Delroy ChuckFOR OVER 300 years, Jamaica has benefited and relied on the sugar industry to provide employment, needed foreign exchange and wealth creation. When sugar was king, most of the agricultural lands were fully utilised in the growing of sugar cane and sugar was the nation's breadbasket. Nowadays, the debate is whether sugar can survive and, if yes, in what form.
With the imminent removal of the preferential price provided by the European Community, the industry will collapse unless the stakeholders wake up and accept that it cannot be business as usual. We can curse globalisation and the World Trade Organisation but the new reality is that we have to produce and compete with the rest of the world. If sugar is produced at less than 15 US cents a pound on the world market then it is senseless to argue we cannot produce at that price, and expect to survive. When we can no longer sell at a favoured price to the European market, to whom will we sell our sugar at a price above market rate? And, even if the government agrees to subsidise the farmers and producers more, would it not be breaching WTO agreements?
VIABLE OPERATION NO MORE
We might as well wake up and smell the coffee, the production of raw sugar is no longer a viable operation here, and for many reasons. Sitting on the Economy and Production Committee of Parliament has been a great learning experience, as I hear the plight, struggles and challenges of our farmers, manufacturers and producers, who universally appeal to government for help, protection and subsidy. Sugar, in its present form, seems a lost cause. Over the past ten years and more, tens of billions of dollars have been pumped into the sugar industry and, still, it needs many more billions to become viable. To be fair, the private farms are doing as well as can be expected, as with sound management and good agricultural practice, they have become quite efficient and, as I understand it, would be competitive if they had more land for sugar cane. The farms and estates managed by the public sector are economic disasters and no amount of subsidy can turn them around.
When the private sector produces sugar at under 20 US cents a pound but it costs the public sector in excess of 23 US cents, one wonders why have we not put everything under private sector management and the simple answer is that it would not be politically correct. A major problem facing the sugar cane farms is, in simple language, that the land is tired of bearing cane. Unless the land is rested or rotated with other crops, the plants yield less and less sugar when reaped. Yet, on most farms there is very little rotation or replanting, with the obvious consequence that there is diminishing return from the farms.
In large countries such as Australia and Brazil, there is so much land that farms can be rested for years or rotated with other crops regularly, and the yield of sucrose per acre is probably twice or thrice ours. Moreover, these countries are mechanised and have other comparative advantages such as a ready supply of water, better roads and flat lands. How can we ever hope to compete? How many Jamaicans know that the sugar we use here is imported, certainly every ounce of refined sugar. If we had to depend on local sugar for the production of beers, soft drinks, box drinks, syrup, etc. the prices of these products would double. In truth, raw sugar is just not being produced competitively for the local or world market and it is unlikely that it will ever be. If we are to save the sugar cane industry, we have to move away from the primary production of raw sugar and move into other value-added products.
BLESSING IN DISGUISE
For example, industry sources indicate that we, at present, provide only 80 tons of the 130 tons of molasses needed for rum production, while the rest is imported. Rum production could be the saviour of the industry. Then, if the government agrees that ethanol should be added to the fuel used in our motor vehicles, sugar cane could once again become viable, especially with the escalating price of oil on the world market. The decision by the European Union to cut the subsidy may well be a blessing in disguise, even though it is now seen as wicked and unacceptable.
Now is the time for the stakeholders to appreciate that the production of raw sugar, like any other primary product, is not the way forward. It is through value-added or secondary products that the sugar industry can be saved. Unless we innovate, globalisation and our WTO commitments will destroy instead of pulling us forward into the 21st century.
Delroy Chuck is an attorney-at-law and Opposition Member of Parliament. He can be contacted by email at Delchuck@Hotmail.com.
