Publication: Daily Nation
Paper Section And Page: 8A
Paper Date: Wed, Jan 3, 2001
Category: Current Affairs
Byline: by Lt. Col. Stephen F. CAVE
I AM CURIOUS as to what Senator Keith Laurie was trying to achieve when he published a letter in your newspaper under the heading Raw Sugar No Longer Viable.
It has been well known for sometime now that the manufacture and sale of raw sugar was uneconomic and this was been particularly so in the last two years with the fall in the value of the euro against the United States and thus the Barbados dollar.
He seemed to quote the disadvantages of building a new factory, but ignored the advantages. He quoted several alternatives to raw sugar but in almost every case they were even less viable than raw sugar.
For example, he implied with his suggestion that canes could be grown for niche markets, that we could produce special cane juice rums, but he did not even remotely suggest what acreage of cane that would require.
If, for example, 100 000 cases (1.2 m bottles) of such rum were produced annually and exported it would not require more than 350 acres of cane to produce sufficient cane juice. Where would that leave the rest of the industry. Producing for niche markets would in no way make up for raw sugar production.
It is true to say that almost all agriculture in industrial countries is no longer viable. This was so in the case of the two leading economic blocks - the United States and Europe - where for many years their taxpayers have subsidised their agriculture. In countries where no subsidy is provided, starvation and malnutrition abound.
He suggested that a new factory would cost $150 to $200 million to build but the most recent estimate I have seen was a cost of under $150 million. He stated that the payment of interest on a loan of $150 milion would only add to our astronomical costs.
Of course it would, but he did not consider the massive savings in labour and material that a modern factory would bring. Nor did he consider the extra sugar a modern factory would produce from the same amount of canes, nor the advantages of the Barbados Light and Power Company of the production of electricity from a co-generation plant burning the bagasse.
He talked about the "astronomical costs" of the Barbados sugar industry, but one must always remember that since 1973, the Barbados dollar has been tied to the US dollar and that we were paid for our sugar in euro. Jamaica, Trinidad and Guyana produce much more cheaply, but their currencies are unstable and are frequently devalued.
Further, while the Government supported the industry financially, one should remember that the industry paid back to Government large amounts of PAYE and National Insurance contributions to say nothing of the taxes that ancillary industries paid on profits made out of the sugar industry.
One could go on and on along these lines, but the fact remains that if sugar were removed from Barbados, agriculture here would go into immediate reverse and the Prime Minister has stated that it was his and his Government's intention not to let agriculture disappear in Barbados.
While a new sugar factory would be a large investment and would have to be paid for, in the long term it would probably ensure the survival of sugar in Barbados.