Poor countries in southern Africa are experiencing something of a boom in sugar cane production. Billions of dollars of investment have poured into the region – including from UK and French sugar companies – in order to source increasing amounts of sugar for the European market. Yet there is mounting scepticism as to whether this will be such a ‘sweet deal’ for the rural poor.  Negative impacts on food prices, land rights, water security and working conditions have all been linked to expanding sugar cane production in other regions of the world, suggesting to some that the case will be no different in southern Africa.

This paper explores the impacts of sugar cane production in three countries in southern Africa: Malawi, Mozambique and Zambia. It finds that there are major problems linked to:

• avoidance of tax payments and limited linkages with the local economy
• misleading negotiations with peasants over land rights and job prospects
• low wages, poor housing and informal contracting for field workers
• unequal power relations within small-scale farming schemes

It concludes that the big sugar producers of southern Africa are undoubtedly important employers, service providers and foreign exchange earners. Nevertheless, they could – and should – do more to assist the rural poor.
This should take place through holding investors to account over their responsibilities to the local and national economy, empowering and listening to civil society actors, raising the wages and poor living conditions especially for seasonal workers, and encouraging small-scale outgrower schemes for established communities.

Nevertheless,  large-scale agro-industry is not the ‘be all and end all’ of rural
development. Because of its capital-intensive nature and the limited ability/inclination for companies to incorporate small-scale farmers into the supply chain, it is not always easy to create economic opportunities for the poor within the sugar industry. With this in mind, emphasis must also be switched toward fostering  small-scale rural enterprises through manageable government interventions.