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EDITORIAL - Not sweet, Mr Rickards

Published:Wednesday | November 26, 2014 | 11:00 AM

Allan Rickards, president of the All-Island Cane Farmers' Association, is within his rights to threaten politicians with the power of the vote of his members should there be opposition to the reinstatement of a government monopoly for the importation of sugar.

That, often, is the way of liberal democracy - sometimes muscle-flexing and horse-trading between different interest groups. In the end, though, policymakers are expected to arrive at decisions that are in the best interest of the country.

That is why Anthony Hylton, minister with responsibility for industry and commerce, must not wilt in the face of Mr Rickards' glare and abandon his suggested review of the new arrangements. For there are things that Government can do that are worse than formulating bad policies: implementing them.

Jamaica consumes around 80,000 tonnes of refined sugar, whose importation, up to 15 years ago, was under the effective control of the Government via the Sugar Industry Authority (SIA) and the government-supported industry co-operative, Jamaica Cane Products Sales (JCPS). As is often the case with monopolies, especially those under control of the State with effective oversight, this wasn't the most economically efficient way to conduct business.

So, since 1999, as Jamaica's economy liberalised, manufacturers and large consumers of sugar, who have to be registered with the SIA, have been allowed to import their own sugar, thus being in a position to source the commodity at the best price available. That is called free-market competition. It drives efficiency, cheaper inputs, lower costs, stimulates production, and helps to create jobs.

Recently, though, Derrick Kellier, the new agriculture minister, surprisingly announced that the SIA was being reinstated as the sole importer of refined sugar. There was no substantive consultation with manufacturers who use sugar. We suppose he had the support of the Cabinet and that he based the decision on claims that some of the refined sugar, imported with duty concession for manufacturing, was finding its way into the domestic market to compete with locally produced, unrefined sugar. Perchance that was the case, clearly the solution is not to wield a monopolistic big stick, especially in a circumstance where there is no sugar refining capacity in Jamaica.

IN CONFLICT WITH DOMESTIC LAW

Indeed, beyond the immediate potentially negative impact on the businesses of its members, the Jamaica Manufacturers' Association has questioned whether Mr Kellier's decision may not be in breach of Jamaica's obligations under its international trade agreements and, therefore, in conflict with domestic law.

Whatever the answer to that, the move appears to fly in the face of the broad principles that have guided the island's economic policies: the creation of a market driven by competition.

Indeed, we believe that it is this philosophy that, in part, underpinned an agreement between the All-Island Jamaica Cane Farmers' Association and the Pan Caribbean Sugar Company that allowed the latter to market sugar on behalf of those farmers who delivered sugar cane to its factories. This deal, on the face of it, bypassed the JCPS, whose monopoly for the export marketing of Jamaica's unrefined sugar was previously broken by the Chinese-owned Pan Caribbean.

This newspaper seeks no votes, so will not be swayed by electoral threats about the efficacy of this policy. We require compelling arguments.