The statement by Dr. Attlee Brathwaite that the sugar industry was essentially bankrupt was not news and certainly came as no shock to anyone. The vagueness of language used to describe the fortunes of the island’s major agricultural enterprise is quite remarkable. Pin the sky dreaming and wishful thinking that has replaced hard business decisions and serious strategic planning has brought us to this pass.
It is no secret that the BAMC plantations operate at a cost level that is at least 50 percent higher than privately owned and operated plantations. Private growers of sugar cane produced approximately 200 thousand tons of cane last year and received $15 per ton subsidy from government. This subsidy was not enough to cover increased cultivation and harvesting cost and the resultant loss that they made cannot be sustained. One must wonder what the BAMC subsidy was, as the $160 million raised in bonds has been now exhausted.
The cultivated area of sugar cane is now so reduced that Andrews factory, in its present configuration, could process all the harvested sugar cane this year. Yet the current plan is to operate both Portvale factory as well as Andrews thus essentially doubling the cost of processing.
Comments made in the press indicate that substantial working capital would be needed to cultivate and harvest the crops over the next three years and that major investment capital would be needed to transform or restructure the industry. It would be nice if some concrete figures could be attached to those statements.
Currently the BAMC cultivates sugar cane, harvests it and transports it to the factories for processing. The expense of the BAMC is covered by the taxpayers of Barbados and the money received from the sale of sugar. As the guaranteed price of sugar declines, as it has in recent years, the portion paid by the taxpayers increases. Meanwhile the BAMC efforts to control costs have not been stellar.
It is long past time that we had an open and frank debate in the country on the future of the sugar industry and what it means for us, both in terms of all the benefits and costs to the society. Government can no longer be expected to write a blank cheque for the industry as it chases will o’ the wisps for alternative uses for sugar cane. For example high cost sugar cane can only produce high cost ethanol and high cost cane fiber is an expensive alternative fuel.
Then there is the issue of planned capital cost. To talk of spending $200 million to build or upgrade a factory is a fantasy that rivals Disney’s Magic Kingdom.
The sugar industry is of vital importance to all Barbadians and it deserves to be discussed in a transparent and open manner that would frankly address the issues of employment and efficiencies that could be brought to bear. Plain speaking is needed and hard headed business decisions need to be taken to either continue the production of sugar or to bring the industry to a safe landing before economic gravity takes over and we have a crash.
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