The sugar cane industry of Belize has endured many challenges in the past and has been a solid socio-economic engine for northern Belize and the country. Historically, and even today, we continue to depend heavily on the European Union market access for the survival and resiliency of our sugar industry. But with the on-going dispute between BSI and BSCFA on the revenue profit sharing of sales generated by the Bio Fuel better known as the bagasse, the industry is at risk.

While this issue has been making headlines for quite some time now, it is anyone’s guess if and when the parties involved will find common ground. What is of concern to others is the economic downfall that can potentially harm the industry and Belize on a whole. Some fear that if the 2013/2014 crop season is delayed, the effects would be disastrous.

David Acosta – Retired principal.

“En el nivel económico, el aspecto económico sería algo negativo pero yo estoy 100% apoyando a los caneros en el sentido que si van a conseguir algo, van hacer más participes en la economía que les da su producción, entonces es necesario que BSI les pague para el bagazo porque es un bi-product, tienen un de acuerdo desde el 2002 a donde una clausula lo menciona entonces allí los caneros tienen una base y yo lo que quisiera decirle a los caneos y al pueblo de Belice a Corozal y a Orange Walk es de que para todo bien que va venir es necesario un sacrificio y si los caneros están peleando para un beneficio para el pueblo del norte entonces tiene que haber sacrificio.”

With the Sugar Industry being one of the back bones of the Belizean economy and the main revenue earner for the north a dispute between Belize Sugar Industries Limited and the Belize Sugar Cane Farmers Association only spells but one word, trouble.

David Acosta – Retired principal.

“El distrito de Corozal y Orange Walk dependen de la azúcar porque mete bastante divisa, no solo para Corozal y Orange Walk sino para el país entero entonces se sentiría en las bolsas de los caneros y el pueblo de Corozal, negativamente ese sería el impacto a la economía directa a Corozal y Orange Walk. De darse un parro como lo están mencionando entonces naturalmente habría unos escases de azúcar, el precio de azúcar subiría, sería un poquito más carro pienso yo pero vuelvo a decir, el pueblo tiene que entender que para cualquier bien o bien estar que estamos buscando para los caneros tiene que haber este sacrificio.”

And in a larger scale, the absence of a sugar industry means a decrease in foreign exchange earnings which translate to a reduction in our ability to pay for import. For many of us, finding common ground and resolving the issue is of utmost importance as the livelihoods and future of thousands are at stake.

CTV3

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Video: Yo Creek (Belize) Hand Planting Sugar Cane, Part I, 1min.
Thanks to Gabriella Locke who took the video on June 11, 2013.

Video: Yo Creek (Belize) Hand Planting Sugar Cane, Part II, 1min.

Video: Yo Creek (Belize) Preparing Sugar Cane to Eat, 1min.

Video: Harvesting Sugarcane, Orange Walk, Belize, 1min.
Farmers harvesting sugarcane north of Orange Walk Town, Belize, on June 8, 2014

Video: Crab Loading Sugarcane on Truck, Orange Walk, Belize, 3min.
Students aboard a crab loading sugarcane on a truck north of Orange Walk Town, Belize, on June 8, 2014

Belize 2014 X from Simon Rawles on Vimeo.

Video: Fairtrade in Belize

In the cane fields and social projects in the villages. Interviews with Alfredo Ortega, Belize Sugar Cane Farmers Association, Mauricio Mejia, WWF Agriculture Programme Officer, and cane farmers. Technical assistance for cane farmers, better pest control. Learning to work a different way.

Video: Sugar Cane Factory Tour, Belize, 11min.
Sugar cane factory tour in Orange Walk Town, Belize, on June 14, 2014

Video: Sugar Cane Field Fire, Belize, 2min.
Sugar cane field fire before harvest near San Lazaro, Belize, on June 19, 2014.

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When is the Cane Mature and ready to Harvest?

Use a refractometer to determine maturity index of sugar cane. When the brix of the top is equal or close to the brix of the bottom it is ready to harvest. Anything equal to or above 85% maturity index is ready to harvest. Courtesy: BSI/ASR

Europe Is Waving Goodbye to Sugar Cane

Europeans’ taste for sugar transformed the world.

West Indies plantations built from the 17th century to feed demand drove a nexus of commerce, capital and manufacturing that fomented the industrial revolution and modern financial markets.

