Hugh Martin THERE HAS been considerable discussion over the past couple of weeks about the sugar industry because of the disappointing 2003 sugar crop. Only that about the Emancipation Park monument has overshadowed it.
Interestingly, both subjects have their links to that part of our history that many among us would like to forget and perhaps that accounts for the numerous calls for their removal. It is unlikely though that those calls will have any success but it must be admitted that too often art becomes expendable. The sugar people can take heart in the fact that economics never is.
The sugar industry, even at its lowest as it is now, is of immense importance to the country's economy. It is not so much that it is still the largest agricultural earner of foreign exchange and employer of labour. Whether we like it or not it is the biggest stabilising force of rural townships and communities, with linkages to so many other industries.
Closing down the sugar industry would spell economic disaster to large parts of Jamaica. This in turn would create enormous pressures on the cities resulting from the inevitable rural-to-urban drift. The Government knows this too well hence its determined efforts to rescue it whenever it falls into difficulty. The oft-repeated suggestions of replacing sugar cane with other crops such as tomatoes and spices are so ill conceived and impractical that they merit no further comment.
CONFIDENT
Those involved in the industry and who are confident that the bad times will soon come to an end are understandably concerned about what they consider unfair criticism from persons who have no understanding of the industry. The difficulties being experienced now, they contend, are no different from those experienced a few years ago by the financial sector, the manufacturing sector and even the tourism sector but no one advocated closing them down. With the injection of the required inputs the financial sector is once again vibrant.
Manufacturing is still limping along but tourism is beginning to show recovery. The sugar industry, they are convinced, will likewise recover when it is provided with the timely and adequate injection of badly needed financing. The Government-owned Sugar Company of Jamaica (SCJ), comprising some 80 per cent of the industry, feels the brunt of the criticism as the five factories under its control have been producing well below capacity in recent years. The sixth, Hampden, was closed in December last year because it was operating at too great a loss.
It must be remembered though that it, along with Long Pond and St. Thomas were recently taken over after they ran into financial difficulties. Closure of this factory was part of the overall restructuring strategy designed to bring the company back to profitability. Much of the objection to the industry has to do with the constant intervention by government to save it using taxpayers' money.
A reported $4 billion injection a couple of years ago caused quite a stir but Ambassador Derrick Heaven, former CEO of the SCJ, has insisted that the greater portion of that money, if not all, was used to pay off some of the debts incurred by the former owners of the company.
A favourite comment of Mr. Heaven is that when the government paid one dollar to acquire the company it was swindled. Similarly, according to Mrs. Thelma McCatty, vice president for Agriculture, a big portion of the 90 million Euros recently borrowed by the Development Bank of Jamaica (DBJ) "will be used to support expenditure at another time."
INVESTMENT
The substantive investment in the operations of the company will be only 25 million of that amount. Importantly, about 50 per cent of that will be employed in the agricultural division to boost cane production. In the past the emphasis was placed on retooling and maintaining the factories but the field operations were sadly neglected.
The consequence of that was a constant shortage of cane and the plants were therefore performing well below capacity. The recognition that the falling sugar production over the past several years has been a direct result of poor cane yields and poor juice quality has finally hit home. Worthy Park has long recognised this, hence its success over the years and only the very bad weather conditions last year caused it to miss its target.
Appleton a few years ago decided to make the investments in both field and factory and is now set to reap the rich rewards it is confident exist.
The SCJ with this massive debt now off its back and some working capital to improve the infrastructure and management of its field operations and to bring hundreds of hectares of additional lands back into production is confident that it is on the road to profitability.
Already it has reduced the unit cost of producing sugar from over 30 US cents per pound to close to 17 cents on a couple of its estates just short of its target of 13 US cents per pound. In addition, it plans to work more closely with the farmers and to provide assistance that will improve their yields as well.
The sugar crop this year was poor. It probably won't be much better next year. But the stage is set and the prospects are good for the future.
Hugh Martin is a communications specialist and farm broadcaster. E-mail: humar@cwjamaica.com
