How Trade Liberalization Affects a Sugar Dependent Community in Jamaica: Global Action, Local Impact 3030893588, 9783030893583

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How Trade Liberalization Affects a Sugar-Dependent Community in Jamaica Global Action, Local Impact Donovan Stanberry

How Trade Liberalization Affects a Sugar Dependent Community in Jamaica

Donovan Stanberry

How Trade Liberalization Affects a Sugar Dependent Community in Jamaica Global Action, Local Impact

Donovan Stanberry University of the West Indies Kingston, Jamaica

ISBN 978-3-030-89358-3 ISBN 978-3-030-89359-0 (eBook) https://doi.org/10.1007/978-3-030-89359-0 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: © Harvey Loake This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

This book is dedicated to the hardworking men and women in the sugar industry in Vere, past and present, who toiled so hard in this industry and received so little.

Acknowledgements

This book evolved from my doctoral dissertation, defended in December 2017, and which examined the social and environmental impacts of the implementation of Government’s Adaptation Strategy for the sugar industry on the Monymusk Sugar Dependent Area. Within this context, I have to first and foremost thank Professor Dale Webber for his expert, thoughtful and inspiring guidance as my Ph.D. supervisor. Thanks are also due to Dr. Derrick Deslandes, my second supervisor. I am also indebted to Dr. Kate Quinn and Dr. Mairi Black, both of the University College London, who provided me with valuable guidance, during my one semester stint at that institution in 2016. Professor Lloyd Waller’s support and assistance with methodological advice was also critical to completing my doctoral research. Numerous people in the sugar industry in Jamaica, as well as in critical Government institutions were extremely kind and supportive in providing me access to critical data for the project. These include Ambassador Derick Heaven, former Chairman of the Sugar Industry Authority, Mr. John Gayle, former Managing Director of SCJ Holdings Limited, Mrs. Keleen Young Grandison, former Head of the Sugar Transformation Unit in the Ministry of Agriculture and Fisheries, Mr. Karl James, former General Manager of the Jamaica Cane Product Sales, the late Mr. Evon Brown, former CEO of National Rums of Jamaica, Mr. Keith Scott, formerly of the Sugar Industry Authority, Mr. Peter Knight, CEO of the National Environmental and Planning Agency, Mr. George Callaghan,

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ACKNOWLEDGEMENTS

CEO of the Sugar Industry Authority, Mr. Milton Henry of the National Irrigation Authority and Mr. Delroy Armstrong of Pan Caribbean Sugar Company. In writing this book in the past six months it was critical to get beyond where my doctoral research ended in 2016/2017, to present an updated analysis of where the sugar industry in Jamaica is today. This aspect of the work could not be completed without a number of critical players in the industry granting me interviews and vital insights, as well as sharing their perspectives on a number of issues. I am eternally grateful to Mr. George Callaghan, former CEO of Sugar Industry Authority, Mr. Karl James, Mr. Robert Clarke, Managing Director of Worthy Park Estate, Mr. Andrew Hussey of Everglades Farms Limited and Mr. Richard Pandohie, CEO of Seprod Group for granting me interviews. I am also grateful to my life-long friend Kenrick Simon and his family, who provided me with a quiet space to write during my recent vacation. My wife, son, church family, Jonathan Archie and Junior Maragh from my office were of tremendous support to me throughout this project. Special thanks to Dr. Andrew Spencer, who held my hands and led me to the publishers. Above all, I thank Almighty God for the inspiration and strength he has given me to complete this project. Notwithstanding all the support I received, I take full responsibility for any shortcoming in the book.

Contents

1

Introduction Aims of the Book Organization of the Book

1 4 4

2

The Theoretical Framework Introduction The Plantation Economy Theory—Antecedents, Inspiration and Features Social/Cultural and Psychological Dimensions of Dependency Changing the Institutional Environment—Caribbean Perspectives Sustainable Development and the Rejection of the Productivism Model Conclusion References

9 9

3

The Origins and Development of a Plantation Economy Introduction The Origins of the Industry Fuelling the Growth and Preserving the Hegemony Challenges to King Sugar’s Hegemony The Institutionalization of a Preferential Trade Regime

13 19 22 29 34 35 41 41 42 45 49 52

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x

4

5

6

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CONTENTS

Conclusion References

57 58

The Sugar Industry Post-Independence Introduction The Facade of Prosperity in the 1960s Tate and Lyle Steps Out, Government Steps In: The Cooperative Experiment of the 1970s Restructuring in the 1980s to the 1994 Divestment Conclusion References

61 61 62

The Avalanche of Trade Liberalization Since the 1990s Introduction From London to Brussels: How the Preferential Regime Was Entrenched in the EU The Unintended Consequences of the Regime How Trade Liberalization and the WTO Dealt the Fatal Blow Conclusion References

83 83

The Response Introduction The Prognosis of the Pundits Spectrum of Responses Across the ACP St. Kitts and Nevis and Trinidad and Tobago Belize and Mauritius Responses and Positions of Varying Interests in the Jamaican Sugar Industry Jamaica Government’s Response: The Jamaica Country Strategy (JCS) The Jamaica Country Strategy 1 The Jamaica Country Strategy II, 2006–2020 Conclusion References Conditions of the Monymusk Sugar Dependent Area Before the JCS Introduction Characterization of Jamaica’s Sugar Parishes

65 72 79 80

85 89 93 98 99 101 101 103 107 108 110 114 117 119 124 126 127 131 131 134

CONTENTS

Social Conditions in the Monymusk, Frome and Bernard Lodge SDA and Justification for Selecting Monymusk SDA as the Subject of the Study The State of the Environment The Regulatory Framework for the Sugar Industry The General State of the Environment in Jamaica Before the Implementation of JCS, 2006–2015 Environmental State of the Sugar Industry 2008/2010 State of Environmental Compliance in the Sugar Industry Before the Implementation of JCS Water Quality in the Monymusk SDA Conclusion References 8

The Impact Introduction Accounting for the Interventions Social Impact Assessment Assessment of the Impact of the JCS on Grant Recipients General Profile of Grant Recipients Benefits Received from the STP and the Use of These Benefits Perception of Impact The Role of the Grants in Assisting Recipients to Meet Their Needs Other Indicators of Quality of Life Coping Strategies Assessment of Impact on Residents of the Monymusk Estate Perception of Change in Quality of Life Environmental Impact Assessment Overview Overall Compliance of the Monymusk Estate with the Action Plan Agreed with NEPA in 2011 General State of Environmental Management in the Sugar Industry Since the Implementation of the JCS Water Quality Impact Assessment Methodology

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137 143 144 146 150 154 158 162 163 165 165 169 170 174 174 175 177 178 181 183 184 186 189 189 190

192 195 195

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Comparison of 2016/17 Parameters with 2008/10 Parameters Performance of the Other Parameters at Alley Bridge Rio Minho River Longitudinal Comparisons The Case Study Report—Community’s Perspective on Privatization Purpose of the Case Study Profile of the Monymusk SDA Methodology Findings and Analysis Monymusk Estate—the Centre of the Monymusk SDA Socio-Economic Impact of the Privatization of the Monymusk Estate on the SDA Awareness of SADP Interventions Perspectives on Privatization Health and Environmental Impact Perspective on the Future Conclusion of the Case Study Conclusion References 9

The Current State of the Sugar Industry Introduction Developments in the Industry Post 2016/17 The Pan Caribbean Sugar Company—Monymusk and Frome Factories The Golden Grove Sugar Company—St. Thomas Everglades Farms Limited Appleton Estates Limited The Worthy Park Sugar Estate Government’s Role Dismantling of the Jamaica Cane Product Sales Limited Rightsizing the Sugar Industry Authority Supporting Production Creating an Enabling Policy Environment Managing Sugar Lands Post-Divestment Revival of Sugar Industry Possible? Critical Success Factors Conclusion References

196 199 200 203 203 203 206 207 207 208 211 213 216 217 218 219 222 225 225 228 229 235 238 243 246 249 249 252 254 255 258 259 264 266

CONTENTS

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Discussion and Policy Implications/Recommendations Discussion Policy Implications/Recommendations

Index

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267 267 276 281

Acronyms

ABA ACP AIJCFA ASR BOD BSI CABRI CAP CARICOM CARIFORUM CDL CET CML CMO COD DBJ ECLA EEC EPA EPI EU FMLCo FRI GATT GDP GSP

Anything But Arms African, Caribbean and Pacific All Island Jamaica Cane Framers Association American Sugar Refineries Biochemical Oxygen Demand Belizean Sugar Industries Collaborative Africa Budget Reform Initiative Common Agricultural Policy Caribbean Community CARICOM plus Dominican Republic Clarendon Distillers Limited Common External Tariff Caribbean Molasses Limited Common Market Organization Chemical Oxygen Demand Development Bank of Jamaica Economic Commission for Latin America European Economic Community Economic Partnership Agreement Environment Performance Index European Union Frome Monymusk Land Company Limited Factory Recovery Index General Agreement on Trade and Tariffs Gross Domestic Product Generalized System of Preferences xv

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ACRONYMS

HEART/NTA ISA JADEP JCPS JCS JLP JPSCo LDC MFN MSN MTSEPF NAFTA NIBJ NIS NRCA NRJ NSCL PATH PIOJ PNM PNP POP SAC SAC SADP SCJ SDA SDC SDT SEA SIA SIDS SIRI SLC SPA SPS STATIN STU SWCC TC:TS TDS

Human Employment and Resource Training/National Training Agency International Sugar Agreement Jamaica Drugs for the Elderly Programme Jamaica Cane Product Sales Limited Jamaica Country Strategy for the Adaptation of the Sugar Industry, 2006–2015 Jamaica Labour Party Jamaica Public Service Company Limited Least Developing Countries Most Favoured Nation Maximum Supply Needs Medium Term Socio-Economic Policy Framework North American Free Trade Area National Investment Bank of Jamaica National Insurance Scheme Natural Resources Conservation Authority National Rums of Jamaica Limited National Sugar Company Limited Programme of Advancement through Health and Education Planning Institute of Jamaica People’s National Movement People’s National Party Persistent Organic Pollutants Social Action Centre Sugar Association of the Caribbean Sugar Area Development Programme Sugar Company of Jamaica Limited Sugar Dependent Area Social Development Commission Special and Differential Treatment Strategic Environmental Assessment Sugar Industry Authority Small Island Developing States Sugar Industry Research Institute Survey of Living Conditions Spirit Pools Association Special Preferential Sugar Statistical Institute of Jamaica Sugar Transformation Unit Sugar Workers Cooperative Council Tonnes Cane to Tonnes Sugar Total Dissolved Solids

ACRONYMS

TRQ TSS UNC UNFCCC WISCo WMA WRA WTO

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Tariff Rate Quota Total Suspended Solids United National Congress United Nations Framework Convention on Climate Change West Indies Sugar Company Water Management Unit Water Resources Authority World Trade Organization

List of Figures

Fig. 7.1 Fig. 7.2 Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig.

8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8

Fig. 8.9 Fig. 8.10 Fig. 8.11 Fig. 8.12 Fig. 8.13

Jamaica—Watershed Management Units Ranked by Level of Degradation (Source NEPA) Water quality sampling sites used by NEPA 2008/2010 and 2016/2017 Clarendon, Jamaica Type of assistance received Awareness of programmes offered by the STP Perception of current quality of life, May 2016 Assistance and ability to support one’s self Assistance and the ability to take care of one’s family Types of access to water by grant recipients Types of bathroom facility used by grant recipients Educational profile of residents of Monymusk Estate Housing, 2016 Perception of quality of life by residents of estate housing 2016 Type of bathroom facility used by residents of estate housing, 2016 Land tenure of residents of estate housing, 2016 EC, TDS, Na, and Cl levels at Alley Bridge, 2016–2017 Concentration of manganese at various sample points 2016–2017

160 161 175 177 178 179 179 182 182 185 187 187 188 200 201

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List of Tables

Table 5.1 Table 7.1 Table 7.2 Table 7.3 Table 8.1 Table 8.2 Table 8.3 Table 8.4 Table 8.5

ACP/EU Sugar Protocol allocation Socio-economic Profile of Sugar Dependent Parishes, 2008 Social Profile of Bernard Lodge, Monymusk, and Frome Sugar Estates 2010 Environmental Breaches at the Monymusk Factory and Required Corrective Actions, 2010 Social interventions undertaken under the adaptation strategy (JCS), 2007–2016 Methods used to test water samples, May 2016 to March 2017 Social indicators for Lionel Town and Milk River Development Areas Focus groups composition Production of sugar and cane milled, Monymusk Estate, 2010–2016

