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     Government of the Republic of Fiji

  Ministry of Foreign Affairs

    A Better Fiji through Excellence in Foreign Service

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Media Release

PM Statement at ACP Sugar Meet

 pm maputo

STATEMENT AT 12TH SPECIAL ACP MINISTERIAL CONFERENCE ON SUGAR, MAPUTO, MOZAMBIQUE, 24-26 JULY 2011 BY COMMODORE JV BAINIMARAMA PRIME MINISTER AND MINISTER FOR FINANCE, STRATEGIC PLANNING, NATIONAL DEVELOPMENT AND STATISTICS; PUBLIC SERVICE; PEOPLE'S CHARTER FOR CHANGE AND PROGRESS; MINISTER FOR INFORMATION, NATIONAL ARCHIVES AND LIBRARY SERVICES OF FIJI; MINISTER FOR I-TAUKEI; PROVINCIAL DEVELOPMENT AND MULTI-ETHNIC AFFAIRS AND SUGAR INDUSTRY, ACTING MINISTER FOR LANDS AND MINERAL RESOURCES

Mr. Chairman, Honourable Ministers, Your Excellencies, Distinguished Ladies and Gentlemen.  On behalf of my delegation, I would like to express our deep appreciation for the generous welcome and the hospitality extended to us by the Government and the people of Mozambique since our arrival in Maputo.

Update on the Fiji reform agenda

Mr. Chairman,
Allow me at the outset to briefly update this distinguished forum on the progress being made in the implementation of the Roadmap to Democracy, through a Strategic Framework for Change for a Better Fiji. My Government has pressed ahead with the implementation of this wide-ranging reform programme which addresses the country's fundamental and deep-rooted problems.  In March this year, Fiji took over the chairmanship of the Melanesian Spearhead Group (MSG), and the 18th MSG Leaders Summit was held in Suva. The Group comprises of the Governments of Fiji, Papua New Guinea, Solomon Islands and Vanuatu.

The Summit was updated on the situation in Fiji and it fully recognized that the People's Charter for Change, the Roadmap for Democracy and Sustainable Socio-Economic Development and the accompanying reform agenda are credible home-grown development agenda for Fiji. The MSG Leaders underscored the need to remain engaged with my Government in our effort to implement the Roadmap to return Fiji to genuinely democratic elections by September 2014.

Under the current phase of the Roadmap, i.e. from 2009 to 2012, the Government will actively focus on economic and social developments, which include rebuilding our dilapidated infrastructure and increasing connectivity between urban and rural areas through building new roads and providing improved communication links.  This will ensure that essential services reach isolated villages and communities which were long ignored. At the same time, Government is reforming its public sector to modernize it so as to respond effectively to global challenges.

From early next year to 2013, the focus will be on political development issues, including electoral reform and formulation of a new constitution.  From 2013- Sept 2014 the preparations for elections will be undertaken by educating the public on the new electoral system and the new constitution.

We sincerely hope that our longstanding trading and development partners will appreciate my Government's efforts to bring about genuine change to ensure sustainable peace, stability and democracy in our country.

Brief update on the Fiji Sugar Industry

Mr. Chairman,
As regards the sugar industry, in the absence of the EU funds under the Accompanying Measures Support Programme, which, I must stress, Fiji is entitled to as a former Sugar Protocol signatory State, Government has set aside F$130 million under the 2010 National Budget to assist in the fundamental restructure and revival of the industry.  We have embarked on a major restructure and reform of our sugar industry which is currently being implemented. The main aim of the restructure and reform is to have an efficient, viable and competitive sugar industry in view of eroding sugar prices and to become competitive under the new market conditions.

We hope to provide an update later to the Conference on the actions being undertaken to improve productivity and efficiency of the industry which remains crucial for the livelihood of a significant number of our people and Fiji's socio-economic development.

Mr. Chairman
I would like to thank the Chairman of the ACP Sugar Subcommittee, Ambassador Gomes, for his detailed account of the activities undertaken by the Group since the Guyana Conference which I had the opportunity to attend in May 2009.  The report and achievements to date will form the basis for our deliberations at this meeting.

Background

Mr. Chairman, the theme for this Conference "Prospects of ACP Sugar in light of changing global market trends" is particularly pertinent given the volatile and changing nature of the world sugar market which we have recently witnessed.  The relevant developments in world sugar and factors leading to the current situation will be dealt with in detail by experts during this Conference.

