THE WORST fears of Jamaican cane farmers and others in the sugar industry, along with those of their African, Caribbean and Pacific (ACP) colleagues, were realised yesterday with the European Commission's proposal to slash raw sugar prices by between 39 and 42 per cent over a three-year period.
They can either continue to bewail the inequities in the world's trading system and remonstrate against the sense of betrayal in the timing of the policy change, or try to develop alternative ways of making the industry work in their and our best interest. At the same time, the insistence by ACP countries that the Commission's plans will have a crippling effect on economies that traditionally supply sugar to the European Union under the provisions and guarantees of the ACP-EU Sugar Protocol should not be taken lightly. Thousands of Jamaicans in the local sugar industry stand to lose their jobs. So the diplomatic lobbying efforts must be carried forward at all levels.
Preferential access to the EU market under the terms of the Sugar Protocol is of vital importance to the economies of ACP states - in some cases, it is the single highest contributor to gross domestic product. In addition to price cuts, the EU's plans will see the imposition of new marketing restrictions on ACP suppliers, which some see as being against the spirit and letter of the Sugar Protocol.
Yet the disastrous socio-economic consequences being predicted by cane farmers and other industry interests need not materialise.
Our sugar industry interests would do well to reflect on the idea that the Chinese character for danger is also the same one for opportunity. In fact, a few countries in the region have already moved to modernise their sugar industries through diversification and value-added activities to reduce production costs; enhance competitiveness; and ensure long-term financial and economic viability. But in the wake of the EU's new policy, more countries will have to step up the pace to be more competitive in a changing global environment.
And while ACP countries have pointed to several moral and legal reasons why there should be no regime change, to justify a continuation of the pricing policy, there has to be an appreciation of the fact that EU member governments are themselves under pressure from powerful lobby groups in their own countries to adopt policies beneficial to their own people.
Some critics of the EU policy say the proposals will continue to benefit some of the richest farmers in the world, at the expense of the poorest.
But while that may be true, ACP countries, including Jamaica, are barking up the wrong tree if they expect continuation of preferential treatment in a time of increased competition among states. Our response must be to diversify our industry to one that is less labour intensive and less dependent on the generosity of European governments.
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