87 135 140 156 171 196 205 207 215

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CHAPTER 1

Introduction

I spent most of the first 18 years of my life growing up in Race Course, Vere, Clarendon, in the heart of the cane growing belt. My own life has been profoundly influenced and shaped by the sugar industry in that part of Jamaica. I have had a life-long fascination with sugar, from the smell of the sugar in the boilers at Monymusk Factory, which pervades the atmosphere during crop time, to the frightening scene of a cane field burning in preparation for harvest, to the overloaded trucks and cane carts on the roads heading for the factory, to the cane cutters fully covered by the black soot of the burnt cane and armed with a sharp machete, to the repugnant odour of the dunder running in gullies as waste from the distillery to the Rio Minho River and the Caribbean Sea. But more than these physical images, as I grew up I always noticed the predominance of poverty in Vere, especially during the out of crop season and how the town of Lionel Town became alive with activities on pay days and the general bustle of economic and social activities during ‘crop’, as against out of crop. For the people of Vere, Clarendon, time is divided in ‘crop’, during the six months cane harvesting season between December and late May, and the rest of the year, we referred to as out of crop. As a youngster, who at one point lived on a cane farm called Paradise, owned by Waterwell Limited, I noted the marked stratification in terms

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_1

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of which type of worker occupied which houses. I saw also how this stratification defined social relations in the wider community, beyond the farm. Managers, technical workers and ‘office workers’ lived a totally different experience from those who cut cane and worked in the fields and on the factory floor. I saw the plethora of industrial actions in the form of strikes in the sector, and from very early perceived the antagonism and tensions between workers and managers. For instance, as a child I witnessed firsthand uninterrupted, colourful and somewhat poetic flow of expletives from the mouths of workers who turned up for their wages and found their wages were short because the supervisor (headman), did not measure their work correctly. From very early the nexus between the industry and the trade unions was very clear to me, and I understood the connection between the trade unions and the politics. Socially, it always struck me that Vere probably had a disproportionate share of dysfunctional families—relatively few married couples, single parents households, a number of children raised by grandmothers, while mothers migrate to Kingston to ‘hussle’ or were overseas. Only in Vere perhaps one would hear people being referred to as ‘follow lines’, referring to men who left other Parishes in Jamaica, descending on Vere to work in the then burgeoning sugar industry in the post war period, never returning to their families. Why did so few people own their houses? In the 1970s I saw ‘wattle and daub’ houses with dirt floors. How come you could buy rum in bulk at multiple yards within a small communities and no one denounced this as stealing from the distillery? There was a significant prevalence of spousal abuse in the 1970s, which society is now frowning on. Beating of children in school, because they were ‘dunce’, was common place. We now call it corporal punishment, and rightly frown on this practice. Then Principal and teachers were acclaimed for dispensing these punishments. The industry for me presented some very interesting contradictions. There was hardly a household in Vere that did not have at least one member working in the industry. Shops, schools, whole communities depended on the industry for sustenance, yet any child with a modicum of ambition wanted to have nothing to do with the industry in terms of career choices. The affluence of the owners and managers of the farms and factories existed alongside the abject poverty of the masses who worked in the fields and factory. Politicians would bemoan and despise the association of the industry with poverty and slavery, yet would do everything in their power to prop up the industry, even when it was obviously failing.

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For all its contradictions, the industry holds for me cherished memories. Pay days were carnival-like. In the 1970s to early 1980s, payment of wages was done by cash every Thursday at the Waterwell Farm. From mid-morning the entire pay area was totally transformed with sellers and purveyors descending on Waterwell from as far as Kingston with their wares, enticing the poor workers to spend with meagre wages on all kinds of products. Local shop keepers and others who offered credit to the workers will also be there waiting to be repaid. Astute wives and ‘baby mothers’ would also be there to get their share of their spouses’ wages, before he turns to the bar to consume his entire wages on alcohol. Particularly interesting was when ‘back money’, representing retroactive wages or bonus was being paid. On that day every young child could be confident that they would get a new shirt, pants or pair of shoes. And of course pots were turned down and kitchen closed in preference for Miss Lou’s fried chicken or Mr. Campbell’s jerk pork! Bathing in the network of canals in the evenings, was an adventure, and no one questioned why was there a lack of running water in bath rooms in the house. In high school, the cane fields was a reliable supplementary source of food, no worries about diabetes. Everyone made ample use of the sporting facilities provided by the Estate to the entire community, and no one asked why it was the Estate providing and maintaining these facilities and not the Government. We did not want to grow up and work in the industry, but we certainly had no difficulty availing ourselves of all the benefits that the industry provided. Such was my attitude to the industry until I started tertiary studies. It was during my years in University studying Agricultural Economics, that I understood the critical role that the EU market played in the survival of the industry, in terms of providing a preferential market with a generous quota and prices up to three times the world market price. At that point I began to pose some new questions. What have we done with the massive windfall we received from these highly concessionary prices in the EU? Why with all of these high export prices, the sugar belt of Vere was among the poorest of places in Jamaica? Further, why was Vere represented as a political constituency by 2 Prime Ministers of independent Jamaica, yet that area has always been defined by poverty. Why has the economy of Vere never diversified, and sugar for so many years remained the biggest, indeed the only game in town? As a student in Europe in the late 1980s to early 1990s, I heard persistent

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talk about impending changes to the EU sugar regime, yet our Government never seemed perturbed? If the Jamaican sugar industry has been in such favourable position in terms of a protected export market, paying guaranteed high prices, why was there not the investment in the industry to make operations more efficient and the industry more competitive? Why was there such a marked difference in efficiency indicators between privately owned and government owned factories? Overall, why has the industry been declining for years despite these favourable market conditions? I observed the gradual decline of the industry and the impact this was having on Vere. The two commercial banks in Lionel Town closed. Alley market which was the centre of commerce in Vere on Fridays and Saturdays gradually disappeared in the early 1990s, and thereafter Vere became a shadow of its former self. I pondered these things. It was fortuitous that I came to be in charge of the Ministry with responsibility for the sugar industry when I became Permanent Secretary in the Ministry of Agriculture in 2006, around the same time that the EU reforms of its sugar regime was unfolding, and our preferential market was eroding. From this position I had a better insight as to how these marketing arrangements unfolded, and began to understand more deeply how the fortunes of my little community in Vere was inextricably tied to what happens in Brussels.

Aims of the Book It was the sum total of the above lived experiences that inspired me to examine in a formal way how the industry came to be what it had become. The intent was to trace the factors and events that shaped the industry since the times of European settlement in the Americas, to get a better understanding of how the community of Vere became so dependent on the Estate, why has diversification eluded us and to examine how the latest attempt to restructure the industry and address longstanding social and environmental neglect would impact Vere.

Organization of the Book All the questions and observations I mused about were in fact related to features of the plantation economy—monoculture, dependency and poverty, dysfunctional families, lack of diversification and deep social stratification. Turns out that most developing countries, where sugar is the

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dominant agricultural enterprise exhibit similar features. It is therefore important from the very outset to establish the theoretical frame within which the book is embedded, that is to establish the context within which the sugar industry developed. What system appropriately describes the features of the sugar industry and explain the factors and circumstance which explain its emergence and development. In order words, what constitutes the political economy of the industry? The Plantation Economic Model, which was developed at the University of the West Indies in the late 1960s to early 1970s, is without a doubt the theoretical frame that best describes the development of Jamaica’ sugar industry. Chapter 2 therefore explores Lloyd Best’s plantation economic model, tracing its antecedence back to the dependency theories originating in Latin America, as well as looking on critics of the model. While the model appropriately describes the plantation economy, it is short on prescriptions. Hence, Chapter 2 further explores the contribution of other Caribbean scholars, such as George Beckford and C.Y. Thomas, who offered concrete solutions in terms of building a new society, with people at the centre of all development initiatives. In building this new society, it is appropriate that all human needs be considered. Within this context, Chapter 2 also explores the concept of sustainable development and the building of a model of agricultural development that is people centered, sustainable and rejects the productivism model of expansion and development. Chapter 3 traces the development of sugar industry in Jamaica, starting with the long journey of the sugar cane from its origins in the South Pacific, to India, to the Middle East, to the Mediterranean and the Spanish Canary Islands, to its introduction to Jamaica by Columbus. The chapter further examines the factors responsible for the rapid growth of the industry in Jamaica in the second half of the seventeenth century, as well as the many challenges the industry weathered over time, to be firmly established and dominating Jamaica’s economic landscape for well over 300 years. Chapter 4 looks at the golden years of the sugar industry, coinciding with the early years of Jamaica’s independence, as well as the factors responsible for the rapid expansion of the industry during this period and the emerging and ominous signs of declining productivity in the 1960s. The chapter goes on to describe and analyze Governments first two interventions in the industry—the cooperativization experiment of the 1970s and the first privatization in 1994. This discourse provides

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some important insights on institutional framework of industry, as well as Governments ever expending involvement in the industry in the 1970s, to the point that by 1978 it controlled and dominated the industry through ownership of nearly 70% of the industry’s productive assets. The description of the 1994 privatization, is perhaps the only scholarly account of this intervention by Government. The longevity of Jamaica’s sugar industry, despite all the challenges of liberalization in Britain in the mid-nineteenth century, competition from beet sugar, competition from larger players in Cuba and the Dominican Republic, under investment and low productivity, is attributable to the long existence of a protected export mark in the EU. Chapter 5 traces the genesis of that protectionism, and how toward the end of the twentieth century the forces of liberalization had been chipping at that fortress relentlessly, until its walls were swept away in the early twenty-first century, with Brazil, Thailand and Australia successfully challenging the legality of EU’s sugar regime in the WTO. In Chapter 6, the response of the EU itself to the challenge of its sugar regime is analyzed, as well as the prognosis of the many pundits, in terms of how Jamaica and other ACP exporting countries would fare in the face of the erosion of preferential marketing arrangements under the Sugar Protocol of the LOME Convention. The chapter further examines how selected ACP countries responded, as well as different interests in the Jamaican sugar industry. Finally, the chapter examines in some detail the response of the Government of Jamaica, in respect to its Adaptation Strategy. This book is really about how the implementation of the Governments Adaptation Strategy impacted the Monymusk sugar dependent area in social and environmental terms. Any impact analysis must begin with a description of the state of affairs at the baseline period. Chapter 7 therefore looks at the social and environment conditions in the Monymusk area in the 2008/2010 period, before the Government’s Adaptation Strategy began rolling out in earnest. Data from surveys of redundant workers from the Monymusk Estate and residents living on the estate, bolstered with official statistics, data and reports, were used in setting the baseline. Chapter 8 describes the menu of programmes actually implemented by the Government of Jamaica, pursuant to its Adaptation Strategy. Using data from surveys of the same two populations, the impact of government’s intervention is discussed based on respondents’ perception of how their well-being has changed and the contribution of those interventions to the perceived change in their well-being. Other critical indicators of

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quality of life were also garnered from the survey to measure against baseline measures of these indicators for comparison. This chapter also presents the report of a case study conducted in the Monymusk area to get a deeper insight into people’s views and perspectives on privatization and how their lives had changed. On the environmental side, reports from the environmental agency are analyzed to determine the state of the environment post divestment and the extent to which new owners of the divested estates were in compliance with environmental regulations. Results from water quality tests from the Rio Minho River are also examined to provide commentary on the environmental management of the Monymusk factory in relation to the quality of effluent it discharged in the river. The empirical work for the doctoral thesis, from which this book emerged, was completed in the 2016/2017 period. The utility of the book would have been in question if it didn’t describe and analyze the current state of the sugar industry in 2021, and provide some comment/analysis on the success or otherwise of the Government’s latest efforts to restructure the sugar industry through privitization and to address the longstanding social and environmental issues dogging sugar dependent communities. Thanks to expert interviews of key operatives in the industry, the Author’s own keen and ongoing observation of happenings in the industry, as well as media reports and studies on the Caribbean sugar industry, Chapter 9 describes the current state of the industry and offers some perspectives on the failings of the adaptation strategy, and critical success factors for any revival of the industry. The last chapter provides some concluding remarks and policy recommendations.

