Take the sugar industry off life support

Sunday, August 26, 2018

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Sugar was once the most valuable commodity in the world. It led to, and sustained the slave trade, and the profits financed the Industrial Revolution in England.

For centuries, the sugar industry depended on cheap labour, as harvesting required constant exposure to tropical heat. This is work no human being is prepared to do if they have any alternative, hence only by enslaving people could a work force at the lowest cost be guaranteed.

A labour force in Jamaica after Emancipation was only maintained by blocking access to cultivation of land of which the Crown had an abundance.

By the early 20th century sugar could not be produced profitably at world market prices and hence Britain, the colonial power, mindful of the disturbances of the 1930s, devised a system of preferential market arrangements for its Caribbean colonies which guaranteed a quota and a price above those on the world market. This boosted the profits of British companies in the Caribbean where sugar was the main industry. By the 1960s it was clear that the system was untenable in the long run and Tate & Lyle withdrew. Since then, production has declined.

Given that the sugar industry was the main source of earning foreign exchange until the advent of the bauxite industry, successive governments have been preventing the sugar industry from collapse by subsidising cane cutters, cane farmers and factory operators.

An enormous amount of money has been spent, but there was insufficient investment in modernising the industrial relics which pass for factories, mechanisation of reaping was continually delayed, agronomy was ignored to the detriment of yields, irrigation was not given full attention, and research scaled down. Time, money, and expertise were spent on supplication for perpetuating preferential trade arrangements and government subsidies.

After 400 years, Jamaica is still producing only brown (unrefined) sugar at prices above what it could be when imported and above what the world market will pay. The sugar industry in Jamaica has been on life support for a very long time and now, with the losses by local and foreign operators, several factories will be closed. Neither the private sector nor the Government can afford to continue subsidising the industry. The options are:

First, the sugar industry should be taken off life support and the land and resources used for some other agricultural production, given that it is the best farming land in Jamaica.

Second, salvage a part of the industry that can be made viable as a cane industry for some sugar, and molasses for rum production. This might be possible because the privately owned and run Worthy Park has made a profit every year, while the Government and local private and foreign operators, ie, the Chinese, have lost money every year.

Either of the options will be costly economically and difficult socially, but the decision cannot be postponed. Further postponement will only make implementation of the decision more costly and more difficult.

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