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SUVA, Fiji (July 1, 1998 - Radio Australia)---The Fiji Government has agreed to provide cash grants to drought-affected sugar cane farmers.

Radio Australia Pacific correspondent Richard Dinnen reports the Government hopes its decision will defuse a potentially explosive situation.

"A long drought has wiped out much of this year's sugar cane crop.

"Farmers had requested financial assistance to rehabilitate crops. The Government offered loans but the farmers wanted cash grants and threatened a harvest boycott. The Fiji Cabinet has agreed to provide grants to support the crop rehabilitation scheme, and will amend legislation to allow a sugar industry fund to also provide cash grants.

"It's a significant concession by the Government, which will have to make substantial borrowings to raise the money.

"The Government hopes the announcement will ease the growing tension in cane growing districts, and convince the cane farmers to harvest their crops. The Government cannot afford to lose any of the revenue it earns from sugar.

"National Farmers Union leader Mahendra Chaudhry says farmers are closely examining the Government decision, and the harvest boycott will continue until all details are finalized."

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