CHAPTER 2

The Theoretical Framework

Introduction The announcement by the European Union in 2005 of sweeping changes to its sugar regime, including a reduction in the guaranteed price paid for ACP imports, in response to the successful challenge in the WTO of this regime by Australia, Brazil and Thailand, was like a death knell to both Government and interests in the sugar industry in Jamaica. The sugar industry at the time, despite its decline since the heydays of the 1960s, still commanded approximately 15% of all active lands in farming, occupied the best, most fertile lands, constituted the bulk of all agricultural exports and employed over 50,000 people directly and indirectly. The concessionary marketing conditions enjoyed by Jamaica in the EU since the installation of the Sugar Protocol of the LOME Convention between the EU and the ACP, served the sugar industry well, with prices consistently above world market prices and a guaranteed yearly quota. Before the Sugar Protocol and since the turn of the nineteenth century, the industry has been bred on an almost continuous diet of remunerative prices in the protected British market. This protection discouraged innovation and efficiency improvements, and its sudden withdrawal sent shock waves throughout the sugar fraternity in Jamaica.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_2

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The analysis of the impact of this landmark decision on the sugar industry in Jamaica, how the Government responded to restructure the industry and address longstanding social neglect of sugar dependent communities through the promulgation of its Sugar Adaptation Strategy, and the impact of this strategy on these communities, cannot be properly engaged without a deeper understanding of how things came to be what they were in 2005. How is it that an industry that has commanded so much support and protection from Government throughout its history, remained so inefficient and uncompetitive? How is it that the wealth generated by this industry over time has only enriched a narrow band of people? Why has the industry dominated the economy for so long, yet those who work in it and the communities in which the industry is situated are among the poorest? Why has there not been sufficient economic diversification in the sugar dependent areas? A careful study of the political economy of sugar shows a pattern of poverty and dependency among the workers and rural communities in which the industry is situated in the global South. It also shows a pattern of significant protection of local markets to favour the local industry, with the gains going to a small set of people. It shows deep seated rural poverty in cane growing areas in the South, while refiners in the North are flourishing. It shows a pattern of environmental neglect in the industry and the communities they operate in. These questions occupy the mind of Ben Richardson, who has devoted considerable time and scholarship examining the political economy of sugar. Richardson (2009) for instance, questions why the EU reforms undertaken in the name of free trade, caused the poor people of the ACP sugar exporting countries to suffer most, contrary to the much touted virtues of free trade? Richardson went on to explore what he dubbed “the protectionist paradox”, that is, why the countries of the temperate North provide significant protection and support to their beet producers, when sugar constitutes such a minute fraction of their GDP, and when such measures restrict free trade and cause their consumers to pay more for the commodity? Richardson (2009) explored another paradox—“the production paradox”, that is, why the global South continues to position the sugar industry as key to rural development, when it engenders such poverty? Quoting from David Ransom (2003), editor of The New Internationalist, Richardson (2009, p. 4) observes:

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Sugar has never enriched anyone but slave traders, local landlords, industrial farmers, sugar barons, speculators, food corporations, PR consultants and professional politicians. No one has ever traded their way out of poverty with sugar, and there’s no reason to suppose they ever will.

Against the background of this ‘production paradox’, what is the point of the Adaptation Strategy? Should the Government just close down the sugar industry, given the painful history of slavery, poverty and inefficiency? Surely, even in the heydays of preferential access to the EU market, Jamaica was exporting all the sugar it produced and importing cheaper sugar from Central and South America for local consumption. The truth is, sugar is an extremely complex phenomenon, grown both in the North and the South, and impacted by a multiplicity of factors, both internal and external. It is one of the most traded commodities in the world, the subject of considerable support in the form of tariff protection and subsidies. It has a history of slavery and associated with brutality and inefficiency in Jamaica, yet it is the first vertically integrated industry in the country. It perpetuates poverty, but at the same time thousands in sugar dependent communities depend on the industry for livelihood and such essential services as schools, health clinics, sporting facilities, water and other amenities. According to Girvan and Girvan (1973), the post-war period, which coincided with the birth of the independence movement in Jamaica, ushered in a search for a new politics and economics of development to bring about the social and economic transformation commensurate with the hopes, dreams and promise of independence. Doubtless this search was inspired by the contradictions of this dominant industry, a yearning to understand the poverty that the plantation system engendered, why its gains were not shared equally, why it dominated the entire economic landscape and why it’s most robust growth in that post-war period coincided with the appalling levels of poverty that triggered the 1938 riots. The search was for a model of development to transform the economy and put people at the centre of development concerns. The promulgation of the “Strategy for Adaptation of the Sugar Industry” in 2005, must be seen within the context of the new development paradigms emerging in the post-war period, the search for solutions to effect economic and social transformation in an industry nurtured and

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developed by Jamaica’s former colonial powers to satisfy the economic interests of Britain and not primarily the development of indigenous industries and the transformation of sugar-dependent communities. The Adaptation Strategy seeks to break the mould of dependency on preferential markets, restructure an inefficient industry, drive diversification, not only in the sugar industry but in sugar dependent communities, effect social transformation of sugar dependent areas (SDAs), and for the first time, promote environmental sustainability of SDAs. All the above ideals challenge existing neo-liberal models of economic development with their emphasis on the market, privatization, trade liberalization, deregulation, and a minimalist role for the government. The Adaptation Strategy is an attempt to reverse dependency and underdevelopment—directly challenging the social and economic order, which has survived and transcended every form of socio-political organization in Jamaica—slavery, colonization, and now Independence. But the Adaptation Strategy with people and social and community transformation at its centre, is not only seeking to break the cycle of dependence and under-development, but must do so within a sustainable development framework, which simultaneously seeks to achieve economic diversification, strengthen social resilience, and resulting in environmental sustainability of SDAs. Neither the industrialization by invitation model of the 1960s, the social experiment of the 1970s of cooperatization, nor the neo-liberal approaches of privatization of the 1980s and 1990s has seen any meaningful transformation of the sugar industry and SDAs. None of government’s interventions since independence targeted social transformation and environmental sustainability. This chapter, therefore, seeks to explore relevant literature on Caribbean economic theories of dependency, as well as sustainable development, in order to establish the context within which this transformation strategy must be executed, and hopefully through the empirical study of the impact of its implementation, which this book is about, establish the extent to which this strategy breaks the dependency and under-development in SDAs and add valuable lessons to the literature.

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The Plantation Economy Theory---Antecedents, Inspiration and Features Girvan and Girvan (1973) pointed to Raul Prebisch and Arthur Lewis as pioneers in promoting new models of economic development for Latin America and the Caribbean respectively, on the basis of industrialization. Prebisch (1949) bemoaned the historical place of Latin America in the world economy. For Prebisch, the economic crisis produced by two world wars, as well as advances in technology provided the opportunity for Latin American countries to redefine their role in the international division of labour, shifting from primary producers to manufacturing of goods previously imported from the North. Lewis (1950) at the same time saw industrialization as the means of absorbing an abundant labour force, created by overpopulation. This overpopulation rendered West Indian labour comparatively cheaper than labour in developed, industrialized countries, creating for the West Indies a comparative advantage favourable for the development of a model of substitutive industrialization. What was common to both Prebisch’s and Lewis’ model of industrialization was active involvement of government in incentivizing industrialization by private investments, through tax breaks and high protective tariffs. Sudama (1979, p. 68) asserted that the industrialization by invitation model coincided with the “coming of age of multilateral corporations”, which undoubtedly responded to the incentives offered by Caribbean governments to induce industrialization. The thinking was that industrialization in turn would not only boost economic growth but internalize productivity growth in the economy. In reality, the so-called industrialization by invitation model did produce in Jamaica, high levels of economic growth in the 1960s, which did not translate in social and economic development. Hence Manley (1974) pointed to the coexistence of high growth rates with worsening poverty and unemployment. In fact, data from the Statistical Institute of Jamaica (STATIN), point to average GDP growth rate of approximately 6% per annum between 1962 and 1972, with the doubling of unemployment from 12 to 24% in the same period. The development of dependency economic theory in the Caribbean, particularly the plantation economy model, arose out of the failure of the industrialization by invitation model of Lewis to stimulate economic development in the Caribbean, and represents the continuation of the

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search for theories of economic development, which according to Girvan (2009, p. 1) “asserted the specificity of the Caribbean experience”, and attempted to describe the political economy of the Caribbean through the eyes of Caribbean scholars, independent of classical western economic theories. Benn (1974, p. 249) ascribed the authorship of this school of political economy to the “Caribbean New Group”, emerging from the University of the West Indies and involving Lloyd Best, George Beckford, Norman Girvan, C.Y. Thomas, H.R. Brewster, and Owen Jefferson, in the late 1960s to early 1970s. Although Best and Canadian economist Kari Levitt, were the pioneers of this dependency school, it is widely acknowledged that dependency theories in Latin America before the emergence of the Caribbean New Group was championed by ECLA economists. Girvan and Girvan (1973) identified Sunkel as one of the earlier proponents of economic dependence of Latin America. Sunkel (1969, p. 31) established four “mechanisms of dependence” as stagnation of agriculture, high export concentration, high foreign exchange content of industrialization, and growing fiscal deficit. Other notable Latin American economists who contributed to the dependency economic development model include Furtado (1965), who examined the plantation model in Brazil. According to Cumper (1974), much of the elements of Best’s work on the plantation economy was covered by other Latin American economists such as Stewart, Greaves, and Padilla, whose works featured prominently in the Pan American Union Report (1959) of a seminar held in Puerto Rico in 1957 on plantation systems in the new world. Padilla’s (1959, p. 23) contribution related to the sociological perspective, in which he made a direct connection between the plantation economy and the emergence of a “class structured economy whose major economic institutions are geared to large scale production and marketing of an export crop for profit, and whose population depends directly or indirectly on the plantation for its livelihood and the realisation of its economic wants”. Williams’ (1944) analysis of the structural links between the metropolitan economy in Britain and that of West Indian colonies also provides a theoretical foundation for Best’s model of plantation economy. Although inspired by a number of economists from the ECLA School, as well as other sociologists and economists from the region, Lloyd Best has been universally acknowledged as the author of the theory of the pure plantation economy model, as elaborated in his work “Outlines of a Model of Pure Plantation Economy”, published in the Social and Economic

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Studies Series in 1968 by the Sir Arthur Lewis Institute of Social and Economic Studies. According to Girvan (2009, p. 2), the development and articulation of this model was “one of the earliest attempts to understand the Caribbean economy within its own terms”, and “provides an historical perspective on the relationships of Caribbean countries to globalisation.” Best (1968, p. 283) saw the plantation economy as “externallypropelled” with a structured relationship between a metropolitan economy and hinterland economy, the former referring to Britain and the latter to the West Indian colonies. This relationship between the two is mercantilist. The metropolitan economy makes all the decisions in the hinterland, and the hinterland is restricted in terms of external relations. In other words, the hinterland relates exclusively with the metropolitan economy in terms of trade and financing. There is a distinct division of labour between hinterland and the metropole, with the hinterland restricted to primary production, and the metropole to value added activities, expropriating the lion’s share of the value created along the value chain. Best (1968) further distinguished between hinterlands of conquest, hinterlands of settlement, and hinterlands of exploitation. In hinterlands of conquest, the objective of the metropole is to plunder resources from rival metropolitan powers, with the metropole providing military and administrative resources to enable this to happen, and the spoils being shared between those participating in the plunder and the state. In hinterlands of settlements, the objective is to create “a new metropole” (1968, p. 286) in the hinterland, inhabited and controlled by members of the metropolitan economy. Hinterlands of exploitation lie somewhere between the hinterlands conquest and settlement. Here, the objective of the metropole is production for trading, with that production entirely orientated towards export to the metropole, and not for consumption in the hinterland. This production is supported by labour brought in from other countries and capital from the metropole. Best (1968, p. 287) pointed to the need for “total economic institutions so as to encompass the entire existence of the labour force.” Best’s theory of plantation economy is essentially dealing with hinterlands of exploitation. According to Best (1968), the Crown in the metropole is not an active participant in the production process, but rather sets the legislative and regulatory framework. The joint stock company, resident in the metropole, is the principal unit of enterprise, and is responsible for mobilizing capital for the production process in the hinterland, as well as receiving the

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primary product produced in the hinterland for processing and sale in the metropole, and the expropriation of all the revenues arising from this enterprise. In the hinterland, the plantation is identified by Best (1968, p. 288) as the “typical unit of production”, which “produces a single crop”. The plantation in turn constitutes “a self-contained, selfsufficient, total institution, encompassing even its own civil government”. Best further asserted that the pure plantation model is only modified “by the existence of a few nomadic native survivors, runaway slaves, and small settlers from the metropolis who resist the hegemony of the plantation” (Best, 1968, p. 288). The plantation system therefore dominates all aspects of life in the society, underpinned and reinforced by the local government, which derives its power from the Crown in the metropolis. During its ‘pure’ phase, the plantation economy flourished principally on account of the mercantilist system instituted by the crown and the growing demand for sugar in Britain (Mintz, 1985). The forces of liberalization and capitalism in Britain challenged the dominance of the system, culminating with the abolition of slavery, abandonment of protectionist policies and competition from European beet sugar. These challenges to the plantation economy and the subsequent rise of the peasantry triggered the modification of the pure plantation model to a phase Best characterized as the pure plantation economy modified, which subsisted from 1838 to 1938 (Best, 1968). According to Best (1968, p. 294), hinterlands of exploitation experienced the greatest “difficulty in adjusting to the breakdown of the mercantile order because, here, the mercantile system left behind its most elaborate productive apparatus”. Best (1968, p. 294) further asserted that “the legacy of institutions, structures, and behaviour patterns of the plantation system are so deeply entrenched that adjustment tends to take place as an adaptation within the bounds of the established framework”. The events of Emancipation and the rise of the peasantry therefore, though modifying the pure plantation economy did not provide any significant break from the dominance and dependence engendered by the sugar industry. Hall (1959) described the decline in sugar production in Jamaica after the Sugar Equalization Act of 1846, which reduced the preferential treatment of imperial sugar in the British market, as well as the simultaneous exodus of ex-slaves from the plantation and their strenuous efforts at establishing small plots on hillsides cultivating provisions, as well as renting plots from planters. The rise of the peasantry and the

