Sat | Jan 20, 2018

Reverse the sugar payment formula – Myrie

Published:Thursday | September 1, 2016 | 12:00 AMPaul Clarke

Western Bureau:

A change of the formula currently being used to determine how sugar cane farmers are paid is among the changes Nigel Myrie, a field adviser at the All-Island Jamaica Cane Farmers Association, would like to see addressed as part of the overall rescue plan for the local sugar sector.

Speaking at a recent Gleaner Editors' Forum in Westmoreland, Myrie said the payment formula, which was devised without the input of the farmers, was one of the factors that caused 120 small farmers to walk away from the sector last year.

"The formula in its current form is detrimental to the sugar industry. Many farmers have left and many will be eyeing the door likewise if there is no change to this formula," said Myrie, who noted that the small farmers were having a hard time to even break even.

"The switching around of the factors in the formula has resulted in monies that would have gone to some farmers being shifted to another set."


Expect more farmers to quit


While some stakeholders are cautiously optimistic that the sector can recover from this current slump, Myrie does not expect the figures for this year to be better than in recent years. In fact, he expects small farmers to continue walking away unless there is a reversal of the current payment formula, which was put in place between 2003 and 2004 without the knowledge of the farmers.

"This then causes the throughput (the amount of time required for a product to pass through a manufacturing process thereby being

converted from raw materials into finished goods) to the factory to be threatened. When you reject from the formula standard a certain quantity of cane, you are saying that you don't want to accept any cane below the standard because you will not pay anything for it," said Myrie.

"That is what the formula does. It takes money away from people with the lower (JRCS), a term denoting the average percentage of sugar in cane."

According to Myrie, when a farmer gets a Jamaica Recoverable Cane Sugar (JRCS) - a measure of the amount of sugar in cane - that is below the average, that farmer ends up not even recovering his cost for production.

"So they diminish his JRCS and minus it from the factory fraction. He has little left in terms of cash on which to reinvest for the next crop," said Myrie.

While noting that the formula is still being used in Australia, where it originated, Myrie said it was not practical in Jamaica based on a variety of reasons.

He said if it was reversed to fit the Jamaican context, cane farmers would once again begin to see the benefit of their crop.

Myrie further noted that core results at the end of each sugar crop proved his point, noting that where the average JRCS is low, based on its environmental factors, those farmers are at a disadvantage.