Facing the reality of sugar
GUEST EDITORIAL
Guyana Chronicle
July 12, 2004
The Caribbean Community has made the obligatory protest about the planned 37 per cent reduction over the next three years in the price of sugar by Community producers in the European Union market.
But we hardly believe that the Caricom leaders expect to have much success in the call on the EU to withdraw the proposal because of the likely impact it will have on the region's agricultural sector.
Indeed, Jamaica's sugar industry, despite the improvements in recent years, still posts substantial losses annually, the preferential markets in Europe and the United States, notwithstanding.
The region is, of course, correct in their argument that the sugar agreement between the Caribbean and Britain, which was embraced by the EU, granted this region a guaranteed market in Europe in perpetuity.
But the fact is that the de jure preferences have been under severe attack in recent years - and not just only in the case of sugar. The banana industry, even more so, has been losing ground in Europe.
These stresses have become two points. There are the internal dynamics of the European Union and its need to reform its Common Agricultural Policy (CAP) and the external strains from countries which argue that the preferences enjoyed by countries like Jamaica are inherently unfair and in breach of the tenets of the World Trade Organisation (WTO).
Indeed, not so long ago, the powerful United States was in league with Latin American banana producers at the WTO, fighting, with substantial success, to dilute African, Caribbean and Pacific preferences in bananas. Another review of the redesigned banana regime is around the corner and the region will be hard-pressed to stave off further dilution.
The prospects are similar for sugar. Which is something we have known for a long time.
The prices that Caribbean sugar producers are paid are directly linked to those paid to the EU domestic producers. So any reform in Europe will directly impact Caribbean producers.
The problem from a Caribbean, and moreso Jamaican stand-point, has been our failure to adequately respond to those signals, which were apparent long before they were formalised in the 1990s.
Just as we believed Margaret Thatcher when she promised at Jamaica House that Britain would ensure that there would be no erosion of the banana protocol, we were lulled into a false sense of security by the supposed binding nature of the sugar agreement. So, too, we have been hamstrung by the peculiar sociology of sugar from taking the hard decision to reform an industry that still produces at more than twice the cost of the world market.
Hopefully, the developments in Europe will concentrate minds, so that the industry begins seriously to think about its future and what it needs to do to survive - or if it can. There are signs that this is taking place.
We, for instance, are excited by the prospect of growing sugar cane for ethanol and the displacement of up to 10 per cent of imported gasolene with fuel-grade ethanol. There are other products that may be manufactured from sugar cane, to which the Jamaican brand will add value.
We need to begin to think outside the box. The problem is that after all the dithering of the past, there is not much time now. (Reprinted from the Jamaica ‘Observer’)