Restarting sugar production in Afghanistan

Rome, December 18, 2004 (FAO) - FAO is to help Afghanistan to resume sugar production, the UN agency announced today. Through a project financed by Germany, FAO will rehabilitate the country's only sugar factory in Baghlan, which ceased operations in the late 1970s. Afghanistan is currently relying entirely on imported sugar.

Germany has recently signed six new projects with FAO for a total value of €3.3 million. As well as the rehabilitation of the Afghan sugar factory, the projects will cover animal health and livestock production, programme development and project coordination in Afghanistan, the Special Programme for Food Security in Sierra Leone, support to the FAO/WHO work on food safety and assistance to alternative locust control methods in the Sahelian countries.

Until the late 1970s, Afghanistan had a small but thriving sugar industry, to which small farmers were important suppliers of sugar beet. The sugar factory was established as a private enterprise in the 1930s and operated successfully until 1979.

Today, the country imports some 300 000 tonnes of sugar every year and the production of beets has virtually stopped.

Plans to expand sugar production and build a new plant adjacent to the old factory came to a standstill in 1979 when Afghanistan was invaded by the Soviet Union. Most of the new equipment was lost or damaged during the war. However, the original plant site and machinery have been basically maintained over the years by the factory's staff.

The sugar factory is located 250 kilometres northwest of Kabul, an area which is considered to be the most suitable for sugar beet production.

A public-private partnership has been established now between the Ministry of Foods and Light Industries, the German seed company KWS and a group of private Afghan investors.

"The revival of the sugar industry could offer an alternative to poppy production and could help to boost incomes of family farmers by introducing a profitable cash crop," said Serge Verniau, FAO Representative in Kabul.

FAO will help to identify farmers to cultivate exclusively sugar beet under contract. Some 2 000 growers will be selected and organized into farmers groups.

A factory based training service will be set up providing technical and managerial assistance for sugar beet production and farm management. Many small farmers currently do not have the skills to ensure a stable sugar beet production and achieve quality requirements.

In close cooperation with the factory management, FAO will assure small family farmers' access to farm inputs and agricultural machinery.

The project will pre-finance 50 percent of initial input purchases with full costs to be deducted from payments to farmers at harvest. The recovered financial resources may be used to establish a temporary fund to insure small farmers in cases of emergency against yield shortfalls or other problems affecting their ability to repay their debts.

Funds of the two-year project (over €1 million) will also be used to buy farm machinery, given that proper seed bed preparation and sowing are crucial in sugar beet cultivation.

The project will be managed by the Baghlan Sugar Factory Management and FAO. Coordination and cooperation with national programmes to eradicate poppy production will be a permanent concern of the project's management.

Faced with uncertain markets for traditional crops, lack of credit and reduced access to seeds and other farm inputs, many Afghan farmers are lured into poppy production. Resuming sugar production is an example for creating alternative income opportunities for farmers depending on poppy production, FAO said.

Since 2002, Germany has funded projects through FAO at a total value of €22.4 million of which €17.1 million have been earmarked for 14 projects on agriculture, food security and nutrition in Afghanistan.