University of Khartoum

Value Chain Analysis of Sugarcane with Particular Reference to Guneid Sugar Factory, Sudan

Value Chain Analysis of Sugarcane with Particular Reference to Guneid Sugar Factory, Sudan

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Title: Value Chain Analysis of Sugarcane with Particular Reference to Guneid Sugar Factory, Sudan
Author: Abusin, Abdelmoneim Mohamed Malik
Abstract: This research aimed to study the value chain of sugarcane produced by four factories of the Sudanese Sugar Company (SSC) (Guneid, New Halfa, Sinar and Assalaya) with emphasis on Guneid Factory, in addition to Kenana Sugar Factory. The specific objectives were to measure revenue gained by different stakeholders local resources used, the efficiency of using these resources, and to describe the government policy towards sugar industry in the country. The study depended on primary data which were collected through structured questionnaires covering farmers, processors, traders and consumers, and secondary data which were secured from sources. The data were analyzed with descriptive statistical methods using SPSS programme and the FAO Easy Poll Software version 3.2 to apply the policy analysis matrix (PAM) to assess the comparative advantage and the competitiveness of sugar produced by SSC. The descriptive analysis results showed that there are no significant structural differences between the value chains of the different sugar states. However, the only difference is that some of the Guneid farmers, who produce good quality cane, are rewarded by having their produce used as seed at a premium price. Other schemes get their seed cane from their special seed farms . Moreover, Guneid sugar scheme, with an average yield of 50tonsof sugarcane per feddan, the highest productivity among the four government sugar schemes, proved to be the most efficient in the use of resources. The PAM results showed that the Domestic Resource Cost (DRC) i.e. the cost of a domestic resource unit needed to bring one unit of foreign currency has a value of 0.3 for plant cane, and 0.8 for white sugar produced. Since both figures are less than one, this result indicates that Sudan has a comparative advantage in producing sugar. The value nominal protection coefficient (NPC), which refers to the degree of protection received by a firm outputs and inputs, was 1 for plant cane, and 0.9 for white sugar in case of outputs (NPCO), while for inputs it was 1.6 for plant cane and 0.9 for white sugar. This result indicates that sugar produced was subjected to government taxes at the processing level. The Effective Protection Coefficient (EPC), on the other hand, which refers to the degree of incentives and disincentives on outputs combined with input side, i.e. ratio between the values added expressed in market prices and those expressed in social prices, was 0.4 for plant cane, and 1 for white sugar. This result indicates that farmers enjoy higher value added than the society in case of and white sugar i.e. there are net transfers from society to farmers. The value for Domestic Factor Ratio (DOFAR), which is the ratio between the factor costs expressed at market prices and factor costs expressed at social 1.1 for plant cane, and 1 for white sugar. This indicates that labour, which is the main factor cost, is heavily taxed, which shifts the burden of factor costs to the producer. The policy implications of this study, based on the different measures indicated, are multifaceted. First, farmer is identified as an integral component in the sustainability of agricultural development as the experience of the Guneid scheme has shown. This successful experience should be introduced in other projects. Second, as the country has a comparative advantage in the production of this commodity, the government needs to reconsider the tax structure of the industry related to inputs and outputs to strengthen its in international markets. There is also a need to revise the present distribution system of sugar with the objective of enhancing returns to main stakeholders. Also in order to add value to this industry the study recommends the expansion in the diversification of by-products industry e.g. energy production, paper manufacture, animal forage and feed production and ethanol production.
URI: http://khartoumspace.uofk.edu/123456789/25233


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