By KC Soares, ContributorTHERE IS a common thought among supporters of the sugar industry that if a lot of money is injected in it, then its production and export will become viable.
While I agree that there is need for capital injection in this sub-sector, the core problem is not directly related to lack of capital; it is more a matter of the production of sugarcane.
If factories are updated with the latest available equipment but there is no sugarcane to supply the factories, then all efforts at resuscitating the industry would have come to nought.
The soil determines the yield of the sugarcane, firstly by anchoring the plant, and secondly by providing the nutrients from which the sugarcane juice is produced.
There are micro-organisms in the soil in which sugarcane is grown that cause a disease commonly termed 'root rot'. This disease drastically reduces the root population of each sugarcane plant, which impacts the amount of juice it manufactures, while reducing the strength of the plant. Reduced juice content ultimately affects the amount of sugar to be made.
At the same time, plants get lost to strong winds due to poor anchorage, resulting in less cane being available for the manufacture of sugar.
Thirty years ago, farmers got up to 50 tonnes of cane per acre. The average yield islandwide was above 35 tonnes per acre. Today, the average yield is about 18 tonnes per acre and when a farmer exceeds 25 tonnes per acre, he is considered as doing well.
In 1965, we produced more than 500,000 tonnes of sugar; yet in 2002 we could barely produce 150,000 tonnes.
While we recognise that the factories, mainly those publicly-owned, are inefficient in their production of sugar, the main reason for the low production is the drastically reduced supplies of cane to the factory for processing.
CORE PROBLEM
The core problem, therefore, lies in the fields. What the sugar industry should have done 30 years ago was, through research and development, find a way to increase the yield from 50 tonnes to say 65 tonnes per acre. Instead, we have gone backwards. If there is to be any increase in yield the soil problem will have to be solved, and to do this all soils will have to be fumigated.
The big question is, will the profits to be derived from the sale of sugar cover the cost of fumigating the soil? Figures suggest that fumigating the soil in present circumstances will not be profitable.
HYBRIDS AS ALTERNATIVES
The alternative is the development of resistant hybrids. This will take years, and by that time, the industry would have been dead and buried. It is in light of this that I have suggested that sugar be downgraded and other crops not affected by the disease organisms attacking the sugarcane be considered.
Clearly, the industry will not survive, so why waste time and money on an industry that has little or no future? In recognition of the social consequences involved, a gradual phasing out of the crop is recommended. The replacement industries suggested will employ, over time, many of the workers displaced.
Some of the supporters of the sugar industry liken its present state to the financial sector in the latter part of the 1990s. They believe a bail out is necessary and, with the injection of funds, the industry will once again be flourishing. Nothing could be further from reality.
If the analogy to the FINSAC situation should be followed through, then some organisations need to buy-out the bad loans (the soil) and afford the sugarcane a new start free of bad debts (a disease free environment). Is this possible?
In the year 2000, a plant pathologist investigated the problems experienced in sugarcane fields in Jamaica. He visited farms islandwide and confirmed the presence of a fungus in the soil that caused root rot. He concluded that in Jamaica there is a "sick soil syndrome", resulting from the old agronomic practice of continuous cropping fields with a single crop.
KC Soares is a former banker and is now a business consultant with Soledad Financial Services Limited. E-mail:
soledad@netcomm-jm.com.
