ECONOMY-JAMAICA: Row Derails Sugar Replanting Programme

By Zadie Neufville Reprint | | Print |

Zadie Neufville

KINGSTON, Jun 20 2002 (IPS) - Six months after the Jamaican government announced special loans to replant some 40,000 hectares of sugar cane, only 11 of more than 2,000 registered cane farmers have managed to access the loans.

With only two weeks remain in the planting season, “it’s enough to make farmers mad,” says Alty Lewis a 40-year veteran of the cane fields.

Farmers are demanding the restructuring of the industry and removal of Derrick Heaven, chief executive officer of the government-owned Sugar Company of Jamaica (SCJ). Heaven has refused to assume responsibility for the 3.6-million-dollar in replanting loans allocated for farmers.

Prime Minister P.J. Patterson is under pressure to resolve the situation and his response, analysts say, could make or break the ruling People’s National Party’s bid for a fourth term and either hasten or prevent the demise of an industry on the verge of collapse.

Also at stake are more than 500 million dollars in public funds pumped into the industry since 1997, and 40,000 jobs and social stability in rural parts where some of the nation’s poorest depend on sugar for their survival.

The industry was born some 300 years ago. Windmills and waterwheels gave way to steam broilers but the gas turbines that replaced them at the turn of the last century no longer meet the needs of sugar producers. And while labour intensive cultivation made slave masters wealthy, analysts say, it is making Jamaican sugar far too expensive to compete.

Agriculture Minister Roger Clarke says ways must be found to slash as much as 30 cents off the cost of each kilo of Jamaican sugar, to bring production costs in line with world market prices of between 34 and 40 cents per kilo.

Jamaica sells sugar under preferential arrangements on the European market but these agreements run out in January 2008. Clarke says he wants to see increased sugar cane output and falling production costs; in the last three years, the opposite has happened.

Local scientists say disease and more than 300 years of cultivation have sapped the land of productivity. They propose a massive soil reconditioning effort involving the replacement of older cane roots, some of which date back between 20 and 50 years.

According to a 2001 Sugar Industry Research Institute (SIRI) report, the industry needs to significantly increase production from the prevailing 110-198 tonnes of cane per hectare, to a world standard of 250-270 tonnes per hectare, in order to meet a target of 300,000 tonnes of sugar per year.

Sugar earns some 100 million dollars a year for Jamaica and has the potential to earn significantly more, says Abaijah Buchanan, head of the cane farmers’ movement. But it is an industry plagued by breakdowns, inefficiency and debt.

In the last three years, more than 122 million dollars has been spent propping up the industry only because it provides employment for the poorest rural communities. Last November, Finance Minister Omar Davis announced a bailout package of more than 100 million dollars to provide operating capital and to service the SCJ’s debts. A few weeks later, he announced another 12 million to write off old loans and provide new replanting loans for cane farmers.

The political opposition and others dismissed the moves as a desperate bid to save a dying industry. But for a government struggling to find a winning formula for the sugar industry for more than 10 years, Davis said, the intention was to kick-start the replanting programme, which was more than a year overdue.

Since the loan announcement, however, farmers and the SCJ have been at loggerheads about how money is being disbursed. In addition, the Development Bank of Jamaica (DBJ), the agency responsible for providing the money, says it will no longer accept crop liens as collateral.

The problem is that most cane farmers do not have certificates of tenure for the land on which they farm and are therefore unable to provide the collateral the bank asks for.

“We have decided to separate commercial and viable farming from subsistence farming to protect the public’s money. We have lost too much money this way,” says Kingsley Thomas, DBJ’s head.

The result: very few farmers have qualified, very little replanting has taken place and the cane shortages now being experienced by factories nationwide are expected to worsen as young canes have been washed out and fields have been left soggy and covered in silt after nearly three weeks of flooding.

The unwillingness or inability to repay past loans has contributed to the problem the farmers now face, says agriculturalist Marjorie Stair.

“Over the years, the People’s Cooperative Banks have suffered heavy losses because of a practise called ‘selling over the fence’, where farmers sell their cane under an alias to avoid deductions,” she says.

The DBJ’s Thomas is adamant that government must find other ways of funding replanting programmes for the landless farmers. Buchanan and the farmers, however, say the DBJ and SCJ have the responsibility to protect the industry.

“We are unable to offset our expenses because SCJ pays us so cheaply,” says Noel Low, a career farmer. He says government sugar factories pay farmers between 8.66 dollars and 14.43 dollars per tonne. Private factories pay 20-22 dollars but represent a smaller fraction of the industry.

Lewis, who cultivates 12 hectares on the island’s west coast, says that prior to the write off, loan payments took 40 percent of his earnings. From the remainder, he had to buy fertiliser and hire field labour.

For farmer John Plummer and many like him, the solution is simple: “All we need to do is sit down with the authorities and let them hear our cries because we need a fresh start,” he says.