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ex-slaves’ insistence on moving from the plantation created severe labour shortages for planters and compounded the problems faced by the sugar industry in terms of reduced prices in Britain. Hall (1959) conceded to adjustments in the Jamaican economy arising from emancipation, which were not limited to the rise of the peasantry, but internal migration to Kingston and development of internal trading. Benn (1974), Best (1968) and Girvan and Girvan (1973) pointed to the large-scale importation of indentured labour to alleviate the shortage of labour created by the mass exodus from the plantation, particularly in what Best (1968) described as “mixed plantation economies”, such as Jamaica, Guyana, and Trinidad. Despite the above noted adjustments, however, both Hall (1959) and Girvan and Girvan (1973, p. 17) emphasized the continued dominance of the sugar industry and the lack of “genuine economic transformation”, since the government which served the interests of the planter class systematically frustrated “the development of domestic agriculture and craft making industry”. All public policy was geared to preserving the plantation economy, which still controlled the best lands. Furthermore, the legacy of foreign taste, bequeathed by the pure plantation economy, continued to limit the expansion of domestic agriculture. Although the Royal Commission of Enquiry into the sugar industry of the West Indies 1897 made recommendations for the provision of lands for settlement of West Indian labourers and for the expansion of the peasantry (Richardson, 2007, p. 18), there was a caveat to this recommendation that this expansion of the peasantry should not lead to “the abandonment of ongoing sugar estates by their workers”. The chairman of the Commission, according to Richardson, favoured the imposition by Britain of countervailing duties on imported beet sugar from Europe into Britain, which was the subject of significant subsidy and against which West Indian sugar could not compete. While conceding, therefore, to the need to expand the peasantry, the Commission was keen on preserving the dominance of the plantation. While the recommendation of the Royal Commission of Enquiry did not immediately reverse the fortunes of sugar in the West Indies, the onset of World War I (1914–1918) gave the sugar industry a reprieve, brought about by the destruction of a significant amount of beet sugar production in Europe and the general disruption of the sugar trade, resulting in scarcity of beet sugar. The sugar industry in Jamaica responded favourably to these developments, with sugar production increasing from 5000 tonnes in 1913 to some 32,000 tonnes in 1917 (Harrison, 2001, p. 122).

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By 1938, which Best (1968) associated with the beginning of a further adjustment to the pure plantation economy (pure plantation economy further modified), agricultural production diversified with banana production for export emerging as a challenge to sugar’s dominance. In the post 1938 period, tourism and bauxite mining and light manufacturing also emerged as important industries. Girvan and Girvan (1973, p. 18) asserted that this level of diversification was driven by the activities of multinational corporations, which “replicates many of the features of the joint stock company”, which was the principal unit of enterprise in the pure plantation period. According to Girvan and Girvan (1973, p. 18) by combining “organization, capital, technology, and entrepreneurship in a single unit”, the investments of multinational corporations in these new enterprises reinforced the control of the Caribbean by overseas economy and reinforced the position of the Caribbean as “the locus of raw material…, the locus of consumption of services…, and the locus of assembly of finished goods.” Far from relinquishing its dominant position in the economy, despite the emergence of these new industries, and thanks to the Commonwealth Sugar Agreement of 1953, which saw the institution of a system of quotas and guaranteed remunerative prices to Commonwealth sugar entering Britain, sugar production based on Sugar Industry Authority (SIA) statistics, rose continuously from 27,580 tonnes in 1950 to its peak of 514,000 tonnes in 1965. Clearly, the emergence of new industries and the diversification of agriculture in the period post 1938, not only failed to diminish the pre-eminent position of sugar, but failed to effect social and economic transformation. The rapid expansion of sugar production during this period and the general impact of the great depression of 1929 significantly impacted living conditions in Jamaica, as well as labour relations, resulting in a spate of labour and social unrest in the British Caribbean and the birth of the Independence movement. Bolland (1995, p. 42) in examining social and labour conditions in the British West Indies within the plantation economy modified period, contended that little had changed in nearly 100 years and that the small planter class still controlled majority of land holdings. In the case of Jamaica, Mandle (1989, p. 229) stated that the plantation so significantly dominated the economy up to the 1930s, that per capita output was only marginally higher in the 1930s than during slavery in the nineteenth century. Hart (2002) pointed to the deteriorating social conditions in the British West Indies, including high

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unemployment, low wages, and poor living conditions as the common cause for spontaneous labour uprisings in the British West Indies, which prompted the British Government to establish the Moyne Commission of Enquiry of 1938. The riots of 1938 in Jamaica marked the beginning of internal self-government in 1944 and eventually Independence in 1962.

Social/Cultural and Psychological Dimensions of Dependency Although Lloyd Best’s plantation economy model represents a framework which can be used to describe and analyse the economic relationship between the metropole and the hinterland, in respect to a range of economic activities, the focus was essentially on sugar, and limited to economic relationships. It was George Beckford, who building on the theoretical foundation of Best’s plantation economy theory, extended the analysis from the slave plantation system surrounding sugar, to what Benn (1974, p. 254) referred to as “a general theory which seeks to explain the dynamics of economic under-development in the Caribbean and other so-called plantation economies in the Third World”. Beckford further expanded the analysis from the immediate plantation, to look at the wider economy and society. George Beckford in his seminal 1972 work “Persistent Poverty” outlined as his objective the “interpretation and analysis of the phenomenon of persistent under-development in plantation economies of the world”, particularly concerned “with the welfare of people living in plantation societies—why they are poor and what can we do about it”. Beckford therefore accepted the diagnosis and description of the plantation economy articulated by Best (1968). In fact, Beckford (1972, p. xix) clearly stated that “my whole view of plantation economy and society has been profoundly influenced by Lloyd Best”. Whereas Best’s focus was to describe the economic relations between metropolitan economies of the North and the hinterlands, Beckford believed that the whole plantation economy created an “institutional environment” that dominated and defined every facet of life in the plantation economy—economic, social, political, and environmental. According to Beckford (1972, p. xxv), “social, cultural, political, psychological, and other non-economic variables influence individuals and groups in every society, and these factors are important in determining the pattern of development and underdevelopment”. Consistent with this broad

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perspective on development, Beckford was not only inspired by Lloyd Best’s economic analysis of the plantation economy, but by the social and anthropological theoretical formulations of Sydney Mintz, Edgar Thompson, and Charles Wagley. Mintz (1959) demonstrated how sugar almost single-handedly shaped the demographics of the Americas, citing the Atlantic slave trade that moved Africans from Africa to plantations in the New World, and subsequently the mass movement of East Indians to fill the labour void after emancipation. Sugar asserted Mintz (1959, p. 49), “has been one of the massive demographic forces in world history”. The rapid growth and expansion of the sugar industry globally, which coincided with European conquest of the Americas, was facilitated by a system of forced labour, which completely degraded the human person and perpetuated untold atrocities against humanity. According to Polopolus (2002), the geographical shift in the centre of production between 1440 and 1680 from the Mediterranean to the New World was driven by the economic gains to be had from “low cost, slave run sugar plantations…in tropical America.” Slave labour not only made a significant contribution to the wealth of Britain according to Marx (1968), but was critical to the rapid expansion of sugar cane production in the New World. Mintz (1971) pointed out that in a mere 50 years the native Indians were completely exterminated. According to Mintz (1971, p. 23), “this scourging of the human landscape enabled the Europeans to set the terms of their future colonization, as if the Antilles were empty lands.” The British therefore perfected the transatlantic slave trade, described as the “greatest demographic phenomenon”, in order to facilitate what was referred to as “an agricultural design for the production of export commodity for foreign markets” (Mintz, 1971, p. 26) However, Mintz (1971, p. 26) further emphasized that the plantation system was more than just an economic enterprise, but “possessed an inner dynamic, that led to the creation of social and political relationships of a distinctive – and very rigid – sort.” Beckford (1972) referred to this “inner dynamic” as an “institutional environment” that pervades all aspects of society, to support the enterprise of producing sugar. Thompson (1957, p. iv) in his study of the plantation system in the American south asserted that “elements of the present problems of many inter-racial societies, … were set up in an older plantation order”. Significantly, Thompson (1957, p. 30) described the Caribbean as “the

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locus classicus of plantation societies”. Wagley (1957) identified plantation America as one of three “cultural spheres” dominant in the New World stretching from Brazil through the Guianas along the Caribbean coast, engulfing the Caribbean itself and the United States. According to Wagley (1957, p. 5), the common features of this spatial cultural sphere are “mono-crop cultivation under the plantation system, rigid class lines, multi-racial societies, weak community cohesion, small peasant properties involving subsistence cash crop production, and a matrifocal type family form”. Mintz (1971, p. 39) elaborated that “Caribbean communities are noteworthy for their relative lack of two of the most important bases of social assortments: community-based institutional nexuses (such as those provided by churches, schools, political affiliations, etc.), and kinshipgroup nexuses.” Patterson (1967) pointed further to the sociological impact of slavery—it effectively robbed slaves of personhood and citizenship and considered them properties of their masters. Patterson (1982) characterized this denial of personhood and citizenship as ‘social death’, and pointed to the need to re-create ex-slaves after freedom, as citizens and persons, legally and mentally. Harrison (2001) attributed this unfortunate state of affairs to the fact that “no effort was made to establish the basis of a civil society.” There was, therefore, very little investment in education, health, and other basic services required for the functioning of a normal society. By the same token, development of an indigenous economy whether in agriculture or industry was ignored. This of course was a deliberate strategy to reinforce the dependency of the colonies. Slaves were allowed to work provision grounds on Sundays to assist with their feeding, and this was, therefore, not a strategy to diversify agriculture or to direct the slaves into alternative enterprises. The marginalization of the ex-slaves and the systematic undermining of their efforts to establish an independent peasantry, as well as the disenchantment of ex-slaves with their living conditions and lack of access to land, led to the Morant Bay Rebellion of 1865 (Beckford, 1972). Although the British instituted crown colony government in response to the rebellion, little changed in the circumstances of the landless exslaves. Indeed, the West Indian Royal Commission of 1897 highlighted the appalling social conditions in rural Jamaica and called for land reform.

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Even with the rapid expansion of sugar cane production in Jamaica after the 1929 preferential market arrangements were instituted by Britain, the social conditions of sugar workers were not improved. By 1938 riots broke out in Jamaica by workers who were protesting their conditions of labour and poor wages. This prompted the setting up of the Moyne Commission of Enquiry in 1938, whose report exposed the horrible conditions under which people in the British Caribbean lived. The Barker Commission of Enquiry of 1944 also examined the social conditions of sugar workers as well as the Goldenberg Commission of 1960, which described the living conditions of sugar worker as “deplorably low and inhuman” (1960, p. 16). Clearly, the installation of the plantation system in Jamaica not only stymied the economic development of the colony, but had profound social, cultural and psychological implications. The rigid class system bequeathed by this system, the dysfunctional society lacking social cohesion and critical infrastructure, necessary for the development of a wholesome society, are bound to have far reaching impacts. The sustained and orchestrated efforts of the planter class and the colonial administration to frustrate the efforts of ex-slaves to establish their independence through entrepreneurship, the denial of education, access to land and justice to freed Africans would have left deep psychological scars, perpetuating distrust of authority and lack of self-confidence in the oppressed people. These social, cultural and psychological impacts will certainly be brought to bear on the efforts of the Government, through its Adaptation Strategy to transform SDAs.

Changing the Institutional Environment---Caribbean Perspectives Whilst Best’s plantation economy theory properly describes and characterizes the plantation system, it does not offer prescriptions. Beckford moved from diagnosis and description of the pervasive influence of the plantation system on all aspects of life in the Third World, to providing broad prescriptions in terms of breaking this dependency and “under-development trap” and developing a society which creates “genuine independence” and improves the “welfare of Third World peoples” (Beckford, 1972, pp. xvi–xvii). Citing the structural undermining of domestic agriculture by the plantation system, through lack of access to land, technology and capital, and the unfavourable terms of trade

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between commodity exports from Third World countries and imports of food, as well as the lack of linkages within the economy, Beckford (1972, p. 196) argued that the plantation system “retards the process of development and structural transformation and induce a dynamic of under-development”. Therefore, for Beckford (1972, p. xxv), what is required is a “change in the institutional environment” and a new paradigm of development. Elements of this change include the development of an education system oriented to development, land reforms, development of indigenous cultural and social institutions, and new forms of political organizations. Beckford was among the first to challenge contemporary notions of development. For Beckford, economic development cannot be measured solely by real and sustained increase in per capita income over time, as indeed, the levels of poverty and inequality in the distribution of income can coexist with growth in per capita GDP. Within this context, Beckford emerged as a pioneer in terms of putting people as the central focus of development. Based on Beckford’s comprehensive and people-centred concept of development, he was well ahead of Amartya Sen, who gave the broadest interpretation of poverty in terms of individual’s lack of entitlements and absence of abilities, as well as the UNDP, which formulated the Human Development Index (Brewster, 1996; Meier, 1996). According to Beckford (1972, p. 203) “economic development requires a highly motivated population with progress oriented values directed at the development effort and with special social institutions that provide the necessary incentives and rewards. In addition, development requires a high degree of factor mobility, good government to organize the collective will of the society, and social stability to engender confidence in the future”. Beckford (1972) went on to enumerate the “concrete requirements” of development to include, inter alia: 1. an education system orientated to the promotion of “national consciousness” with its ultimate outcome being the creation of a society in which individuals’ full needs are accomplished through continuous improvements in labour productivity. 2. an emphasis on scientific research and innovation to “expand production possibilities”.

