Parliament has authorized an increase in the Government guarantee limit for the Fiji Sugar Corporation’s (FSC) borrowings, raising it from $95 million to $200 million, effective from August 1, 2022, to May 31, 2028. Additionally, the FSC will be exempt from paying the guarantee fee.
While introducing the motion, Finance Minister Professor Biman Prasad noted that the Government is already exposed to $293 million in guaranteed debts, both domestically and internationally. He emphasized that in case of a default, which is a typical risk with Government guarantees, the Government would be responsible for the FSC’s guaranteed borrowings.
Prasad highlighted the importance of cooperating with the FSC to manage any fiscal risks and ensuring timely communication with the Government regarding these risks to develop mitigation plans.
Opposition members also backed the motion but raised some concerns. MP Semi Koroilavesau pointed out that large areas of land previously used for sugarcane cultivation are now unused, stressing that while the sugar industry is vital for Fiji’s economy, simply increasing funding for the FSC is not a viable solution. He called for increased accountability from FSC management and the implementation of a clear operational improvement plan.
Another MP, Viam Pillay, urged the Government to look into the frequent breakdowns of mills, which have been detrimental to farmers and transportation services. He questioned the benefit of guaranteeing the loan without addressing the ongoing issues with mill breakdowns that disrupt harvesting and cause financial losses for those involved in sugar production.
Pillay expressed concern that if the ministry fails to manage the breakdowns, the impact during the upcoming rainy season will further burden farmers. He suggested the formation of a joint Parliamentary Select Committee to comprehensively investigate the current state of the sugar industry.