It is pleasing to note that we have successfully addressed the future institutional arrangements in relation to the sugar arrangements under EPAs and EBA initiative which replaced the longstanding Sugar Protocol since October 2009.  This certainly provides a sound basis for a workable and effective arrangement to oversee our sugar interests in the future.

Mr. Chairman, since we met in 2009, the world sugar sector has gone through unprecedented developments especially in the world market and the shifts in major sugar producing countries.  For a small sugar producing country, like Fiji, with small population and distant export markets, we have limited choice other than to ensure that we continue to maintain a viable and sustainable sugar industry. This is relevant for many of our countries present here.

In Fiji, almost a third of the active working population is either directly or indirectly associated with the sugar industry.  The closure or scaling down of the sugar industry, therefore, will have devastating social and economic consequences. The impact on our rural society would be equally catastrophic.

Mr. Chairman, I would like to especially focus on the Accompanying Measures Support Programme (AMSP) which was initiated by the EU and the objective was to address the impact of the reform of the EU Sugar Regime on the ACP sugar suppliers like Fiji. The third and final price cut came into effect from 1st October 2009 resulting in a total reduction of 36% compared to the pre-Sugar Regime reform prices which we received in 2005.

Consequently, Fiji, like all other ACP suppliers, is receiving much reduced earnings from its sugar exports to the EU barely sufficient for meeting the on-going industry operating costs and making it extremely difficult to divert any resources for the much needed restructuring and rehabilitation work.  We benefitted only from the 2006 allocation under the AMSP. However, the industry has been deprived of the much needed funds under the Programme's first phase, from 2007 to 2010, which we always understood as our legitimate expectation being a former Sugar Protocol signatory State.  I take this opportunity to sincerely urge the European Union to immediately release the sugar funds to assist the affected farmers and industry stakeholders in their adjustment and adaptation process.  Then only we can seriously and sustainably face the new conditions as agreed in the context of the 2005 EU Sugar Regime reform.  This is not only vital for the Fiji sugar industry but will ensure that we continue to reliably supply our traditional buyers in the EU on sustainable basis.  The importance of this mutuality of interest cannot be overemphasised.

New Sugar Arrangements

As from October 2009, the ACP sugar supplying states have been exporting under new sugar arrangements provided for in the EPAs and EBA initiative.

I understand that the ACP-EC Joint Technical Committee on Sugar has met regularly, in the context of ongoing information exchange, on the implementation of the new sugar arrangements.  Recent meetings have examined the state of deliveries for 2010/2011 and 2011/2012 marketing years.

Mr. Chairman, in Fiji sugar production has faced major difficulties due to a combination of factors, including poor milling performance, lower yields, land related issues, aggravated by poor weather conditions. As you will hear later, we are doing our utmost to addressing issues within our means.  This should result in the improvement of production starting, albeit at a modest level, from this crushing season.

ACP Sugar Research and Innovation Programme

I am looking forward to the discussions on ACP sugar research and innovation programme and diversification within the cane industry.  As we are most at risk of tropical cyclones, and droughts, the discussions on the impact of climate change on sugar cane production are also of direct interest for us. In this regard, I wish to express my appreciation to the Commission and the Secretariat for the awarding of two projects to Sugar Research Institute of Fiji under the ACP Sugar Research Programme which, inter alia, looks into producing high biomass cane varieties which are resistant to drought, diseases and grows well on poor soils.

Moreover, the Conference will be addressing some of the major issues and challenges we are currently facing as we collectively aim to ensure that our sugar industries withstand the difficult times and remain viable on a sustainable basis.

Concluding remarks

Mr. Chairman, the sugar industry has long been the backbone of Fiji's economy contributing 6-8% to the country's total GDP and about 55-65% to its Agricultural GDP. The sugar proceeds go a long way in generating employment income and output throughout the economy, from the cane cutting gangs made up of villagers to truck drivers, mill workers and several small service based enterprises related to this industry.

My Government is fully committed to ensuring the sugar industry regains its former status as a key foreign exchange earner and remains a major employer on a competitive and sustainable basis.

We look forward to hearing from experts and industry representatives on the various key issues as outlined in the comprehensive Conference work programme and assure our support and active engagement as we develop the future course of action.

Thank you.