Fiji's Sugar Woes: The Challenge of the Land Tenure System, Ethnicity and the Erosion of EU Sugar Preferences

Abstract

The non-renewal of land leases since 1997 and the impending withdrawal of the European Union's sugar preferences in 2007 have created major uncertainties in Fiji's sugar industry. In the context of this troubled environment, this paper examines the impact of various socio-economic factors on the viability of the industry by focusing on farm efficiency in sugar cane production. It was found that, in general, farmers were inefficient and produced 25% less than their potential output. Among the farm inputs, land (labour) was relatively the most (least) efficiently used input. Empirical evidence also suggests that the more productive Indian farmers rather than the natives be left to farm cane and that large scale farming should be seriously considered by amalgamating land leases. Lastly, it is possible for Fiji's sugar industry to be sustained with the use of appropriate best farming techniques to improve cane yield, and if there is successful expansion of sugar-related products.Random coefficient production frontier, technical efficiency, sugar cane production, Crop Production/Industries,