SUGAR SYMPOSIUM: THE SOCIAL ECONOMY OF SUGAR

I have some time veered towards the idea that in this regard Jamaica’s problem is an overabundance of foreign exchange (the total of which now amounts to probably over £1oom). It is partly this over-abundance which permits the continued importation of the fripperies we see around us and the obvious haphazardly in determining the priorities for foreign exchange use and borrowing.

Look now at an aspect of the cost. Since 1954 the gross annual income of sugar has gone up by about £6m. The net incremental foreign exchange earning would be less than this since the sugar industry itself uses some foreign exchange. Since 1954 the import purchasing power of export earnings have fallen by about 25%. The devaluation with respect to the U.S. $ plus the rise in British prices has taken off another 15% or so. The annual net incremental import purchasing power of sugar exports, 1954-68 could scarcely therefore have been much more than £2.5m. Thus an industry which earned over that period a total profit of £17m and invested probably £12m (excluding the cane farmer’s investments) produced a net addition to import purchasing power of only £2. 5m. Prima facie I should say from the view point of the social economy that this is a very bad record. We eagerly await the government’s comparison of the results of other strategies.

Finally I turn to employment and will make two brief points. First, the industry must calculate and let us know what are the total man-hours worked in the industry. The statement that 60,000 are employed is in an absolute and comparative sense misleading because many arc only part-time employees. Second there is a considerable amount of misinterpretation about the impact of labour cost and non-labour cost on the unit cost of production. The relative labour cost element has fallen drastically over the past several years and whilst there have been substantial increases in field mechanization the total result has been a sizeable increase in cane production cost. It would be a good thing if the industry and government resolved these two riddles:-

1. has not increasing capitalization been accompanied by rising unit cost even as the labour cost element has been falling?
2. Does not mechanization (which could reduce man hours in the field by 60% or more) considerably diminish the labour-absorptive argument for a sugar industry in a country with a large labour surplus?

Havelock Brewster teaches Economics at the University of the West Indies, Mona. He is co-author of the Dynamics of West lndian Economic Integration published by the U.W.I. and author of a New World Pamphlet on Sugar published in 1967.