Wed | Jan 27, 2021

'Unsustainable'...Worthy Park Estate calls for reform of Sugar Industry Authority

Published:Thursday | July 30, 2020 | 11:52 AM
The Sugar Industry Authority is no longer affordable for the industry, says Worthy Park Estate - Contributed photo

Sugar company Worthy Park Estate Limited says the Sugar Industry Authority needs to be dramatically reformed or disbanded in light of hardships created in the industry.

According to Worthy Park, over the past two years, the entire industry lost substantial sums due largely to the inefficient and unaccountable bureaucracy established to regulate and manage the sugar industry.

The regulatory authority is funded by cess imposed on the industry, which Worthy Park contends is deleterious.

“To demonstrate the ridiculously high level of SIA cess levied on the industry, in 2019, Worthy Park paid more in cess to the SIA than it did to buy its most important farming inputs, fertiliser and chemicals. Due to our losses, Worthy Park also had to borrow money to pay this SIA cess in 2018 and 2019; such a situation is not sustainable,” a company spokesperson said in a statement.

“The expenses of this regulatory body have not been kept in proportion with the contraction of the industry and the remaining factories and farmers cannot be expected to fund the ballooning cost of the SIA budget especially if we are down to two factories next crop,” the spokesperson noted.

J. Wray & Nephew Limited has announced that it will cease operating the Appleton Estates Sugar Factory and that the positions of some 370 employees are to be made redundant.

READ: Wray & Nephew to end Appleton sugar operations

For more than a decade, J. Wray & Nephew has reported annual losses of US$12 million (J$1.8 billion) on its sugar production operations.

Worthy Park says repeated calls for the issues to be addressed have gone unanswered and that the time has come for a serious look at the operations of the authority and its impact on the sugar industry.

“SIA is no longer affordable.”

The company contends that as sugar production has fallen due to manufacturers and farmers exiting the industry, an increasing percentage of the sugar proceeds is being used to fund the SIA budget rather than being paid to the factories and farmers.

Despite recent losses, Worthy Park says it still believes in the sugar industry and highlighted that it recently invested over $300 million to expand its operations.

The company is of the view that there is a viable future for the local sugar industry because the remaining sugar factories can supply the total local demand for brown sugar at economically viable prices to all stakeholders.

It says this viability can be achieved without the need for the Government to provide ongoing subsides, operate factories or overreach through regulations.

“The most important role for the GOJ is to ensure that our local market is safeguarded against the illicit sale of sugar and to remove the outdated and obstructive bureaucracy entrenched in the industry. Establish the suitable environment and then let market forces determine who can make a livelihood out of sugar.”

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