POLITICS AND ECONOMICS: RESTRUCTURING THE TRINIDAD ECONOMY

The policy advocated by the W.F.P. has been strongly counter-attacked by the sugar interests, Government spokesmen, and independent technical experts. Both the P.N.M. and the sugar companies (which are largely British owned) vigorously deny that sugar is now grown on the best lands. The Tate and Lyle interests (hereafter the Company) which are responsible for 90% of the sugar grown in Trinidad, have taken the view that there is ample land in Trinidad for the cultivation of both sugar and new food crops without one displacing the other. They find reinforcement for this claim in the view expressed by a F.A.O. study in 1957 that:

“The sugar estate area, although intensively cultivated is naturally poorly endowed for agriculture; the soil rs generally of low fertility and difficult to drain. In an uncultivated state it would appear far less suitable for agriculture than some presently uncultivated areas … it is probable that the …. uncultivated areas …. are generally less suitable for agriculture than those more intensely used. The difference in natural conditions should not, however, be exaggerated”.

Government and Company spokesmen question the economic soundness of those who argue that sugar production should be cut back to make room for other crops when there 1s no land shortage. They also note that the chief food produced for domestic consumption is in fact sugar (worth $7 m) and that sugar is used as a basic raw material for several domestic industries. The Company also rejects the notion that they should only produce the quantity of sugar which can be disposed of on the U.K/U.S. premium priced market and release the remaining lands for market gardening. It notes that import quotas to these markets, – especially the U.S. market are calculated on the basis of total output. Quotas fall as output falls. Moreover, sugar sold on the depressed world market helps to reduce the overhead costs of that produced for the premium market. As one of the countries most important foreign exchange earners and sources of employment (about 100,000 persons depend on sugar for a livelihood) the Company feels that its prime responsibility is to maintain Trinidad’s position in the world market by increasing production at considerably reduced cost.

Tate and Lyle also claims that it has no spare lands to release, and refuses to countenance any suggestion that it divest itself of its 73,000 acre holding (about 52,000 of which are in sugar). In fact it claims to be dissatisfied with the way in which the 8,000 acres now leased to peasant farmers are being utilized, and in 1961 moved to evict some of them, encouraged perhaps by the high price for sugar that followed upon the collapse of the Cuban crop. It is worth noting that between 1921 and 1965 the number of cane farmers dropped from 26,425 to 11,097, 95% of whom produce on less than 50 acres. The cane-farmers, who in 1921 produced 57.7% of the canes cultivated compared to 33.6% in 1963, have been highly critical of the limits imposed on production since 1937 and about the way in which their produce is handled by the companies have recently succeeded in getting the Government to appoint a representative Sugar Industry Control Board to oversee their interest.

The Companies feel that increased peasant farming would increase costs significantly and perhaps reduce production. In 1966 a short fall of 40,000 tons cost them valuable earnings in the U.S. market. Despite the attempts of the P.N.M. and the farmers themselves to improve methods of production, yields on the plantations are twice as high as that on peasant holdings.

Sugar cultivation in Trinidad is progressively becoming an “eyebrow” operation with small margins. It is now widely recognised that the costs of production in Trinidad $192 per ton exceed the prevailing world price by about $122 per ton, and that it is only the premium prices which are paid for about 73- 75% of the crop in the British, American and West Indian markets ($228, $220 and $225 respectively) that permit the industry to make any profit. According to Company claims (which are however hotly disputed by the W.F.P. and Union spokesmen), profits dropped from 16% in 1959 to 3% in 1966. The latter figure, it is said, was only made possible through recoveries from the Price Stabilization Fund, and was not enough to pay good dividends (2.4% on equity shares) or provide backing for attempts to float capital to modernize and increase competitiveness. According to a Guardian Report, the Company considers 17 .5% a reasonable profit. It is also felt that if Britain succeeds in her bid to enter the E.C.M. as seems inevitable, however long it may take, the chances are that the preferences and premium prices will be eliminated or reduced in some way. They may in fact be reduced at the end of the present agreement period in 1974 whether or not Britain enters the Market. The revival of the Cuban sugar crop in a more highly efficient form and Castro’s seeming determination to destroy rival “bourgeois” producers, also bodes ill for the high cost Trinidad industry. It is worth noting that other Commonwealth producers have managed to keep costs down to about $158 per ton. Whereas new comers can make use of capital intensive techniques, this is obviously less easy for Caribbean countries which, so to speak, were “born in the sugar cane plantations” over three centuries ago.

