Sugar industry is unaffordable social welfare

Sunday, August 20, 2017

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The sugar industry was the backbone of the economy of Jamaica and our largest export and source of foreign exchange from the mid-17th Century, when British colonial rule began, until the emergence of the bauxite and tourism industries in the 1960s.

The fortunes of the sugar industry have determined whether Jamaica prospered or was impoverished.

It also had an impact on the quality of life of most Jamaicans because it was the largest source of employment. However, the sugar industry has been one of gall and wormwood.

First, it was built on and responsible in large measure for the slave trade and the most inhumane institution of slavery used for manual labour in the fiercely hot tropical sun.

Read the diary of Thomas Thistlewood if you can stomach it without vomiting. Built on unpaid and cheap labour, the sugar industry was responsible for the introduction of indentured Indians after slavery was abolished, following compensation to English slave owners.

It was the justification for the British colonial policy of preventing free Black people from getting access to land, of which there was plenty.

Second, the sugar industry was mainly foreign-owned for centuries and the huge profits were transferred to England and financed the Industrial Revolution.

Meanwhile, the factories became industrial relics because they were notoriously undercapitalised and were more suited as working industrial museums.

However, the local privately owned Worthy Park is an exception as it has proven to be a successful operation.

Third, the industry has been generally inefficient and internationally uncompetitive and was only kept alive through preferential trade arrangements provided by Britain and later the European Union.

These arrangements guaranteed an export market by quotas and prices above the world market price.

Even this could not keep the industry that has not fully mechanised, cannot attain economies of scale and does not have labour as cheap as Africa from declining in production since the mid-1960s.

Fourth, while trying cooperatives, state ownership, local private sector and foreign owners, successive governments have poured billions of dollars into a bottomless pit.

Governments have turned the support for the sugar industry into a social welfare system for sugar workers and cane farmers.

Neither can stop feeding off the State because unskilled workers cannot secure alternative employment and farmers can always lobby government to bail them out. It is time to face reality and call a spade a spade.

Is there a future for an industry that after 350 years still does not make white refined sugar?

The reality is that a Government as heavily indebted and flat broke as Jamaica's cannot afford the sugar industry to be a rural social security system.

Future funding for the sugar industry must be used either to close down the industry or to salvage that part that can be efficient and internationally competitive.

Displaced workers and farmers have to be assisted to get into other activities. This is a one-time exercise.

Once that is done, the resources freed up can be invested in infrastructure, education, health and tourism to better effect.




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