THE government has asked financial institutions to issue loans to investors who wish to establish small scale sugar factories in a move to boost the country’s output.
The contribution of the small scale sugar factories will reduce the country deficit that has dropped to 40,000 tonnes last year from 125,000 tonnes in the last five years.
Agriculture Minister Prof Adolf Mkenda made the remarks in Morogoro when toured Mtibwa Sugar on Tuesday saying that monopoly by few major sugar factories has also been the factor for sugar shortage and lack of market of sugarcane from out growers in the country.
“I call upon financial institutions to give loans to Tanzanians with intent to invest in the sector. We cannot continue with monopoly by some few sugar industries,” Prof Mkenda emphasized.
He said solution on sugar crisis would be permanent if there would be competition among the industries, noting that investment climate was good after the government had managed to control illegal sugar importation which was killing the market of the locally produced sweetener.
“If we have many industries we will create competition, therefore, prices of sugarcane from farmers would increase,” Prof Mkenda stated.
His statement came following complaints from farmers in Mvomero district who complained that the Mtibwa Sugar was buying sugarcane at lower prices compared to Kilombero Sugar Company.
Farmers argued that it was surprising that Mtibwa Sugar buys a tonne of sugarcane at 63,000/- while their fellow farmers in Kilombero district sell their sugarcane to Kilombero Sugar Company at a price of 110,000/- per tonne.
Prof Mkenda said nepotism by the Mtibwa Sugar when buying sugarcane from farmers forced several sugarcane outgrowers to stop cultivating the crop. Tanzania Agricultural Development Bank (TADB) expressed its commitment to financially support potential investors in the sugar sector.
TADB Managing Director Japhet Justin said the bank had already started to loan investments in sugar production and processing in efforts to support the government to address the country’s sugar gap. For instance, in collaboration with other financial institutions the TADB has loaned the construction of sugar factory in Bagamoyo district, Coast region.
“We will therefore go to end this problem because opportunity is big,” Mr Justine affirmed, adding that the amount of loan to an investor would depend on their proposals.
In Morogoro region, the bank has also funded sugarcane out growers in a bid to increase farm production to feed the industries. General Manager of the Mtibwa Sugar, Stanley Rau, explained that they have embarked on a project to expand the plant and increase production capacity.
“We made decision following control of illegal sugar imports since the government under President John Magufuli,” he said.
Mvomero MP Jonas Van Zeeland said sugarcane farmers in the district were struggling to sell their sugarcane to Mtibwa factory.
He called for establishment of small scale industries in the area in order to guarantee the market of the sugarcane.
“We still have enough land for investment, we ask the government to bring more investors here,” he appealed.