More than three hundred years later, Europe is set to deliver a crippling blow to a trade that once made up almost a fifth of its entire imports, and has sustained developing-country sugar cane farmers since.

The European Union’s decision to remove limits on its own beet-sugar output from October means less demand for cane growers from Jamaica in the Caribbean, to the Pacific island of Fiji, and Swaziland in southern Africa.

“Within a decade or so, I can see the EU market for raw sugar from the Caribbean being all but a matter of history,” said David Jessop, an adviser to companies and governments on trade and investment in the region. "The challenge from the Caribbean perspective is what they can do, if anything, to ensure the future of their industry."

Jamaica, Belize and Mauritius were among a group of more than 10 nations that benefited from quota- and duty-free access for 1.6 million metric tons of mostly raw-sugar shipments to the EU in 2015-16. The amount, which can vary year-by-year, represented about half the European bloc’s imports of the commodity.

While the countries will retain those privileges, their high-cost cane plantations may struggle to compete against EU beet farmers who are boosting yields and increasing scale. European output may expand by about 17 percent to more than 20 million tons and imports sink by about half with the changes, Rabobank says.

Click for the rest of the article in Bloomberg News

EU Says Goodbye To Sugar Cane

Belize along with various other countries who belong to the European Union’s preferential market are now bracing for direct competition following the recent EU reform on world sugar prices. In view of the introduction of beet sugar in Europe, Belize will no longer enjoy the preferential rates on sugar it has experienced in the past, thus, a reduction in prices of the sweetener is inevitable for Belizean cane farmers.

While Belize will continue to benefit from quota- and duty-free access for 1.6 million metric tons of mostly raw-sugar shipments to the EU, Belizean Sugar which stands among the highest production costs may struggle to compete against EU beet farmers who are boosting yields and increasing scale. And with eighty percent of Belizean produced sugar exporting to the EU the market is in no doubt facing troubling times. In a report analysis issued by the European page “BloombergMarkets”, Gerald Mason, Senior Vice President of Corporate Affairs at London-based refiner Tate & Lyle Sugars, is quoted as saying "It’s not that we want to leave those suppliers behind, but if Europe has made the white sugar market really competitive, we have to have access to more competitive supplies."

Under the EU, Belize is considered a market with limited alternatives and high production cost. Changes in world prices and the pressure to compete with other sugar producers can have a heavy impact on BSI/ASR, cane farmers and the economy of Belize.

Over the past years, Belize has become very dependent on sugar exports and reforms such as this can result in a deep dent on the sugar industry’s future. At the start of the 2016-2017 Sugar cane crop season back in December of last year Vice President of International Relations for ASR, Mac McLachlan, spoke of the changes that need to be done to ensure that Belize remains competitive in the new market which includes lowering the cost of production significantly which means that farmers need to start increasing productivity if they are to remain competitive in the industry. David Jessop, an adviser to companies and governments on trade and investment in the region is quoted as saying “Within a decade or so, I can see the EU market for raw sugar from the Caribbean being all but a matter of history”. The challenge from the Caribbean perspective, says Jessop, is what they can do, if anything, to ensure the future of their industry."

Prepared or not come, October 2017, the quotas that have always been a constraint for beet sugar will be lifted and beet sugar producers will be free to produce as much sugar as they like in the European Market. "It’ll be very much a question of the survival of the fittest," said Devesh Dukhira, Chief Executive Officer of the Mauritius Sugar Syndicate, representing growers. The question now is, if Belize can survive the fierce competition that is to come.

Caribbean nations are expected to meet in Kingston, Jamaica, this month to discuss the "existential threats" to the industry.

CTV3

This is how the juice from the sugar cane is extracted... Maya day, Blue Creek

EU, Sugar and Impacts on Belize

Two weeks ago we brought you the story on the possible effects that our local sugarcane farmers could face due to the European Union’s decision to remove limits on its own beet-sugar output. That decision was made some five years ago and is slated to take effect in October. With that decision in place, Belize and other exporting nations could face a serious hit on its sugar industry as the demand for the commodity will more than likely decrease. Agriculture’s Chief Executive Officer, Jose Alpuche spoke to Love News on how the Government is moving in addressing this concern.

