THE Planning Institute of Jamaica (PIOJ) has advised the government of a number of potential disadvantages should it establish a sugar refinery here.

According to the Report on Strategic Options and Recommendations for the Sustainable Future of the Jamaican Sugar Industry, tabled by Prime Minister P J Patterson in Parliament Tuesday, “while a sugar refinery would provide a number of benefits, including an increase in the demand for locally produced raw sugar, the proposals, as currently structured, presented potential disadvantages”.

The PIOJ report said:

. It was not yet clear that the local sugar industry would be able to achieve the projected reductions in raw sugar cost within the projected timeframe, while a dependence on imported raw sugar would remove the main rationale for the sugar refinery.

. The reimpositon of a duty regime would protect the proposed refinery from competition from extra-regional sources. According to the PIOJ, it was not clear that the refinery would be able to compete against potential supplies of refined sugar from Guyana which would be able to enter Jamaica duty-free;

. The potential effect of a re-imposition of a duty regime on refined sugar on the cost structure and competitiveness of local manufacturers was not clear, as it depended on the cost of refined sugar as a share of their total costs and firm level decisions on prices, output and employment.

The leadership of the All-Island Jamaica Cane Farmers Association on Wednesday criticised Prime Minister P J Patterson for not including proposals for a local sugar refinery in his government’s sugar policy which he announced on Tuesday.

The association’s chairman, Allan Rickards, claimed that the government had allowed the issue to become a “hot potato” and the farmers were the last persons to be considered when a decision was being made on the matter.

In 2002, following the closure of the Hampden Sugar factory in Trelawny, Minister of Agriculture Roger Clarke announced plans for a US$120 million state-of-the-art sugar factory which would also refine sugar and suggested this would be the way forward for the industry.

That same year the association of cane farmers and two American companies – Arkel Sugar Inc and Inter-American Transport and Equipment – submitted a proposal for the state-of-the-art facility to the PIOJ. The agriculture ministry gave tacit approval of the concept and the proposal was also presented to the finance ministry.

But since then there has been very little said about the project, which the cane farmers had projected would be up and running by 2003 if they were able to put up the financing.

The factory, according to its proponents, would be able to produce between 60,000 and 700,000 tonnes of refined sugar per year in the initial stages, as well as yeast, vinegar and methane gas and facilitate the co-generation of electricity for sale to the national grid.