SUGAR SYMPOSIUM: DIVERSIFICATION AND THE BURDEN OF SUGAR TO JAMAICA

Meat also offers the advantage of further processing of domestic products at home. But of even greater importance is that the skins of these animals could form the basis of a thriving leather industry, since price-wise we are significantly cheaper than the sources of current imports. There is also the possibility of developing a major feedstuffs industry. Currently we import over 50 million lbs. of feedstuffs. But on the basis of a vastly expanded cattle population, requiring 3 1/2 – 4 lbs. of feed per gallon of milk produced, plus 1,000 lbs. of feed for beef animals as a supplement to natural fodder if we are to operate efficiently, then the feedstuffs industry would need to produce something like nearly 500 million lbs. of feed.

This leads on to the four the area of diversification, the production of corn or maize. This will not only replace present cereal imports valued at £8m. but could provide along with such products as copra meal and cake, pineapple bran, bananas, cakes and meals of wild palms, etc. the basis of a vast utilization of indigenous products as an input into an indigenous industry. There are other crops which time and space prevent one from looking into. But one other deserving of mention is tobacco of which we imported 2.6 million lbs. in 1966 (most of it from Rhodesia).

It may be further noted that one feature of all these forms of agriculture we have considered is their high labour intensity. And this together with the manufacturing industries they can create could go some way towards solving the unemployment problem. The foreign exchange value of the products I have considered was vaulued at £3om. in 1966 as against £19m. gross earnings of the sugar industry.

Finally diversification of land use also involves the non-agricultural use of land for housing, recreation facilities, etc.

Challenge to Government and The Industry

There are two points I would like to conclude with very briefly and these are of a deliberately controversial nature. It seems to me, on the basis of present data and knowledge, that the peasant farmers who produce half the sugar output are the most efficient producers of sugar cane. They receive, to quote the Mordecai Report, £4. 17. o. less per ton of sugar than the estates and yet continue to produce cane. Unless they are fools, which I am certain they are not, they would not have continued to do so unless it was compensated for by greater efficiency.

It should also be noted that in the evidence supplied to the Mordecai Commission by the Sugar Manufacturers’ Association that of the 18 estates, 13 of them claim to produce sugar at a cost of more than £40 per ton. This suggests considerable diseconomics of scale. This is due not so much to sheer size but to the ownership structure of the industry and all its historical and sociological implications. And as a last point I think we should look at the problems of time horizon and risk. The sugar boys require guarantees for ten years and to quote this evidence to the Mordecai Report again, “even an average weighted return of 8.88% (for the 7 year period 1959-65), the Association regards as inadequate in relation to a risk industry”. Notice here, despite public pronouncements to the contrary there is the clear admission of how much risk the industry involves.

Here then is my challenge:

Evaluate a programme along the lines I have suggested on the basis of:

(1) continuing guaranteed markets of ten years ahead,

(2) offering the incentives which now go to foreign capitalists to our local peasantry and to those who can engage in activities centred on the suggested “new” forms of domestic agriculture,

(3) guarantee a return of 8.88% per annum which the sugar estates find inadequate and calculate the risk along the lines of national and not private interest.

Then tell us if sugar, particularly plantation sugar can justify its present form, shape, size and location on the basis of the interest of Jamaica. As a postscript may I ask, please, please publish the findings.

 

Clive Thomas lectures in Economics at the University of the West Indies, Mona.