Parliament has approved a motion to raise the Government guarantee limit for Fiji Sugar Corporation (FSC) borrowings from $95 million for the period of August 1, 2022, to May 31, 2028, to $200 million. Additionally, the FSC will no longer be required to pay the guarantee fee.
Finance Minister Professor Biman Prasad highlighted that, considering the FSC’s financial condition, the Government is already liable for $293 million in guaranteed debts, both locally and internationally. He noted that in the case of a default, which can occur with government guarantees, the Government would be responsible for covering the FSC’s guaranteed borrowings.
Prasad emphasized the importance of collaborating with FSC to manage any fiscal risks and ensure timely communication about potential risks to the Government for effective mitigation planning.
While the Opposition members expressed their support for the motion, they raised concerns as well. MP Semi Koroilavesau pointed out that vast areas of land previously used for sugarcane cultivation now lie unused. He stressed that while the sugar industry’s survival is vital for Fiji’s economy, simply increasing funding for FSC is not a viable solution. Koroilavesau urged the Government to demand accountability from FSC’s management, implement clear operational improvement plans, and tackle broader issues impacting the sugar sector.
Another MP, Viam Pillay, called for an investigation into the frequent breakdowns of sugar mills, which have adverse effects on farmers and transport drivers. Pillay questioned the value of guaranteeing the loan if the ongoing problem of mill breakdowns is not resolved, as these issues lead to harvesting delays, frustration, and income loss for farmers, lorry drivers, and cane cutters. He expressed concern that if these breakdowns continue, particularly during the upcoming rainy season, it would further burden farmers.
Pillay concluded his remarks by urging Parliament to establish a joint Parliamentary Select Committee to conduct a comprehensive review of the sugar industry’s situation.