JOSE ALPUCHE

“Well first and foremost the decision was not recently made this was made well over five years ago and we knew that 2017 would come upon us the October 2017 deadline so its not new, the meeting that was recently held in Jamaica, the stakeholders meeting, discussed this issue in-depth but with all commodities there is never an agreement on what the full impact will be because its a lot of projections going forward however the worst case scenario seems to suggest a 24% drop in prices and of course the impact of that would be real on our farmers if indeed the price drop materializes. Though I must say some of the commodity traders don’t believe that it will be a full 24% drop but we just have to work as it comes. At the core of all of this has been what we’ve been doing over the last many years to try to push the farmers to become more competitive that is at the core. We’ve known for the last fifteen years that the reform of the European market was in train and we would indeed arrive at this point where the erosion that we had both in terms of our real access to the market but also per country access to the market that it would materialize and that we would have an impact. Unfortunately that is where we are, we will be meeting with farmers later this week to update them on what came out of the Jamaica meeting and to try to urge them again and offer to them the facilitation rule that government has been taking* as it relates to the reform of the market.”

CEO Alpuche says that the ministry is making an effort to encourage the sugarcane farmers to look at diversification.

JOSE ALPUCHE

“We’ve been pushing very hard from the agriculture perspective, you are aware that we have a honey and a reform of the onion project ongoing up in the Corozal and Orange Walk district. We’ve been pushing the implementation of tropical greenhouse for people to diversify out into vegetables and we have several programs on going to try to diversify. What we found is a reluctance from some of the farmers to diversify out of sugar cane into other products. Although as we’ve demonstrated to them the earnings per acre is far higher with alternative products than sugar and we believe that this gap will only widen if indeed the sugar prices decline.”

The ministry will be meeting with farmers later this week to continue the discussion on the way forward with sugar.

LOVEFM

The Future of Cane Farming

Belize's sugar cane industry is one of the bedrocks of the Belizean economy, but, experts agree, it won't remain competitive much longer if farmers don't modernize. Presently, the old way of cane cutting with a machete is still the way cane is harvested, but now, ASR-BSI is trying to prod farmers towards mechanization. Daniel Ortiz found out more when he went North TO SAN ESTEVAN, Orange Walk today:...

Daniel Ortiz reporting
Mechanized Harvesting, it's a concept that's been floating around in the Sugar belt for a few years now, but for this crop season, BSI/ASR has actually been putting it into practice. There was initial resistance from the thousands of cane farmers who are used to hiring laborers to harvest their cane manually. But, they're slowly warming up to the idea, and for these last few months, 37 of them signed up to be part of a pilot project run by the millers to test out mechanical harvesting for themselves.

And what they have found is that BSI wasn't offering empty promises. This way of harvesting is more efficient and more cost effective.

Each these mechanized harvesters are able to cut 38 tons of cane per hour. Every time you see one of these high dumping wagons fill up, that's about 6 to 7 tons of cane being offloaded to a truck, which can be taken to the mill for grinding.

For this pilot project, BSI will oversee the harvesting of 28,681 tonnes of cane from these 37 growers.

Enrique Rivas - Field Agronomist, ASR/BSI
"This year we have already gotten 37 farmers that have signed with us, contracts with this mechanical harvesting pilot project. We have approximately 1,300 acres into the project. More or less, it is 35,000 tons that is being amalgamated. The benefit is to reduce cost. The industry as a whole is looking forward to reducing cost. What we want to do is maximize our profits."

And to qualify, each of these 37 farmers had to submit their cane fields to rigorous testing. The 250 fields that will be mechanically harvested were carefully selected for quality. They had to have the right level of flatness, free of debris like rocks and stumps that could damage the harvester's blades, and each row of cane had to be carefully measured out so that the harvester can properly pass over them and catch every stalk of mature cane.

Enrique Rivas - Field Agronomist, ASR/BSI
"We go about doing site visits. We have to visit all the cane fields that they are talking about, ensuring that the fields are at least harvester friendly."

But each and every one of the farms will be rewarded for their diligence. They will cut the cost of their harvest by $6.38 per ton of cane. That might not sound like much but, this project will see allow all 37 farmers to reap a total savings of 205,000 dollars.

That by itself justifies mechanized harvesting, but it has additional benefits. For one, harvested cane goes to the mill with less debris. Muddy cane has caused grinding to fall behind schedule due to the problems it brings. Mechanized harvesting cuts that down, and it also reduces the amount of cane lost during the harvesting phase.

