give us the information we need to make better planning decisions.
It is about continuing our program of extracting as much sugar as possible from a single plant and value adding with new products and by-products. It is about building resilience to the threat posed to the industry by climate change. And it is about constantly scanning the horizon for new markets and working as hard as we can as an industry to give those markets what they require.
The challenge for our industry in Fiji has never been greater, as our preferential access to the European market draws to a close in 2017. But we remain confident that we can meet that challenge as we continue to fast-track our capital projects to diversify our revenue streams.
As Prime Minister and Minister for Sugar, I want to assure the 200,000 Fijians who depend on sugar that we are doing everything possible to give our industry the viable future it deserves – both in their interests and the interests of the nation as a whole.
Vinaka Vakalevu, Thank you.