Sat | Aug 19, 2017

Heaven laments failure to diversify sugar

Published:Wednesday | August 31, 2016 | 8:00 AMChristopher Serju
A section of the Frome Sugar Factory.

The failure of sugar-producing countries in the Caribbean to diversify their operations will begin to hit home after the changes to the European Union (EU) agricultural policy comes into effect next year. The uncertainty is a cause for concern among stakeholders in the regional sugar industry.

"Next year is when the EU is going to ... modify its agricultural policy. What is likely to happen is a closely guarded secret. What we think is going to happen is that they are going to allow other people to be able to send their sugar duty-free to the EU market. So it is going to cause a shift in the equilibrium in demand and supply," Ambassador Derrick Heaven warned during a recent Gleaner Editors' Forum in Savanna-la-Mar, Westmoreland.

Westmoreland, which is home to Jamaica's largest sugar factory, Frome, and whose economic fortunes are largely dependent on the state of the industry, could be particularly hard hit. However, stakeholders in Jamaica, Barbados, Belize and Guyana (Cuba also produces sugar) have no one but themselves to blame for the lack of preparation for that day of reckoning, suggests Heaven.

 

SIGNS IGNORED

 

"The signs were there that there were going to be changes. They (the EU) had been warning us, the governments ... , but we never paid any attention to it until when they decided to renounce what we regarded as a binding contract that couldn't be changed," the sugar farmer admitted.

This complacency on the part of cane farmers and sugar factory operators was a result of the long-standing government-to-government contract under which countries like Jamaica supplied bulk sugar to England and then the European Union, at preferential rates. It was a situation that led to a kind of business inertia, resulting in a failure to seek additional markets.

Noting that this arrangement worked well for quite some time, Heaven pointed to some of the inherent pitfalls.

"All you had to do was produce the bulk sugar, send it; you get guaranteed price and so there was no need to even look elsewhere. Even for the fact that we were sitting on the most lucrative market, which is the domestic market, and when I say 'domestic', I don't just mean Jamaica, I mean CARICOM, but there was no need to even look at it."

christopher.serju@gleanerjm.com