Parliament has approved a motion to raise the Government guarantee limit for borrowings by the Fiji Sugar Corporation (FSC) from $95 million, which was set for the period of August 1, 2022, to May 31, 2028, to $200 million. Additionally, the FSC will be exempt from paying the guarantee fee. During the motion, Finance Minister Professor Biman Prasad highlighted that the Government is already responsible for $293 million in guaranteed debts, both domestically and internationally.
He noted that if there is a default, which is a common occurrence with government guarantees, the Government would be liable for the FSC’s borrowings. Prasad emphasized the importance of collaborating with the FSC to manage financial risks and ensuring that any potential risks are communicated to the Government promptly, so that strategies can be developed to address them.
Opposition members expressed their support for the motion but also voiced some concerns. MP Semi Koroilavesau pointed out the large areas of land previously dedicated to sugarcane farming that are now unused. He asserted that while the sugar industry is vital to Fiji’s economy, simply providing more funding to the FSC is not a sustainable solution. He urged the government to hold FSC management accountable and to implement a clear operational improvement plan that addresses the wider issues facing the sugar industry.
Another MP, Viam Pillay, called on the Government to investigate the recurring mill breakdowns that have negatively impacted farmers and lorry drivers. He questioned the effectiveness of guaranteeing the loan if the ongoing mill issues are not resolved, citing the consistent delays in harvesting that result in frustration and loss of income for farmers and lorry drivers. Pillay expressed concerns that if the ministry fails to address the frequent breakdowns, farmers could face further challenges with the impending rainy season.
While supporting the motion regarding the Government guarantee, he urged Parliament to establish a joint Parliamentary Select Committee to thoroughly examine the current state of the sugar industry.