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3. creation of “well designed, strong local communities” catering to the needs of every individual and providing opportunities for each individual to make a contribution to the larger goal of developing the said society. Beckford’s broad outline of the dimensions of development foreshadows what Ekins et al. (2007) identified as the four types of capital which are essential in providing the goods and services required to meet human needs: manufactured capital, natural capital, human capital and social capital. Taken together, these four pillars of capital provide the mix of goods and services that not only satisfy man’s need for consumption, but according to Ekins et al. (2007, p. 66), are also essential for “satisfying work, good health, rewarding personal relationships, and a full range of environmental goods and services”. Stiglitz et al. (2009) recognizing these four pillars of capital in comprehensively satisfying human needs, advocated for a new set of matrices to measure human development, transcending tradition matrices of economic growth, per capita GDP etc. Stiglitz et al. (2009) therefore suggested that attention should be paid to the subjective determinants of well-being/quality of life, and therefore national statistics must be complemented by measuring people’s perspective on happiness, sense of security, leisure and self-worth. Stiglitz particularly singed out unemployment as a matric which is not only a measure of economic and social well-being, but as affecting people’s perception of self-worth, which breeds anxiety that can affect one’s health. C.Y. Thomas also made a significant contribution to the literature on underdevelopment, focusing on the relationship between size and development and the impact of trade liberalization on small states. According to Thomas (1974, p. 15), existing literature on development views size as only a factor of nature and “independent of the social system”. For Thomas (1974, p. 16) though, “smallness is a factor of critical social importance.” Thomas (1974, p. 16) posited that the neo-classical capitalist framework characterized by “market constraints”, “the social cost of development”, “private appropriation of material output”, “allocation of resources based on the criterion of profit”, cannot achieve the transformation of small dependent underdeveloped economies. Against this background, Thomas (1974) set out a theoretical framework to:

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1. analyse the struggle to develop the mode of production and the production relations in these economies. 2. design an economic strategy to help these economies develop their indigenous productive forces to transition from dependence and underdevelopment to socialism. Based on Thomas’ analysis, the dependence of small, underdeveloped economies is rooted in the divergence between domestic resource allocation and the needs of the broad mass of society. In other words, the economy is producing goods it does not consume, and consuming goods it does not produce. Thomas agreed with George Beckford in terms of the root and manifestations of this dependence. For Thomas (1974), transformation must reverse this cycle, that is, cause a convergence between domestic allocation of resources and domestic demand, and fulfilling the needs of the population. If the above divergence is caused by foreign ownership of the means of production, export specialization for metropolitan markets, then only a revolution can effect this transformation. According to Thomas (1974), the strategy to effect this transformation includes: 1. worker/peasant alliance 2. planning of both production and consumption 3. development of indigenous technology to effect the kind of organic link between resources allocation and demand. The above solutions proffered by Thomas are consistent with MarxistLeninist theories of class struggle and revolution. This approach however, throughout the former Soviet Bloc countries has failed to produce the kind of social and economic transformation envisioned by Thomas, as they do not encourage genuine democracy, innovation, and free enterprise. Moving from the abstract to the concrete, Thomas in his 1985 work, Sugar—Threat or Challenge highlighted the potential of the sugar cane to serve as the raw material to support a chemical industry producing ethanol, energy etc. This recommendation was made not only against the background of the versatility of the sugar cane as a plant, but as a means of reversing the underdevelopment in the current plantation model, with its

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exclusive focus of producing and exporting sugar to Europe. According to Thomas; the study of sucro-chemical technology falls within the scope of the search for an industrial base in what is a relatively abundant regional raw material, … to assess whether there is any possibility for a chemical industry based on sucrose as opposed to hydrocarbons, … in the context of the more general search for a pattern of investments, growth, output, consumption, and technological change that would be consistent with the development, as against the perpetuation of the underdevelopment of the Caribbean region. (1985, p. 129)

Consistent with his theory of transformation from underdevelopment, Thomas (1974, pp. 177–227) gave high priority to an industrialization model that not just merely produced commodities for export and consumption, such as sugar, but to industries that produced raw material for further industrial processing. For Thomas (1985, p. 130), such industrial development is autonomous and creates a “self- perpetuating sequence of investment that would internalize the bases of growth and development of the national economy.” This model of industrialization would be in stark contrast to the failed import substitution model of the 1960s which was supported by heavy incentives and protectionism. In fact, traditional plantation economies such as Brazil and Mauritius have been successful in developing high value food and energy products from the sugar cane, which have not only contributed to the development of their sugar industries, but their economies on the whole (Deepchand, 2001). In fact, the Adaptation Strategy itself proposes the diversification of the sugar industry’s production base in order to increase income from the industry and put it on a sustainable footing. C.Y. Thomas is among the first of economists to assess the trade dimension in the long-standing discourse on the impact of size on economic development. Thomas’s theory on the divergence between patterns of resource use in small underdeveloped economies and their evolving domestic demand confirms the concentration of the society’s resources on producing a single crop for export to the metropole. The smallness of these economies has led to a highly specialized export sector. The other side to divergence was that domestic demand was satisfied by imports.

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With the growing liberalization of trade globally and the formation of the World Trade Organization (WTO), issues of trade became central to the debate in the literature about economic development and the discourse on size within this debate. For Thomas (2004), this debate must begin with the premise that the goal of trade policy must be the promotion of sustainable human development, as advocated by the United Nations Development Programme (UNDP). Unfortunately, Thomas (2004) asserted that the empirical evidence shows that liberalized trade does not always generate economic growth, and further where growth occurs, it does not always lead to sustainable human development. The gains of trade liberalization are mainly realized in countries that have first prepared themselves through improving the welfare of their people, as well as strengthening the scientific/technological capacity and skills level of the population. Thomas (2004) commenced his analysis by addressing the unresolved issue in relation to a universally accepted definition of “small”, and whether size matters in international trade. The complication regarding the definition of small relates to the fact that there is considerable heterogeneity in the wide array of so-called small states in relation to population, land mass, level of development and vulnerability to external shocks and natural disasters. Thomas (2004) sought to establish a number of common constraints among small states as plausible criteria for smallness. These include the problem of factor endowment, economic structure, macro-economic management, limited social and cultural capital, high operating cost structures, and vulnerability. According to Thomas (2004, p. 11), “the area in which it seems a special case can best be demonstrated, in a statistically verifiable manner, is vulnerability”. He therefore encouraged small states to “frame their claims as ‘small vulnerable states’”, in their quest for development assistance and for special and differential treatment (SDT) in multilateral negotiations. The intent of SDT is the creation of a “human development orientated global trade system”. SDT is manifested in different forms such as preferential trade, protection of infant industries, and technical assistance for capacity building and aid. This position has been largely resisted by richer developed countries and has stalled the agenda of the Doha Development Round for some time now. Thomas (2004, p. 19) bemoaned the position of richer countries that “liberalized trade, ipso facto, always favours growth, poverty reduction, and development”. Thomas disagreed with this view, citing empirical evidence from a UNDP 2003 study which showed a

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weak relationship between the two. Studies by Weller and Hersh (2002) also supported this position. Conversely, according to Thomas (2004, p. 20), it is equally not statistically established “that liberalized trade uniformly impedes growth and development”. Thomas (2004, p. 20) concluded from the literature on the subject that “gains from liberalized trade are more likely to occur among trading partners of similar level of development”. Thomas (2004, p. 20) further concluded that the trade policy of small states “must be crafted with complex development and adjustments in mind”, in order to reap the potential benefits of trade liberalization and minimize disruption attendant on the opening up of their vulnerable economies. In this context, Thomas supported the argument for SDT, which recognized the intrinsic disadvantages associated with size, and called for special policies and mechanisms to compensate for these, and for those countries not so disadvantaged to assist. Notwithstanding the difficulty for small states in advancing the cause for SDT in the WTO, Thomas (2004) observed that much progress was being made in regional trade agreements, such as the Cotonou Agreement, the Free Trade Area of the Americas (FTAA), etc.; which continue to have preferential trade arrangements. These SDT provisions in regional trade agreements must form the “new floor” for negotiations in the WTO, because of the sheer number and importance of the countries engaged in such regional/hemispheric and bilateral trading arrangements (Thomas, 2004, p. 28). Despite the compelling case for SDT for small states, Thomas (2004) pointed to their danger, especially as it relates to preferential trade. He demonstrated that the impact of preferential trade on development has been limited because it hampers competitiveness, protects inefficient enterprises, perpetuates dependence on traditional exports, creates diversion by locking out other developing countries which are not parties to these arrangements, and restricts the scope for expanding foreign exchange earnings, thereby fostering macro-economic and balance of payment pressures. In this regard, Perez (2003), Leslie (2002) and McQueen and Stevens (1989) all pointed to the failure of different preferential arrangements to effect genuine economic development and transformation in developing countries. In fact, Thomas (2004, p. 26) pointed to the basic failure on the part of many developing countries to even fill generous quotas they have been granted under non-reciprocal

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preferential arrangements. Thomas (2004), therefore, inferred that SDT should not be advanced as a panacea, but rather as a transitional position allowing for small states to have a breathing space to graduate to higher levels of development.

Sustainable Development and the Rejection of the Productivism Model Although Best, Beckford, Mintz and others spoke to the all-pervasive nature of the plantation economy, they generally described the influence of the system in social, political, and economic terms. Seriously lacking in these accounts is the environmental impact of the plantation economy in general, and its basic unit, the sugar plantation specifically. This is not surprising since the environment and its sustainable use only emerged as a serious development concern at the Stockholm Conference on the Human Environment in 1972 (Dresner, 2002). The existence of large tracts of fertile alluvial flood plains in Jamaica formed part of the initial incentive for the establishment of sugar plantations in the island (Mintz, 1971). Given the rapid development of sugar cane production in the seventeenth and eighteenth centuries, such intensive and rapid expansion of cane production must have involved significant land clearing, with significant loss of biodiversity. The establishment and development of the plantation system in the British West Indies took place during the heights of the Enlightenment period, which is closely associated with the notion of progress with its emphasis on man’s ability to conquer nature for the satisfaction of human needs. A number of scholars, including Redclift (1987), Dresner (2002), Capra (1983), Merchant (1980) and Carley and Christie (1992) point to this Enlightenment period, in which there was an explosion in the development of science, fuelling the Industrial Revolution, as transforming the relationship between humans and the environment. The twin developments of this new scientific paradigm and the Industrial Revolution were responsible for environmental degradation on a new scale. One significant area in which this global dominance of nature and people is most palpably demonstrated, is in the area of global food production. Thomas Malthus’ concerns about the limits to growth, with respect to the capacity of the then prevailing agriculture to feed and sustain a burgeoning world population, was mitigated considerably by explosions in the use of science and technology in agriculture

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(Malthus, 1798). This explosion resulted is associated with the pursuit of a productivism model involving, widespread use of fertilizers and other chemicals, significant mechanization and the development of varieties of seeds that literally fuelled a green revolution. According to Sage (2015), this productivism model of agro-industrial development has serious consequences for the environment in relation to greenhouse gas emissions, loss of biodiversity, depletion of freshwater resources, which all have significant ecological impacts. Sage (2015) also highlighted that the green revolution created significant dependency on a few crops to satisfy the bulk of global calorie demand. Sage (2015, p. 266) pointed out for instance that “of the 10,000 plant species that have been used for human food since the origin of agriculture, only 150-200 species have been commercially cultivated, of which only four – rice, wheat, maize, and potatoes supplied 50% of the world’s energy needs”. The absence of a focus on traditional and underutilized crops consumed by the poor, has been the root cause for this lack of diversity in the human diet (Hunter & Fanzo, 2013). Specifically in relation to the sugar industry, its rapid growth and expansion around the world have been made possible through the unsustainable use of natural resources (land and water), huge quantities of fertilizers and chemical, with detrimental consequences for the environment. This has been well documented by scholars around the world. Hashem et al. (2015) raised a number of concerns about the environmental impact of sugar production including land degradation, pressure on water resources, loss of biodiversity and habitat loss due to extensive land clearing to accommodate sugar cane production, pollution of marine and freshwater due to run-off of chemicals and other wastes of the industry, as well as air pollution, resulting from the burning of cane for harvesting, releasing persistent organic pollutants into the atmosphere. Hoekstra (2010) and the World Wildlife Foundation (2005) echoed similar concerns. Life cycle assessment conducted by Ramjeawon (2004) in Mauritius and Mashoko et al. (2010) in South Africa, point to shocking quantums of natural resources and chemicals used in the production of one tonne of sugar, with significant negative externalities. Even where sugar cane is cultivated for the production of ethanol, which generally has a positive environmental impact through reduced GHG emissions, Filoso et al. (2015, p. 1848), assessing the Brazilian situation, concluded that the manner in which sugar cane expansion has been carried out in Brazil

