SUGAR SYMPOSIUM: THE SOCIAL ECONOMY OF SUGAR

Now when the government has calculated the social returns to total factor input in the sugar industry they will have to make comparisons with alternative activities. We are also eagerly waiting to hear what they have done. I therefore turn to some of the factors which arc relevant here. The most important point I think, is that you cannot carry out these comparisons in any proper and approvable sense if you assume all other things to be the same. The whole point of government policy is that other things must change. The most important and restrictive of these existing condition is the distribution of income. Some years ago it was calculated that Jamaica was among the countries which had the most inequitable distribution of income in the world. The top 20% of the householders got 61.5% of the national income whilst the bottom 20% got only 2.2% Another condition is that it is necessary and desireable co alter artificially the volume and structure of per capita consumption and the kind of relative prices which at present exist. For ample is the ratio between the prices for pork and beef and the price of flour and root crops the correct one from the point of view of promotion what ought to be our consumption targets?

These questions themselves immediately give rise to the problem of income transfers. The debate about sugar cannot again be conducted in a social and economic vacuum. In carrying out these comparisons, in a dynamic sense, it has to be realized too that the external economies and diseconomics of industries vary. The sugar industry for example in its present organization creates some tremendous diseconomies without creating any substantial economies. What is even more important is that whilst the boundaries of the present sugar industry are very limited (sugar, rum, molasses) the boundaries of other locally controlled activities need not be. The livestock industry, for example, can include animal feeds, fresh meats, dairy products, the vast potted and preserved meat industry, hides, leather, and leather products. (A small country like Israel already has over 5,000 people employed in the leather pro-ducts industry alone, nearly as much as there are in sugar manufacturing in Jamaica.)

I come now to foreign exchange earning which have an important place 10 the support for sugar. Here again I must emphasize that the foreign exchange earnings of sugar cannot be considered in vacuo. The immediately pertinent questions we have to ask are ‘what is the total foreign exchange requirement.?’ and at what cost foreign exchange?’ I want to look briefly at these putting sugar in the picture. There is in Jamaica no rational approach to the calculation of the country’s foreign exchange requirements. This is an old quarrel which cannot be gone into detail here. The first thing one ought to do in approaching this problem is to calculate the import content, i.e. foreign exchange content of the programme of development. This to my knowledge has never been done. Thus the foreign borrowing programmes and cries of shortage of foreign ex-change are being based on rather spurious principles.