Parliament has approved a motion to raise the government guarantee limit for the Fiji Sugar Corporation’s borrowings from $95 million to $200 million, covering the period from August 1, 2022, to May 31, 2028. Additionally, the Fiji Sugar Corporation will be exempt from paying the guarantee fee.
During the motion, Finance Minister Professor Biman Prasad highlighted that the government’s exposure due to the Fiji Sugar Corporation’s financial situation already amounted to $293 million in guaranteed debts, both domestically and internationally. He noted that in the case of a default, the government would be responsible for the corporation’s guaranteed borrowings.
Prasad emphasized the importance of collaboration with the Fiji Sugar Corporation to manage any fiscal risks and ensure timely communication to allow for appropriate mitigation plans.
While members of the Opposition supported the motion, they voiced their concerns. MP Semi Koroilavesau remarked on large areas of land that were once used for sugarcane farming but are now unused. He suggested that merely increasing funds for the Fiji Sugar Corporation is not the solution, stating that the government must hold the management accountable and develop a clear operational improvement plan to tackle broader issues affecting the sugar industry.
Another MP, Viam Pillay, called for an investigation into ongoing mill breakdowns that disrupt farmers and lorry drivers. He questioned the rationale behind guaranteeing the loan if the persistent mill breakdowns remain unaddressed, as they hinder harvesting and lead to frustration and financial losses among those involved in sugarcane production.
Pillay noted that the ministry has struggled to resolve these frequent breakdowns and warned that if the situation persists during the upcoming rainy season, it will create further challenges for farmers. He urged Parliament to establish a joint Parliamentary Select Committee to thoroughly examine the state of the sugar industry, despite supporting the motion regarding the government guarantee.