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“could decrease or even neutralize potential GHG savings”. This conclusion was arrived at by Filoso et al. (2015) based on the loss of sensitive habitats and biodiversity loss resulting from “land use change for the production of biofuel feed stocks”. The assessment also pointed to erosion and soil degradation, water quality deterioration from chemical run-offs and air pollution associated with wide scale cane burning. More specifically, Filoso et al. (2015, p. 1848) signalled to, for instance, 1.5 million hectares of pasture lands converted to sugar cane production between 2001 and 2009. The environmental impacts of the sugar cane industry are exacerbated in Small Island Developing States (SIDS), within the context of global climate change. Hall (2015, p. 55) asserted that SIDS have in recent times “become both actual and symbolic representation of the central challenge of sustainable development to reconcile human demands with limits of natural resources.” Wallner and Narodoslawsky (1996), Bebbington (1997), Deschenes and Chertow (2004), and Peti (2012) have all been concerned about the capacity of SIDS to pursue development within the context of their finite endowment of natural resources and carrying capacity that these resources will allow. Wallner and Narodoslawsky (1996), therefore, spoke to the concept of ‘islands of sustainability’ within the wider context of sustainable development. Hall (2015) highlighted a number of characteristics of SIDS which militate against their sustainable development. These include high levels of urbanization, with population and critical infrastructure concentrated in coastal areas, heightened susceptibility to the impact of climate change— sea level rise, more frequent and violent storms/hurricanes and prolonged and frequent droughts, limited natural resources, and high vulnerability to external shocks. The issue of urbanization and concentration of population and infrastructure in coastal areas as pointed out by Hall (2015), Donnelly and Jiwanji (2010), and Wilkinson (2011), will create tension in relation to land use. This is particularly poignant for SIDS with developed sugar industries, since as pointed out by Mintz (1971), it is these coastal plains that have been most conducive for the expansion of plantations, which coincidentally are in greatest demand for housing development. The coastal areas are also subject to saline intrusion, due to over-pumping for domestic water caused by urbanization and for industrial use as Chui and Terry (2013) and Hall (2015) indicated is typical for many SIDS.

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The colonization of the Americas, Africa and Asia, of which the plantation system was a central feature, was the tool used by Europe in the sixteenth and seventeenth centuries to garner natural resources for its development. In the twentieth century, the North’s control of world food production was effected through the green revolution, under which the North created dependence in the South through their intellectual property hold on the varieties of cereal developed and their control of fertilizer, seed, and chemical production. In recent years, however, the North has been promoting this productivism model for food and biofuel production through significant “land grabbing” in the South, as significant powerful states and corporations engaged in land leasing and other investment opportunities in pursuit of their own food and energy security. Springett and Redclift (2015) and Hoff (2011) point to the increasing incidence of land grabbing of the Chinese and the Gulf States in Africa, threatening the Continent’s own food security. Bernal (2014) similarly highlights the advance of the ‘Dragon’ in the Caribbean. The plantation economy system has failed to effect diversification and the economic and social development of colonial societies, creating dependency and poverty. The productivism model of the twentieth century, being promoted by the World Bank, IMF, and more latterly the WTO, along with free trade, globalization and the market, represents part of the doctrine of the dominance of nature for profit (Brack, 1998; Esty, 1994; Gray, 1998; Jacobs, 1991; Lang & Hines, 1993; Springett & Redclift, 2015). This approach has not solved world hungry, but plunged millions in the South into poverty, created new dependencies and resulted in a massive environmental toll. A new model of development is required. Scoones (2015) indicates that this new model must focus on rural development, poverty alleviation, well-being, social justice, emphasizing entitlements and enhancing human capabilities and freedom, as well as a respect for the environment. These are concerns that preoccupied Beckford (1972), Sen (1981) and Stiglitz et al. (2009), among others, who have been advocating a more comprehensive set of metrics to measure human development. It is to Caribbean scholars that we must look to articulate the parameters of this new model of development. At the heart of this model must be the development of a new agriculture, as agriculture holds the key in reducing poverty (World Bank, 2008).

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Citing the failure of export agriculture in the Caribbean due to the erosion of trade preferences through global trade liberalization, Kendall and Petracco (2009, p. 3) made a compelling case for a new strategy for the development of Caribbean agriculture, whose focus is not only on increasing production and productivity, but also on addressing the “negative externalities of conventional production”. Specifically, Kendall and Petracco (2009) proposed: 1. an expansion of non-agricultural exports given limitedly endowment with natural resources; 2. competitive import replacement both to reduce food imports and provide greater revenue for local farmers faced with the hurdles of scrutiny and phytosanitary barriers and low export prices; 3. a focus on supplying the CARICOM market by Caribbean States, thus widening the concept of the domestic market for each territory; and 4. increased focus on organic farming to reduce the negative externalities of agricultural production, as well as to increase earning in this growing global niche market for organics Pretty (2003) and Halberg et al. (2006), concurred. The above policy prescriptions by Kendall and Petracco (2009) within the general framework of economic, social, and environmental sustainability are consistent with the prescriptions and approach being advocated by Sage (2015), Kwa and Bassoume (2007), Sen (1987), and Pretty et al. (2010). In essence, the sustainable approach to agricultural production must: 1. reject “magic bullet” technologies, reminiscent of the green revolution, which create dependency through corporate control of all aspects of the food chain through copyright over seeds, chemical and fertilizer production, and which focus on a narrow band of food, creating dependency and nutritional insecurity and neglect a range of indigenous crops which can enrich diet in the South (Sage, 2015). 2. explore “context specific” modalities that combine social, technological, and ecological elements germane to a locale (Sage, 2015, p. 259). 3. embrace working with small farmers as a key strategy.

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According to Sage (2015), this new approach must be underpinned by the following principles of sustainability: ecologically sound, economically viable, and socially just. For the sugar industry, this approach mirrors Richardson’s vision of a transformed industry, from one “deeply structured by global capitalism” to one that is “more ecologically sound and socially just” (Richardson, 2015, pp. 9 and 12).

Conclusion The sugar industry is Jamaica, in its establishment and evolution, seems to exhibit all the classical features of the plantation economic model. It was set up on a monoculture basis, with an exclusive focus to satisfy Britain’s demand for sugar. At the same time, the socio-economic development of the island was largely neglected, with the consumption needs of the population largely satisfied by imports. This arrangement benefited principally the planter, who resorted consistently to the British Government, their collaborators, for support when the system is challenged. Attempts by freed Africans to assert their independence through the peasantry were systematically undermined, resulting in widespread poverty, lack of diversification and a deeply entrenched dependency. Apart from economic dependency, plantation system caused profound social, cultural and psychological impacts, manifested in a highly stratified, socially dysfunctional society, with weak family and community structures, and crippling poverty. In the last 50 years the fortunes of the sugar industry has been waning through lack of investment in improving efficiency, abandonment by some foreign owners, and more profoundly, through the systematic dismantling of the preferential access Jamaica enjoyed in the EU market brought on by a wave of global trade liberalization, which received new impetus with the creation of the WTO in 2001. It is this sugar industry that the Government set out to restructure in 2005, while improving the long neglected social and environmental conditions in SDAs through its Adaptation Strategy, embracing for the first time a sustainable development approach. Clearly, the Adaptation Strategy, given this new approach has to be implemented within the framework of a new model of development, which puts people at its centre and promotes rural development, poverty

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reduction, well-being, entitlements and freedom, justice and environmental sustainable. These are the goals on which Jamaica’s independence was premised. We will now examine how independent Jamaica has been treating with the sugar industry.

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Padilla, E. (1959). Contemporary social-rural types in the Caribbean region. In V. Rubin (Ed.), Caribbean studies—A symposium (pp. 22–29). University College of the West Indies. Pan American Union. (1959). Plantation systems of the new world: Papers and discussion summaries of the seminar held in San Juan, Puerto Rico. Pan American Union. Patterson, O. (1967). The sociology of slavery: An analysis of the origins, development, and structure of negro slave society in Jamaica. Fairleigh Dickinson University Press. Patterson, O. (1982). Slavery and social death: A comparative study. Harvard University Press. Perez, E. (2003). Special and differential treatment: Effects and implications for small open developing economies. In Paper presented to the ASSA. Washington, DC. Peti, M. (2012). A territorial understanding of sustainability in public development. Environmental Impact Assessment Review, 32(1), 61–73. Polopolus, L. C. (2002). World sugar markets and entangled government programs. In A. Schmitz & T. Spreen (Eds.), Sugar and related sweetener markets: International perspectives. Wallingford, UK: CABI Publishing. Prebisch, R. (1949). The economic development of Latin America and its principal problems. United Nations Department of Social and Economic Affairs. Pretty, J. (2003). Agroecology in developing countries: The promise of a sustainable harvest. Environment: Science and Policy for Sustainable Development, 45(9), 8–20. Pretty, J., Sutherland, W., Ashby, J., Auburn, J., Baulcombe, D., Bell, M, … Burke, J. (2010). The top 100 questions of importance to the future of global agriculture. International Journal of Agricultural Sustainability, 8(4), 219– 236. Ramjeawon, T. (2004). Life cycle assessment of cane—Sugar on the island of Mauritius. The International Journal of Life Cycle Assessment, 9(4), 254–260. Ransom, D. (2003). The sugar trap. New Internationalist, 363, 3–6. Redclift, M. (1987). Sustainable development: Exploring the contradictions. Routledge. Richardson, B. (2009). Sugar: Refined power in a global regime. Palgrave Macmillan. Richardson, B. (2015). Sugar. Polity Press. Richardson, B. C. (2007). The importance of the 1897 British Royal Commission. In J. Besson & J. Momsen (Eds.), Caribbean land and development revisited (pp. 17–28). Palgrave Macmillan. Sage, C. (2015). Food and sustainable development: How should we feed the world? In Routledge international handbook of sustainable development. Routledge.

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Scoones, I. (2015). Sustainable livelihoods and rural development. Practical Action Publishing Ltd. Sen, A. (1981). Poverty and famines: An essay on entitlements and deprivation. Clarendon Press. Sen, A. (1987). Hunger and entitlements. World Institute for Development Economics Research, United Nations University. Springett, D., & Redclift, M. (2015). Sustainable development: History and evolution of the concept. In Routledge international handbook of sustainable development. Routledge. Stiglitz, J. E., Sen, A., & Fitoussi, J.-P. (2009). The measurement of economic performance and social progress revisited. OFCE. Sudama, T. (1979). The model of the plantation economy: The case of Trinidad and Tobago. Latin American Perspectives, 6(1), 65–83. Sunkel, O. (1969). National development policy and external dependence in Latin America. Journal of Development Studies, 6(1), 23–48. https://doi.org/ 10.1080/00220386908421311 Thomas, C. Y. (1974). Dependence and transfiguration: The economics of the transition to socialism. Monthly Review Press. Thomas, C. Y. (1985). Sugar threat or challenge? An assessment of the impact of technological developments in the high-fructose corn syrup and surochemicals industries. International Development Research Centre. Thomas, C. Y. (2004). Making trade work for people: The concerns of small states on global trade regime: Resilience (Vol. 6). UNDP. Thompson, E. T. (1957). The plantation: A bibliography. Pan American Union. Wagley, C. (1957). Plantation America: A cultural sphere. In V. Rubin (Ed.), Caribbean studies—A symposium. Institute of Social and Economic Research, University College of the West Indies. Wallner, H., & Narodoslawsky, M. (1996). Evolution of regional socio-economic systems toward “island of sustainability.” Journal of Environmental Systems, 24(3), 221–240. Weller, C. E., & Hersh, A. S. (2002). The long and short of it: Global liberalization, poverty and inequality (Economic Policy Research Paper No. 260). Economic Policy Institute. Wilkinson, A. (2011). Urban challenges in the Pacific. In Fifth Asia-Pacific urban forum cities of opportunity: Partnerships for an inclusive and sustainable future. ESCAP. Williams, E. E. (1944). Capitalism and slavery. University of North Carolina Press. World Bank. (2008). World development report 2008: Agriculture for development. World Wildlife Foundation. (2005). Sugar and the environment: Encouraging better management practices in sugar production. Retrieved from http://aws assets.panda.org/downloads/sugarandtheenvironment_fidq.pdf

CHAPTER 3

The Origins and Development of a Plantation Economy

Introduction The Monymusk SDA stretches from Hayes in the east of the Parish of Clarendon, Jamaica, to Milk River in the west of this southern Parish, on the rich alluvial plains of Vere. These fertile flat lands were key to the establishment and development of a vibrant sugar industry. Mintz (1971, p. 22) points to the existence of large expanse of coastal alluvial flood plains in especially the Greater Antilles, as a critical condition for the development of “commercial tropical agriculture”, as where these conditions exist “such agriculture could be conducted on big estates, since flatness of terrain made possible large scale organization of enterprize with massed labour, massed machine or both”. The Monymusk area therefore by virtue of its physical characteristics self-selected itself for the development of a serious sugar industry. But beyond the physical characteristics, it is important to understand the social and economic factors that have preserved the dominance of this industry in this area and rendered these communities so dependent on this industry up to the present time. This search has to begin with tracing the history of the development of the sugar industry in Jamaica and how external factors and interests have consistently impacted the fortunes of this industry, and hence the socio-economic conditions of sugar dependent communities and their physical environment. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_3

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This chapter will therefore trace the historical development of the sugar industry in Jamaica, in terms of how it emerged and evolved over time. What are the critical factors that drove that development? What challenges have the industry faced in its development and how has it responded? What is responsible for its long dominance in Jamaica, despite some degree of diversification in our modern economy? A clear understanding of the industry and its development and structure will help to put into perspective the most recent initiatives for transformation, in response to the loss of Jamaica’s preferential market in the EU.