So, that's a win all around.

Enrique Rivas - Field Agronomist, ASR/BSI
"Farmers will start realizing little by little that it is for the benefit of their families that we need to move into mechanical harvesting."

But, the harvesters burn a lot of fuel, and so, the project coordinators must make sure that they can efficiently use the machines so that the cost effectiveness endures.

Enrique Rivas - Field Agronomist, ASR/BSI
"What we have for fuel consumption is 1.2 liters per ton. We want to spend less or equal to 1.2. So if we can do less than 1.2, it is more efficient. That means you're spending less fuel for cutting that same ton of cane."

One cane farmer told us that he had to take a long look at the viability of his way of life, and that's why he tried out mechanized harvesting.

Cane Farmer
"Last year's price on the sugar definitely was not conducive for me as a cane farmer. If I continued paying the amount of price I was paying just for harvesting and delivery - the mechanical harvesting cuts my costs almost 20%. So if you are presently committed to any financial institution and the price of sugar comes at 50-52 dollars per ton, automatically you are out of business in 2-3 years. So things like that make farmers make drastic changes. Of course I was concerned, I was wondering in my cane fields are ready. If we do not make changes right now under the circumstances, a lot of us will be out of business, a lot."

So, with this crop cycle, less than 5% have tried it out for themselves. BSI is hoping that it will soon become the industry standard, but they accept that they can't get to a state of fully mechanized harvesting

Enrique Rivas - Field Agronomist, ASR/BSI
"It is not very likely 100%. Why? Because there are certain fields that are very rocky, so there is no way that you would be able to harvest cane with a harvester on those fields. Our way is paving at least 70-80% of the cane and if we can attained 90%, then it would be just much finer."

Ernesto Pop - Farmer Relations, Field Officer, ASR/BSI
"It's something new and we have to walk farmers through the project. We give them the benefits of it."

But, it's a move that the experts believe will help to keep Belize's industry viable.

William Neal - Communications & Government Affairs Officer, ASR/BSI
"This pilot project is indicative of the type of changes that the industry must make, in terms of trying to remain viable and competitive. We are a small country and the world market prices are set by larger countries like Brazil. If you want to compete, you have to see whether its $6 here or there. You have to see exactly where you can save a penny and it means in some cases that you have to move away from the way you always done it and having a romanticize kind of notion that this is the best that we can do to actually compete with everybody. Post Brexit and as the EU regime changes, we as an industry we have to come together and see what are the best ways that we can pool all our resources to make sure that we remain competitive, not only for this region, but globally as well."

Sugar’s Future Uncertain In EU

This is one of the many techniques that those in the industry are exploring to make sure that Belize's sugar industry survives sweeping changes coming in only a few months from now.

In 4 months, the European Union will lift all the restrictions that they had on European Beet Sugar. Belize and the other ACP countries will have to compete directly with beet farmers who are able to produce high quality sugar very efficiently, far more so than Belizean cane farmers.

But the local industry knew that this was coming, and they weren't sitting on their hands. They've been working on several techniques to improve their production, while cutting costs. This is all in an effort to hopefully prevent European market from swallowing the local market.

Today, members of the EU met with farmers under the accompanying measures for sugar, and we met one of those officials at another event this afternoon. We had a conversation with him about the impact that the regime change could have on Belize's sugar. Here's what he told us:

Gavin Tench, Political Counsellor - E.U. BZ Delegation
"We've all known this day would come so we have spent the last 10 years preparing for it. From what I've seen today and what I've heard today from cane farmers themselves from all those involved in the project overall, Belize's is adjusting to the big change coming up and there are a lot of positives going forward. So from where I stand we're quite pleased with what we've delivered together in partnership over the 10 years. I have every confidence that the industry in Belize will go from strength to strength."

Daniel Ortiz, 7News
"Is there any concerns that there will be transitional tremors for the industry when we move directly from that preferential market status?"

Gavin Tench, Political Counsellor - E.U. BZ Delegation
"We're in the realms of speculation here and of course one of the key driven factors is well market prices and unfortunately none of us has a crystal ball. I think there is the healthy approach for hope for the best, plan for all sorts of contingencies. As I say, the industry has got a solid foundation and has been preparing carefully for the day ahead."

