Has Caribbean sugar a future? – Trinidad & Tobago Express

Unless the sugar industry in Caricom can develop in the coming months a co-ordinated and concerted plan of action, 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 Caribbean. 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 the European Unions sugar regime. Then, as a long planned domestic measure, the EU will abolish national sugar production quotas in Europe. This will have the effect of reducing the price paid for sugar from the African Caribbean Pacific group of nations (ACP), while also causing the overall volume of EU sugar imports to fall as Europe becomes self-sufficient. The measure, according to the European Commissions late 2015 report, EU Agricultural Outlook 2015 - 2025, is likely to see the EU sugar price declining to something approaching the already low world market price, forcing the EU sugar sector to become more competitive, and reducing the incentive for trade partners to export to the EU. For high-cost Caribbean producers Guyana, Barbados, Belize and Jamaica and almost all smaller cane producers in the ACP, this potentially spells the end of the EU market, as previously quota-restrained EU beet farmers expand production, taking advantage of much improved yields and industry consolidation, to sell without restriction across Europe and to export. The second challenge arises out of Brexit which will trigger years of uncertainty for all of Britains trade partners as they negotiate new arrangements. For the region, which still exports much of its sugar to the UK for refining, the timing is complicated. Not only will the new EU sugar regime apply to the UK until it formally separates in 2019 at the earliest, but this means Britain is unlikely for some time yet, to be able to reconcile politically, how it will address the sugar issue. This arises because any UK government is going to have to determine how to balance and resolve the competing post-Brexit interests of its domestic sugar producers; its cane sugar refiners; desired trade deals with major cane sugar and by-product producers like Brazil; and ACP development, probably in that order. Unfortunately, the industry in Caricom 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 not so far been able to undertake the type of reforms underway elsewhere in the ACP that could viably link sugar production to sugar refining, to the rum and ethanol industries, and to power generation and food production. What is now happening in Europe, however, goes further, raising existential questions requiring a regional consensus and response. In this context, a High Level Caribbean Sugar Policy Workshop planned for Kingston, Jamaica, on March 23-24, is of potentially great importance. Organised jointly by the Sugar Association of the Caribbean, Caricom and other partners from inside and beyond the region, it involves ministers, officials and most importantly a wide range of industry partners, whose future governments now hold in their hands. Some possible approaches to the discussion were contained in an ACP-endorsed study produced last year by Cardno/LMC International. This set out the risks facing ACP sugar producers from changes to the EU sugar regime, reviewed the situation in each ACP sugar-producing nation, and suggested possible mitigating actions. It recommended, in part, that the regional integration of ACP sugar industries should be a priority. In this context, it noted that while governments were free to support their industries by raising tariffs, co-ordination within free trade areas would be required if producers were to gain. 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; supports rural communities; provides a range of social services; preserves the environment and contributes to carbon reduction; and indirectly halts urban drift and the associated problems of crime. Within ten years the EU market for raw sugar from the Caribbean will most likely be all but a matter of history. While sugar production in Caricom is unlikely to cease, hopefully by then what is left will be very different, reoriented, efficient and a part of a broader cane-based industrial sector. David Jessop is a consultant to the Caribbean Council

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Has Caribbean sugar a future? - Trinidad & Tobago Express