The Origins of the Industry The sugar cane is said to have been introduced to the Caribbean by Christopher Columbus on his third voyage in 1493, having taken the plant from the Canary Islands. Richardson (2009, p. 42) however, posits that for the islands of the Greater Antilles, that is, Cuba, Puerto Rico, Jamaica and Hispaniola, the growing of sugar cane by the early Spanish settlers “was a transitional stage in the evolution of cane farming”. Indeed, the over-riding motive of the Spaniards in their conquest of the New World was to harvest gold. Not finding gold in the West Indies, their focus shifted to the Central and South American mainland. The islands of the Greater Antilles were therefore never effectively engaged, which rendered them vulnerable to the onslaught of attacks from rival European nations throughout sixteenth century. Before reaching the West Indies on Columbus’ third voyage, the sugar cane undertook a rather interesting journey from the South Pacific, travelling westward to finally reaching Jamaica sometime in the early sixteenth century. Polopolus (2002) identified New Guinea as the original area where the sugar cane was domesticated. From the South Pacific, sugar production gradually spread to South East Asia, where Polopolus (2002, p. 1) asserts sugar was first extracted from sugar cane in India “a few thousand years BC”. Mintz (1985) gives a detailed and interesting exposition of the development of sugar production in India and its “expansion westward” to the Middle East and the Mediterranean, through the exploits and conquests of the Arabs. The major growing areas were Southern Spain, North Africa and the Island of Sicily. From the Mediterranean Basin production gradually shifted to the Atlantic Islands of Spain and Portugal. Mintz (1985, p. 30) characterizes this further western expansion to the Atlantic Islands

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as a watershed development in the evolution of a global sugar industry, both in terms of the changing pattern of sugar consumption in Europe, and serving as a ‘prototype’ for transitioning the industry into the new world. By the time of this shift in the locus of sugar production in the fifteenth century, there was a growing demand for sugar in Europe, with an increasing differentiation in the product to satisfy the multiple emerging uses of sugar. Refineries began to mushroom in urban centres all over Europe, supplied by the raw material from these Atlantic Islands. Central to the ‘prototype’ alluded to by Mintz (1985) was the increased use of slave labour. Mintz (1985) posits that slave labour became necessary in the waning days of the Mediterranean’s dominance of sugar production, when warfare and pestilences ravaged the population of the Mediterranean, rendering labour scarce and expensive. The use of slave labour was perfected in the expansion of the industry in the Portuguese islands of Sao Tome and Madeira and the Spanish Canary Islands. Mintz (1985) identifies the use of slave labour and the division of labour between these islands and their owners in mainland Europe, in terms of producing the raw material and refining respectively, as the ‘prototype’ which was ready to be transferred to the recently found ‘New World’. Wide scale growing of sugar cane on a commercial basis began in earnest in the Portuguese colony of Brazil. In fact, Brazil dominated sugar production in the Americas throughout the 1500s. Production was at a much smaller scale in the Spanish West Indian Islands of Jamaica, Cuba, Hispaniola and Puerto Rico. As mentioned previously, Spain did not accord much attention to these islands, being disappointed at not finding gold. Efforts in Hispaniola to establish a sugar industry represented at the time the most serious attempt by Spain, although sugar cane was also planted in Jamaica, Cuba and Puerto Rico. The development of the sugar industry in the Caribbean was driven principally by rivalry between Spain and other European powers—the English, Dutch and French for hegemony and control of colonies in the New World. These rival powers saw potential in harvesting wealth in the New World through attacking and plundering Spanish ships, and the production of a range of plantation-type commodities, notably sugar, cotton and tobacco, on territories wrested from Spain. Of all the European powers, Britain distinguished herself as the leading rival of Spain, capturing according to Mintz (1985, p. 37) “the most colonies, imported the most slaves (to her own colonies and, in absolute terms, in her

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own bottoms), and went the furthest and fastest in creating a plantation system”. Richardson (2009) asserts that by 1650 Barbados had already established sugar estates using local capital. Its favourable location in the Atlantic, relatively insulated from enemy attacks, and its flat lands, made it the ideal location for Britain to make its foray into the sugar business in the West Indies. By the mid-seventeenth century, Barbados, an island of only 166 square miles, became the focal point of British sugar production in the Americas. Harrison (2001), for instance, indicates that by 1655 Barbados became “the richest English territory in the Americas”, generating significant wealth for Britain. Polopolus (2002) confirms that Barbados continued to flourish as Britain’s most important sugar colony, possessing some “358 sugar mills by 1683 and producing enough sugar to fill 400 ships”. While Barbados was rising as major sugar colony in the midseventeenth century, the English led by Admiral William Penn and General Robert Venables were busy capturing a weakly defended and ineffectually occupied Jamaica from the Spanish. The English wasted no time in establishing a vibrant sugar industry in Jamaica, inspired by larger quantities of rich fertile coastal plains, in comparison to Barbados. By the turn of the eighteenth century, Jamaica replaced Barbados as the centre of sugar production for Britain. Mintz (1985). Jamaica quickly became the leading exporter of sugar in the world, during this period, according to Harrison (2001). In fact, Williams (1944) noted that in 1768 Jamaica had some 648 sugar plantations producing some 68,160 ‘hogsheads’ of sugar. The sugar industry was now well established and would survive many challenges to remain the dominant agricultural activity to the present time. Importantly, the industry was not established in Jamaica to drive the development of the colony, but rather to enrich the owners of the enterprize, who now form an emerging elite in Britain. The colonies in the West Indies, including Jamaica, provided tremendous benefits to Britain, which by the late eighteenth century was emerging as a capitalist nation. According to Mintz (1985, p. 55), “the Caribbean plantations were a vital part of this process, embodying all the features, and providing both important commodities for European consumption and important markets for European production.” Williams (1944), Gillespie (1920), and Thomas and McCloskey (1981) all point to the considerable wealth that Britain amassed from the sugar

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industry in the West Indian colonies, which provided the funding for the development of capitalism in England, so brilliantly articulated by Adam Smith in his 1776 classic “The Wealth of Nations ”. Williams (1944, p. 13) was more pointed in his explanation of the contribution of sugar from the West Indian colonies to the wealth of Britain and the rise of capitalism, indicating that “tremendous wealth was produced from an unstable economy based on a single crop, which combined the vices of feudalism and capitalism with the virtues of neither.” Quite apart from the funding the development of capitalism in Britain, through the expropriation of profits from the sugar trade, Mintz (1985) makes a persuasive case for the contribution of the ‘agro-industry’ that the plantation system represents, as a forerunner to the efforts of industrialization of Britain. Given the complexity of the plantation system, combining field with factory, involving skilled and unskilled labour and requiring schronization of the various aspects of the production process, Mintz (1985, p. 52) questioned the validity of “the common assertion that Europe ‘developed’ the colonial world after the European heartland”. Clearly, by the middle of the eighteenth century, the sugar industry was firmly established in Jamaica, and in a mere century became Britain’s most prized jewel in the West Indies, amassing considerable wealth to its owners and revenue to the crown. What would have been responsible for this phenomenal growth of this colony within a few decades of its capture by the British?

Fuelling the Growth and Preserving the Hegemony The rapid development and growth of the sugar plantation system in the British West Indies between the mid-seventeenth century and the mideighteenth century was not random, but the result of both demand and supply side considerations. On the demand side, Mintz (1985) traced the consumption of sugar in Europe from a rarity, used principally for medicinal and decorative purposes, and as a spice, when the sugar cane arrived in the Mediterranean, to being a much sought after luxury goods by the time the locus of production shifted to the Atlantic Islands. This shift was accompanied with increased knowledge of sugar in Europe and a greater level of differentiation of the product, in keeping with its multiple uses in the 1300s and 1400s.

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However, according to Richardson (2009, p. 47), despite the increase in demand, “up to the end of the seventeenth century sugar remained the monopoly of a privileged minority”. Both Mintz (1985) and Richardson (2009) point to the subsequent seismic shift in consumption of sugar in Europe, moving from a luxury goods to becoming a mainstream, highly demanded commodity as food for the working class people. Mintz (1985) in particular speaks to the transformation in the social value of sugar, from a luxury item to a mainstream food in the diet of the proletariat, as the centre of global sugar production shifted to the New World. Richardson (2009) asserts that demand continued to rise, even after sugar prices began to rise in the mid-eighteenth century. Doubtless, Jamaica, whose sugar industry was being consolidated around this same period, fortuitously or deliberately, would have benefited from this sustained surge in sugar demand. There could not have been a more favourable set of circumstances with respect to the demand for sugar, for the growth and development of Jamaica as a sugar colony. To the extent that Jamaica emerged as the world’s leading exporter of sugar in the eighteenth century, suggests that Jamaica played a significant role in satisfying this growing demand for sugar. Notwithstanding the favourable situation with demand for sugar in Europe towards the end of the seventeenth century, this in and of itself was not sufficient to effect expansion of sugar production in Jamaica. Production had to be organized, supported by the necessary policy environment and infrastructure, and must above all be profitable. There are therefore a range of supply side initiatives that must be considered. It has already been established that the use of slave labour in the plantations of the Atlantic Islands in the 1400s was a critical element of the ‘prototype’ established there for replication in the New World. From the very beginning, Jamaica’s sugar industry was built on slave labour, even in the fledgling stages of Spanish occupation, since as Mintz (1971) points out, the native Indians were completely exterminated in a mere 50 years of European settlement. Britain wasted no time in building out this plantation economy in her West Indian territories through perfecting of the transatlantic slave trade, described by Mintz (1971, p. 26) as the “greatest demographic phenomenon”, facilitating what he referred to as “an agricultural design for the production of export commodities for foreign markets”. This characterization by Mintz falls squarely within the frame of the plantation economic model outlined in Chapter 2, an economic design built on

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monoculture and exclusively export oriented plantations, in colonies with a burgeoning slave population to support this system, whose consumption is satisfied almost exclusively from imports from the Metropole. According to Mintz (1985), Richardson (2009) and Galloway (1989) within 100 years from the beginning of the eighteenth century to the beginning of the nineteenth century, Jamaica was the recipient of some 662,400 African slaves. To put this into perspective, this would represent some 25% of Jamaica’s current population! In fact, Richardson (2009) quoting Coote (1987) indicated that during this period, Jamaica and Saint Dominque were the recipients of 80% of the world’s trade in slaves, which supported these two Colonies responsible for producing in excess of 80% of the world’s sugar! There is therefore no doubt that there was a strong positive correlation between the proliferation of the use of slave labour in Jamaica and its contribution to world sugar production. Slave labour is perhaps the most significant supply side factor in growing the sugar industry in Jamaica in its infancy and cementing its dominant position in the colony’s economy. The fortunes of the sugar industry in the New World was inextricably linked with European settlement and rivalry. Portugal was first out of the block in terms of establishing a powerful sugar industry in Brazil, which dominated the sugar trade throughout the 1500s. The rapid rise of the British sugar empire commencing with establishing Barbados as its major sugar colony, while annexing Jamaica in the mid-seventeenth century, quickly put an end to Portuguese domination. Around this same time the French became a serious sugar power through their exploits in Saint Dominque, as well as the Dutch in the Southern Caribbean. The overriding political philosophy among the English, French and Dutch in those early days of European rivalry was to annex as many territories and wealth from Spain, who being the first to ‘discover’ the New World, staked a claim to the entire Americas. These rival nations furthermore determined that whatever wealth they derive from their territories must be expropriated solely by the Motherland. This is the essence of the concept of mercantilism, that is, according to Richardson (2009, p. 44) to “confer national monopoly status” by each European power, on their nationals engaged in each segment of the triangular trade. In practical terms, only British vessels for instance, could carry finished goods from Britain to Africa on the first leg of the triangular trade, to exchange for African slaves, which slaves in turn could only be supplied to British colonies. In the colonies, their internal needs could only be supplied