Reporter
"Will the assistance continue on behalf of the EU?"

Gavin Tench, Political Counsellor - E.U. BZ Delegation
"Assistance directly on the sugar program will cease at that point but our overall level of assistance to Belize, our partnership with the Belize government continues and goes from strength to strength. Delighted to say that Belize was the only country in the Caribbean in the last negotiations for development funds to actually receive an increase. We are working very closely with the national authorizing office here. We'll see a lot of work going forward in the areas of energy, health, public financing management. So nobody should be under the allusion that this is the end. We may be changing our focus but our partnership is enduring."

Channel 7

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European Union Rep Says Belize Will Withstand Loss of Sugar Quota

In October of this year, the EU regime changes allowing for European beet sugar to compete directly with sugar cane. For the past ten years the E.U. has been working with the local industry in the north to prepare and adjust to the upcoming change. In an interview with the media today, E.U. Political Counselor Gavin Tench says that he is confident that the industry in Belize will strengthen because while the assistance to the sugar program will seize, the partnership with government in other areas continues.

Gavin Tench, Political Counselor, European Delegation/Belize

“One of the key driving factors is world market prices and unfortunately, none of us has a crystal ball. So, I think there is the healthy approach of hope for the best and plan for all sorts of contingencies. But, as I say, the industry has got a solid foundation and has been preparing carefully for the year ahead.”

Reporter

“Will the assistance continue on behalf of the E.U.?”

Gavin Tench

“The assistance directly on the sugar programme will cease on that point. But the overall level of assistance to Belize; our partnership with the Belize Government continues and grow from strength to strength. Delighted to say that Belize was the only country in the Caribbean in the last negotiations for development funds to actually receive an increase. So, we working very closely with the national authorizing office here will see a lot of work going forward in the areas of energy health, public finance management. So, nobody should be under the illusion that this is an end, maybe we may be changing our focus – or shift of focus but our partnership is enduring and it will get bigger and better.”

Mechanical Harvesting – the Future of the Local Sugar Cane Industry

With a drop in the price of sugar in the global market as well as a shift to beet sugar, the local sugar industry is at a crossroads. To remain competitive, the five thousand plus farmers have to look at how to cut production and harvesting costs to remain competitive.  At American Sugar Refinery/Belize Sugar Industry, pilot testing is taking place to encourage the use of mechanical harvesting which can effectively cut down costs in producing sugar.  News Five Duane Moody was in Orange Walk today where the millers put off a demonstration for the media.

William Neal, Communications/Gov’t Affairs Officer, ASR/B.S.I.

“This pilot project is indicative of the type of sweeping changes that the industry must make in terms of trying to remain viable and competitive. We are a small country and the world market prices are set by larger countries like Brazil. If you want to compete, you have to see whether it is six dollars here or there, you have to see exactly where you can save.”

Duane Moody, Reporting

Regionally, Belize has the healthiest sugar industry in the Caribbean. There are only three other countries—namely Barbados, Guyana and Jamaica – that export sugar to the European Union. But with the current sugar trade conditions, and as the E.U. regime changes, there is need for more efficiency in production and harvesting.

Cosme Hernandez, General Manager, Progressive Sugar Cane Producers Association

“Most of the times when changes occur it’s because situation arise where either you do it or you get out of it. Last year’s price on the sugar definitely was not conducive for me to continue as a cane farmer if I continued paying the amount of price just for harvesting and delivery. The mechanical harvesting cuts my cost almost twenty percent. So if you are presently committed to any financial institution and the price of sugar comes at fifty, fifty-two dollars per ton, then automatically you are out of business in two to three years.”

There are over five thousand cane farmers in northern Belize, majority are from the Orange Walk District. As it currently stands, thirty-seven farmers have signed on to a pilot program by the millers to venture into mechanized harvesting, which is the future for the viability of the industry during a most critical time. Field Agronomist, Enrique Rivas has been working closely with the mechanical harvesting pilot project with farmers this year.

Enrique Rivas, Harvesting Supervisor, ASR/B.S.I.

“The benefit is to reduce cost. The industry as a whole is looking forward to reducing costs. What we want to do is maximize our profits and one of the ways is to reduce the cost of harvesting and delivering this cane. So depending on the distance, we are charging farmers a lower rate than if it was being harvested manually because we don’t have the other costs that are incurred into manual cutting and loading.”

