A requiem for the sugar industry
Wednesday, September 12, 2018
Ever since the British declared the sugar industry unviable and ended the slave trade in the 18th century the industry has never regained viable status in Jamaica and the rest of the Caribbean. There have been times when it appeared viable, but, if the truth be told, the quantifiable losses that the industry has suffered over the years have not been matched by any sustained and solid returns to justify its continuance.
This is especially the case today, yet it is not a truth that you will hear admitted by Jamaican politicians and vested interests in the industry. Successive governments have tried to prop up this industry, largely because of its importance as a crutch to political power. The major unions which are scions of the political parties have gone along with the ride citing the need to preserve jobs and the livelihood of poor families. But poor families have not seen any lasting benefits from this industry to be satisfied about. Those who have depended on it for a living have had to do so under horrible living conditions and poor compensation, despite union protestations to the contrary. As a conveyor of their economic and political interests, the unions realise that the sugar industry is still one of the strongest bastions for their survival in Jamaica. Therefore, in alliance with their political parties, they will seek to preserve it — even though it is not economically viable to do so.
The truth is that sugar is an emotive and highly political issue in Jamaica. Both political parties know that to allow the industry to die is to court political suicide. Therefore, neither is brave enough to proclaim its death knell and to look at more viable ways in which they can preserve a better livelihood for those directly affected by it. Instead, they have tinkered at the edges with cosmetic reforms and pretensions at divestment, but the problems remain and are, in fact, getting worse.
The last attempt at divestment of the industry occurred under the Aubyn Hill-led divestment committee. The Chinese became the most prominent suitors to the then Government and purchased the Frome, Monymusk and Bernard Lodge estates. The Seprod Group, in 2009, went into sugar with its Golden Grove Sugar Company. It was not long before the Chinese discovered the unviability of producing sugar economically and exited the industry. True to form, the Government of the day went into patchwork mode pumping in millions of dollars to save the day. In effect, the privatisation of the industry ended in failure. It was, in fact, poorly executed. There is no real success to point to, and one hears only lamentations from those who dared to jump in and are now bravely trying to stay afloat.
One such 'lamentator' is the Seprod Group, which is now deeply regretting its foray into sugar. Its chairman, P B Scott, who is also chairman of the Mussons Group, in a piece in The Gleaner lamented the losses that his company has been racking up. To date, this has amounted to $4 billion. He argued that if they should shut down their sugar business Seprod's profits could soar by as much as 20 per cent.
It seems clear, except to the Government and its unions, that the days of sugar as a viable enterprise bringing the country high economic returns are at an end. Instead of trying to prop it up or believing that by some kind of magic it can be revived is poppycock. Even in the best days of the preferential arrangement that sugar enjoyed under the African, Caribbean and Pacific Group of States (ACP)/EU preferential arrangements, Jamaica never fulfilled its quota allocations. Every year we fell behind target. The inputs in the industry were too costly and we could never produce sugar to take care of local demands much less to create a viable export industry out of it.
Those days are gone,and yet we hold on to the illusion that the glory days can return. When were those days? Now Minister of Agriculture Audley Shaw has been forced to return to a reassessment of the industry because of what he sees as corruption in the importation of granulated sugar. He believes that this new look must accommodate small farmers. But is segmenting sugar lands into small parcels for allocation to small farmers the most effective way to go? Sugar cane production is a highly capital intensive endeavour. Even planting, growing and harvesting sugar cane is costly. How would a small farmer survive under this kind of financial pressure?
The Government would be well advised that in the rationalisation of the use of sugar lands that it considers diversifying and migrating other agricultural crops to these lands. Sugar cane lands are among the most productive agricultural lands in the country. With the still massive food import bill that we have these lands could be used to diversify our agricultural products with a view for import substitution. It is here that small farmers could get a real chance to become involved.
But the hardest thing is to detach oneself from what P B Scott describes as an “emotional attachment” to sugar. It is this kind of emotional attachment why we held on so long to the loss-making Air Jamaica. Then patriotism trumped economic rationality. Are we playing the same game with sugar?
Yes, considering the sugar industry dead and shifting to new paradigms of production will constitute a quantum shift for politicians tethered to the emotionality and political viability of sugar. But for the country at large this is a moment to which we have arrived. Enthusiasm must be met with rationality. It is time that we realise that the sugar industry as we have known it is dead. It is also time we give it a decent burial and begin to work at the new 'miracles' that can be resurrected from it. If asked, I will supply the opening hymn.
Dr Raulston Nembhard is a priest and social commentator. Send comments to the Observer or email@example.com.
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