Parliament is set to debate a significant motion today that calls for an increase in the government guarantee for the Fiji Sugar Corporation (FSC). This initiative, put forth by Deputy Prime Minister and Minister for Finance, Strategic Planning, National Development and Statistics, aims to raise the guarantee from $200 million to $300 million. The proposed increase will cover FSC’s domestic borrowings for the period extending from August 1, 2022, to May 31, 2028.
The motion cites section 145(1) of the Constitution and Standing Order 131, facilitating this government support. In addition to augmenting the guarantee, the FSC will also be exempt from the standard government guarantee fee, which is expected to ease financial pressures on the corporation.
The government’s commitment to supporting the FSC reflects its recognition of the sugar industry’s vital role as a cornerstone of the Fijian economy. With the industry facing ongoing challenges, this support aims to ensure that FSC can fulfill its financial obligations and recover operationally.
Previous discussions in Parliament have highlighted the financial strain that FSC has been under, with Finance Minister Professor Biman Prasad noting that the government is already liable for $293 million in guaranteed debts—both domestic and international. This scenario underscores the importance of collaboration with the FSC to manage fiscal risks effectively.
Concerns have been voiced by opposition members regarding the long-term viability of such guarantees given the ongoing issues within the industry, including large tracts of land previously used for sugarcane farming now lying fallow. They have emphasized the necessity for greater accountability from FSC’s management and the implementation of strategic operational plans to revitalize the sugar sector.
Despite these challenges, the motion to increase the government guarantee is a proactive step that may help streamline FSC’s funding and potentially lead the industry towards a more sustainable future. This move represents an acknowledgment of the critical importance of the sugar industry to Fiji’s economic landscape, and it lays the groundwork for further improvements in FSC’s operational efficiency and financial health.