Most of the cortadores are from neighboring Central American countries. And aside from reducing that cost, the services provided by ASR/B.S.I. through the use of two contracted mechanical harvesters are more eco-friendly since there will be no need to slash and burn the crops. The goal is to get to ninety percent of mechanized harvesting. But what are the requirements that farmers must satisfy.

Enrique Rivas

“Once the farmer has created this interest of participating with us, then we go about doing site visits, ensuring that the fields are harvester friendly. That they are free of rocks and stomps because these can be dangerous for the equipment. The field conditions are right that the productivity is above forty to forty-five tons per hectare, which is approximately twenty to twenty-two tons per acre. So those are the strongest factors that we do have for selecting their fields.”

So why have farmers been reluctant to move into mechanical harvesting? Is this venture costly to small and medium farmers to buy in, when compared to manual harvesting?

Cosme Hernandez

“The farmers that are reluctant to get into the project are farmers that have their own equipment. If you have your own equipment it actual costs you between twenty-one to twenty-two dollars to cut and harvest your cane; that’s excluding payments sometimes to drivers. What happens is some farmers own their equipment, they operate the cane loader, the brother drives the truck so that they continue in business. But the farmer that is solely a producer really has to find ways to cut on the cutting and the delivering of cane.”

Ernesto Pop, Farmer Relations Field Officer, ASR/B.S.I.

“Some of the concerns is distance from factory, would it cost more. That’s one of their major concerns. Another one would be like their field conditions; so how we go about improving their field conditions as they join the program.”

In terms of small farmers, associations have been looking at a possible contract in which caneros collectively agree to harvest at the same time using the mechanical harvester as a tool to cut costs. Duane Moody for News Five.

Channel 5

Has Caribbean Sugar Got A Future?

The sugar industry in the Caribbean could face some challenges

Written by David Jessop

UNLESS the sugar industry in the English-speaking Caribbean can develop a concerted plan of action over the next few months, it is quite possible that in a few years’ time there will be little left of an industry which, for evil and good, has played a central role in the making of the region, writes David Jessop.

This is because this year will see two tsunami-like events occur, both of which threaten the survival of the industry in its present form. The first relates to the changes that will take place this October in Eu- rope’s sugar regime. Then, as a long- planned measure, the EU will abolish national beet sugar production quotas in Europe, reducing prices and causing the overall volume of sugar imported to fall as Europe becomes self-sufficient.

For high-cost Caribbean cane sugar producers – Guyana, Barba- dos, Belize and Jamaica – this poten- tially spells the end of the European market. The second challenge arises out of the UK’s decision to leave the EU. Britain has officially given for- mal notification to the EU to leave, triggering years of uncertainty for all of Britain’s trade partners as they negotiate new arrangements.

For the Caribbean region, which still exports much of its sugar to the UK for refining, this means that until the UK formally separates in 2019 at the earliest, Britain is unlikely to be able to reconcile politically, how it will address the sugar issue.

This is because any UK Government is going to have to determine how to balance and resolve the competing post-Brexit interests of its domestic beet sugar producers, its cane sugar refiners, desired trade deals with major cane sugar and by- product producers like Brazil and the continuing problems of Caribbean agricultural development.

It is already clear that the British Sugar Corporation, which represents Britain’s beet farmers, is preparing for a monumental fight. They make the case that because they are efficient and make a significant economic contribution to the UK economy, they offer Britain the opportunity to protect the UK from imports of cane and beet sugar from foreign producers, wherever they may be.

Unfortunately, the industry in the Caribbean must address both challenges at a time when the sugar sector still has many fundamental, unresolved issues.

While progress is being made in Belize and Jamaica, and the Dominican Republic has a viable privatised industry, there remain problems across CARICOM arising from the persistently high cost of production, poor labour relations, and inefficiencies.

More significantly, despite years of discussion and external support, governments and the industry have so far been unable to under- take the type of reforms underway in countries like Mauritius which have viably linked sugar production to sugar refining, to the rum and ethanol industries, and to power generation and food production. What is now happening in Europe raises questions about whether sugar production can survive in the Caribbean.