The Companies feel that they must be permitted to mechanize or face extinction as have the industries in St. Vincent and St. Lucia. The goal of maximum employment might have to be sacrificed for the greater good of the survival of the industry. It is worth noting that as in oil, there has been a secular decline in employment in the industry since the end of the Second World War. In 1962 there were 3,400 fewer people directly employed by the industry than there were in 1951 and Tate and Lyle anticipates a further 17% reduction by 1968. Plans are afoot to make greater use of automated pest and weed control devices. Above all, mechanical harvesters and self-loading trailers which, when operated by two men, do the work of 88, but these are to be phased in over a period of up to 12 years. The harvesters are expected to cut costs by about 50%. The Company feels that its technology is as advanced as in any country and that harvesting is the one area that remains to be rationalised.

The sugar interests have also been demanding a wage freeze in the industry (wages are said to have risen by over 38% in the last five years, much faster than retail prices), and they claim that the alternatives are frozen wages or no wages at all has apparently been accepted by the Industrial Court (created in 1965). The Company has been permitted to proceed with its phased mechanization plan and to reduce its work force by attrition rather than by direct retrenchment. It has also been permitted to finance wage increases and improved pension benefits ordered by the Court by increasing the price of domestic sugar (which had not changed for 16 years) and by drawing on the employers’ share of the Price Stabilization and Sugar Rehabilitation Funds. The Amalgamated Sugar Workers Union and the Cane Farmers Association have approved the Court’s rulings. Tate and Lyle has also promised to help settle redundant and seasonal labour on company lands, and to assist the Government’s diversification and “Better Village” programmes in whatever way it can. Some efforts have already been made in this direction and in the area of worker housing.

The settlement in sugar has drawn stormy criticism from radicals in the country. The Court and the P.N.M. have been bitterly accused “of stabilizing and standardizing the age-old exploitation that has kept our workers poor” as if 1937 had never happened. Like the oil companies, the sugar companies are accused of hiding profits, padding operating costs, paying ridiculously low wages to native workers (despite increases in productivity of 40% between 1956-63) while paying astronomical wages to expatriate staff and of trying to make as much profit as is possible before “the flood”. “If sugar is uneconomic to produce it is so at least in part because the owners are taking too large a share of the wealth produced and the staff too large a share of the wages”. The W. F. P. has in fact proposed that if profitability is made the yard stick, and if oil and sugar do not diversify or help with resettlement, “the commanding heights” of the economy would have to be nationalized.

After waging a strong battle to prevent the sugar companies from mechanization, the P.N.M. as well as the D.L.P. (unlike the Government of Jamaica) have conceded that the industry must use the breathing spell offered by the present premium price arrangements to prepare for the world market competition which all see as inevitable. As the Prime Minister declared to the Party Convention in 1966, “the best policy in the national interest is the production of sugar as efficiently as possible whilst redundant workers are settled on government lands to grow food crops”. This policy was foreshadowed in the 64 – 68 Development Plan which announced that “marginal producers will be encouraged to switch from cane-farming to some other form of agricultural undertaking”.

Even if the seizure of the sugar estates was an economically worthwhile policy, which the P.N.M. denies it is, the Party would have rejected it. As the Prime Minister declared:

“We are not going to nationalize and take people’s lands to have it owned by the state and then have people work for the state. Let them work and develop their own lands. The state is giving away land instead of taking it away as in communist countries.”

Williams in fact accuses the W.F.P. of being Castro inspired and of pursuing a Bolshevik land reform strategy promising land to the peasants only to collectivize or nationalize it as Castro has done with results that he believes to be disastrous economically as well as politically. In his view, the test of statesmanship in the new countries is “to avoid the Charybdis of critical underdevelopment as well as the Scylla of chaotic rebellion or totalitarianism”. The P.N.M., he boasts, has given Trinidad ” the finest agriculture programme in the West Indies.”

Williams also asserts that nationalization is irrelevant since Government owns about 35% of the land and small farmers (under 50 acres) hold about 43% of the remainder. Unlike Cuba and Brazil “Trinidad is a paradise for the small farmer.” Williams also notes that the sugar estates hold just over 16% of the private lands compared to Cuba where about 20% of all lands were owned by absentee sugar interests. While it is true that land owning was more monopolistic in Cuba than it is Trinidad it is nevertheless the case that 1.6% of the holders of land own about 40% of the total private acreage. Just the same, the P.N.M. is not convinced that fragmenting sugar estate holdings among cane farmers will yield viable units for cane farming. “To divide up the estate lands among tens of thousands of cane farmers is to destroy an industry which in 1965 earned us $42 m in foreign exchange out of a total of $673 m. And as Williams had written as early as 1942, “Haiti’s revolution destroyed her wealth. Economic progress and political reform cannot be achieved by destructive means, Sugar is the curse, but it is also the staple of the Caribbean.” Developing public lands represents the best and ultimately the least “costly” line of attack on the employment and foreign exchange problem, every-thing else being considered. The key difficulty is to find enough money and skills to do the job properly in the face of budget pressures which in 1967, for example, forced a reduction in the allocation for agriculture from $7.4 m to $6.8 m.