A conference in Jamaica has just taken place, aiming to find a basis on which a common response might be achieved. The most likely outcome is to place greater emphasis on sugar production for the regional market, a decision that would require an adjustment in the region’s Common External Tariff to protect the industry while it adapts to new market conditions.

Although any measure that sustains higher sugar prices in the Caribbean may prove controversial with for example the region’s soft drinks manufacturers and rum producers who want low cost raw materials, a viable future for the sugar industry remains important.

Even if the industry now only accounts for less than two per cent of regional GDP – a figure that pales in comparison to tourism – it is still a significant employer of labour, a supporter of rural communities, a provider of a range of social services, preserver of the environment and contributor to carbon reduction, while halting urban drift and the associated problems of crime.

What eventually transpires remains to be seen, but within 10 years, the EU market for raw sugar from the Caribbean will most likely be all but a matter of history. Hopefully by then, what is left of sugar in the Caribbean will be very different, reoriented, efficient and part of a broader cane-based industry.

David Jessop has worked on Caribbean issues for more than 40 years. He consults on Caribbean political and economic affairs, has a weekly syndicated column that for the last 20 years has appeared in the leading newspapers in the Caribbean, and is the editor of Caribbean Insight and Cuba Briefing. He is also a non-executive director on the Board of Jamaica National Money Services Ltd.

Source

Caribbean sugar is close to a sticky end

A century and a half after slavery ended, the plantations are closing

IN ITS 18th-century heyday cane grown in the Caribbean and cut by African slaves provided Britain with nearly all its sugar. The masters of this brutal trade made enormous fortunes. But it has seen 200 years of decline, accelerating after slavery ended in 1838. Now the region is wondering how it will cope after a policy change by the European Union which could finally bring down the curtain.

Today, the English-speaking Caribbean produces under 0.3% of the world’s sugar; Brazil grows nearly a quarter. Many islands have abandoned cane for more profitable activities. Trinidad closed its last sugar factory in 2007, and a gas-related boom took up the slack. St Kitts shut its last factory two years earlier, after the debts of its state-owned managers approached a third of GDP. A railway that trundled cane now carries tourists. St Kitts’s new staple is passports for foreigners, sales of which finance an opaque development agency, the Sugar Industry Diversification Foundation.

Four Caribbean countries retain their taste for the sweet stuff; altogether, the industry employs more than 40,000 people. But even where it survives, sugar is in trouble. In Guyana 5% of workers still cut cane. But the state-owned sugar company has been losing money since 2008, and exports are expected to plunge by nearly 40% this year. Nearly half the people on the payroll fail to show up regularly. The ruling coalition, which relies on voters of African origin, has laid off 3,500 workers who are mostly of Indian descent; this risks inflaming racial tension. The government has put three of its six sugar estates up for sale. There may or may not be bidders.

Jamaica has privatised, de-privatised and re-privatised its failing sugar estates, selling three to a Chinese company in 2011. The buyer now complains of low productivity and an awkward government, and says growing sugar is easier in Africa. In Barbados sugar accounts for only 0.2% of foreign-exchange revenues (down from 55% in 1946), but the government says it hopes to revive the industry with a new $270m factory on the site of an old one. The project has now been blocked by an environmental lawsuit. Only in Belize, where sugar provides a quarter of export earnings, does it seem to have a future. Last year a Guatemalan firm opened a factory there producing high-value white sugar.

The region’s wrinkled terrain and volatile weather make it hard to compete against the mechanised sugar operations of Brazil and Australia; average costs in the Caribbean exceed the world price. Britain long offered the industry tariff protection, which was formalised by a Commonwealth Sugar Agreement in 1951. After Britain joined the European Economic Community in 1973, it ensured Caribbean producers had access to the club at high guaranteed prices. This mollycoddled outdated practices, like harvesting by hand.

The EU has been reducing protection since 2005; first it cut the guaranteed price, then abolished it. In October the EU ended quotas which had limited the beet its farmers could grow. Output of European sugar is likely to surge, depressing world prices.

To avert catastrophe, Jamaica’s growers propose that Caricom, a group of 15 mostly English-speaking Caribbean countries and territories, should slap a tariff of 40% on sugar from outside. But with many regional economies either stagnant or wrecked by storms, the 7m people affected will balk at a policy that will raise the cost of biscuits and fizzy drinks, consolations which need lots of imported sugar.

The Economist