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by imports from Britain, and of course for the final leg of this triangular journey, sugar manufactured in the British colonies could only be exported to British ports. The philosophy of mercantilism had to be underpinned by maritime legislation to enforce these national monopolistic principles throughout the triangular trade. Consequently, in 1651 Britain passed the Navigation Act. While the Navigation Act supported the national monopolistic status of those involved in the triangular trade, it was necessary to complement it with fiscal measures to discourage the importation of ‘non-imperial’ sugar into Britain. The French and the Dutch, of course, implemented analogous protectionist measures. Sugar from Jamaica and other British colonies was therefore insulated from competition in the British market, enjoying much lower duties than the competition—Dutch, French and Portuguese sugar. This protectionism gave the Jamaican sugar industry significant impetus for expansion and growth, and was the forerunner of a series of protective duties that Britain would use over the next 2 centuries to support imperial sugar at critical points in the life of the sugar industry. The protectionist measures were hugely successful. Mintz (1985, p. 39) points out that between 1660 and 1753, not only did British imports of sugar from the colonies grow from 1000 hogsheads to 110,000 hogsheads, but more and more of these imports were supporting British consumption, with only a minute fraction being exported by 1753. Indeed, British sugar production was destined for British consumers. The mercantilist posture of the British had implications that transcended the narrow obvious objective of preserving the sugar industries in the British colonies. Richardson (2009), drawing from Mintz (1985), succinctly summaries the role of mercantilism as guaranteeing a constant supply of raw sugar from the colonies to support and sustain British refineries; ensuring that the colonies remain a market for British manufactured finished goods; fuelling growth of British military and maritime prowess; and enriching the British treasury. While Britain and in particular the planter class were being enriched, this closed system of trade was denying consumers in Britain the benefits of cheap sugar, and British refineries the benefit of the cheapest source of raw material. Mercantilism therefore in a sense represented a significant transfer of wealth from the British consumer to a small elite planter class. More profoundly, it was plundering the colonies, stymieing the social and

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economic development of the colonies and perpetuating untold atrocities on the enslaved people. Protectionism was also inconsistent with the rising tide of free trade sentiments in Britain, associated with the rapid development of capitalism in that society. It was obviously not sustainable.

Challenges to King Sugar’s Hegemony While Britain between the mid-seventeenth and the mid-eighteenth century was rapidly expanding the plantation system in her sugar colonies of Barbados and Jamaica, reinforced by the mercantilist triangular trade, in parallel, there was a groundswell of free market ideas emerging, championed by Adam Smith. These ideas essentially eschewed British imperialism, the national monopolistic Trans-Atlantic Slave trade, insularity and slavery, in favour of international free trade, capitalism and the recognition of the inherent dignity of all human beings. Williams (1964) underscores the great contribution made by the colonies to financing the industrialization of Britain. Mintz (1985) similarly speaks to this invaluable contribution both in terms of the supply of tropical commodities to the British market (sugar, cotton and tobacco), but also in terms of Britain supplying the colonies of the West Indies with virtually the goods they consumed. Williams (1964) further highlighted the growth of the shipping industry and the employment that industry provided in the Motherland. Furthermore, it was the raw material of sugar and cotton from the New World that stimulated and sustained the refineries in Britain and the rest of Europe, as well as the buoyant textile industry. It is ironic therefore, according to Williams (1964, p. 2), that it was the wealth generated from sugar and slavery in the West Indies that fuelled British industrialization, which in turn “generated that supreme confidence among its capitalist pioneers which ultimately extended British economic perspectives beyond the restricted boundaries of the colonial empire”. Mintz (1985, p. 55) asserts that even though the plantation system was “not ‘capitalistic’, it was still an important step towards capitalism”. Clearly, it would seem that the plantation system of the colonies sowed the seeds of its own diminution. No other individual seemed to embody this extended “economic perspective beyond the restricted boundaries of the colonial empire” than Adam Smith, regarded as the father of modern capitalism. Adam Smith in his 1776 classic The Wealth of the Nations, championed the cause of

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free trade and rejected the insularity being perpetuated by mercantilism. Smith was Eurocentric in his outlook and was concerned with issues that Williams (1964, p. 3) characterize as “natural liberty, justice and the sacred rights of mankind”. Williams (1964, p. 3) further highlighted how Smith “attacked … the slave trade on which the colonies depended”. These emerging ideas of capitalism, free trade and liberty would certainly have rendered the burgeoning plantation system of the midseventeenth to the mid-eighteenth century extremely vulnerable. The truth is, the proponents of capitalism exposed the inefficiency and wastefulness of slavery, and the fact that the plantation system was principally benefitting a small band of planters, at the expense of British industry, which was forced to procure expensive imperial sugar for refining, and the British consumers who were denied access to cheaper sugar from Europe or from non-imperial colonies. In fact Thomas and McCloskey (1981, p. 99) clearly exposed the unevenness of mercantilism in terms of its beneficiaries, pointing out that far from maximising the “wealth of Britain”, “it was instead … a means to provide revenue to the Government and a device to enrich special interests groups”. Indeed, Williams (1964) pointed out that the value of British sugar imports from her colonies would have constituted only a fraction of what it would have cost to import the same quantity of sugar from Brazil or Cuba! Added to this was the enormous cost of maintaining this mercantile trade with her colonies, through naval wars and conflicts. The growing moral outrage and the active abolitionist movement in Britain, underpinned by a massive marketing campaign directed at British housewives, equating consumption of imperial sugar to consuming the flesh and blood of African slaves, was exerting considerable pressure on the plantation system. At the same time, in the colonies, slave resistance and the ballooning population of slaves compared to the relatively small European population, were adding more pressure to the system. The confluence of emerging capitalism, the abolitionist movement and increased slave rebellions in the colonies, constitutes the first great challenge to the hegemony of sugar and slavery in the West Indies. These pressures culminated in the abolition of slavery in the British West Indies in 1938. With the abolition of slavery, the plantations lost access to forced cheap labour, which rendered British West Indian sugar enterprises even more uncompetitive vis-à-vis their counterparts in Cuba, Dominican Republic and Brazil, where slavery was abolished much later, and whose sugar

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industries were the subject of significant American investment. The abolition of slavery was a defining moment in the fortunes of the plantation system in the West Indies, and signalled the triumph of capitalism over the protectionism embedded in mercantilism. The passage of the Sugar Duties Equalization Act in 1846, a mere 8 years after the abolition of slavery in the British West Indies, marked a further assault on the plantation system and the continuing advance of the forces of liberalization and capitalism in Britain. This Act in essence equalized the duties paid on British imports of sugar from its colonies, with those paid for sugar imported from elsewhere, essentially removing the protection enjoyed by imperial sugar. By 1849 the Navigation Act of 1651 was repealed, completing the project of dismantling the mercantilist triangular trade, “in the interest of free trade and cheap foods, resulting in a massive influx of refined sugar into Britain and the degeneration of production in the Caribbean”. Richardson (2009, p. 54). Williams (1964) details the emergence of Britain as the first major industrial power in the world, on the wings of the industrial revolution. Powered by British coal, Britain would emerge in the latter half of the nineteenth century as the dominant producer of iron in the world, which itself supported the growth and rapid development railway in Britain and the rest of the world. The textile industry of Britain also mushroomed, with significant export abroad, especially to India. Williams (1964, p. 15) made the point that British investments shifted from the West Indies to other parts of the world, namely, United States, Egypt and India, increasing nearly sevenfold between 1830 and 1870 from 110 million pounds to 700 million pounds. Significantly, Williams (1964, p. 15) asserts, “the colonies, India excluded, figured insignificantly in this tremendous upsurge”. The equalization of duties on sugar also precipitated the relative diminution of West Indian sugar. According to Richardson (2009), in 1747 Germany developed a process of extracting sugar from beet, whose production was given a significant impetus during the Napoleonic Wars of 1803–1815, when trade between Europe and her colonies in the New World was disrupted by the British blockade. The blockade incentivized Europe to aggressively develop its beet sugar industry. With the passage of the Sugar Duties Equalization Act in 1846 therefore, Europe was ready to pump sugar into the prized British market. Williams (1964) demonstrated clearly the precipitous fall of Jamaican sugar exports to Britain vis-à-vis German exports. While Jamaica was

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the principal supplier of sugar to Britain in 1839, by 1880 Jamaica was replaced by Germany. Williams (1964, p. 17) goes on to paint a graphic picture: “in 1853 British imports of 1,476,000 tons of sugar had been supplied, 14% by beet sugar, 17% by British cane sugar, 69% by foreign sugar. In 1880 Britain’s imports had increased to 3,278,000 tons—of this 43% was beet sugar, 11% British cane, 46% foreign sugar”. Richardson (2009, p. 51) reinforced this decline of cane sugar in world sugar production, showing that between 1840 and 1899 world sugar production increased from 1 million metric tonnes to just over 8 million metric tonnes, with the share of cane sugar declining from approximately 95 to 35%! Clearly emancipation, liberalization and the rise of beet sugar production in Europe were converging to erode the hegemony of British imperial sugar generally, and the enviable position of Jamaica being the leading exporter of sugar in the world by the mid-eighteenth century. According to Williams (1964) sugar production in Jamaica declined from 39,400 tons in 1839 to 16,800 tons in 1880. The Jamaican sugar industry was in ‘free fall’. What will save the industry?

The Institutionalization of a Preferential Trade Regime The planter class, which had vested interest in the preservation of the plantation system, did not take the assault on sugar’s hegemony lying down. In fact, as Lloyd Best pointed out in his characterization of the plantation economy system, when the system is challenged, its proponents resort to political lobbying for relief and survival. It has already been established that Britain’s foray into the colonization of the New World was driven principally by her political ambitions of imperial expansion and to challenge the head start that Columbus provided the Spanish Crown, which sponsored his ‘discovery’ of the New World. The establishment of the plantation system in the Caribbean by Britain, firstly in Barbados and later in Jamaica, on the basis of slave labour and mercantilism, was “wasteful, inefficient and expensive”, Williams (1964, p. 4). That this experiment continued relentlessly from the midseventeenth century onwards, was driven principally by the alliance of the planter class and the Crown, which were the main economic beneficiaries of this enterprize. From the get go therefore, the entire plantation

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system could not have survived without the British Government actively and deliberately creating the environment for it to survive. The earliest form of this support and facilitation was the institution of mercantilism, under which according to Richardson (2015, p. 65), “the terms of competition [was] stacked in favour of those loyal to the crown”. Richardson (2009, p. 58) made this point in another way: “The Atlantic circuit was tightly orchestrated by political elites of the Old World who attempted to confer national monopoly status on those engaged in the trade”. The plantation system did not only depend on the crown for its initiation, the crown was called upon at every instance of challenge, to bail out the enterprize. The challenge of emancipation was met with successful advocacy of planters for compensation, which amounted to some two million pounds in 1833, which Richardson (2009, p. 53) suggests was “equivalent to an astonishing 5% of national GDP at the time”. Not only did this handsome compensation enable the planters to import indentured labour from the Far East, but they successfully negotiated a six year extension of forced labour between 1834 and 1840, euphemistically referred to as apprenticeship, ostensibly to serve as a transition period to full freedom. The Sugar Duties Equalization Act evoked significant protests among the planters, who felt they were betrayed by the British Parliament. Green (1993). However, through the colonial administration in the colonies, every effort was made to discourage independence and diversification among ex-slaves and to keep them on the plantation. Bolland (1981) pointed to the efforts of planters to safeguard their supply of labour by tying ex-slaves to the plantation through the provision of estate housing or farming plots or accumulation of debts, especially in the smaller territories, where lands were scarce. Mintz (1985, p. 70) describes these efforts by the planters as an attempt to “re-create pre-emancipation conditions – to replace the discipline of slavery with the discipline of hunger”. In the larger territories such as Jamaica, these attempts were less successful, as ex-slaves in large numbers chose to establish farming plots on marginal lands outside the estates. This represented a sustained effort to establish their independence and reinforce their newly won freedom through entrepreneurship, referred to by historians as the peasantry. Williams (1964) meticulously documented the attempts by the planter class in collaboration with the colonial administration to denigrate the

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ex-slaves as lazy, deny their contribution to diversification and to undermine and frustrate their efforts to access fertile lands. Notable also was the lack of action on the part of the colonial authorities to create what Harrison (2001) describes as “the basis of a civil society”. Drawing on the writings of Sewell, Williams (1964, p. 71) described the social neglect of the freed slaves: The people of Jamaica are not cared for; they perish miserably in country districts for want of medical aid; they are not instructed; they have no opportunities to improve themselves in agriculture or mechanics; every effort is made to check a spirit of independence, which in the African is counted a heinous crime, but in other people regarded as a lofty virtue and the germ of natural courage, enterprize and progress.

In the meanwhile, the economic structure of the island remained largely unchanged, as according to Mintz (1985, p. 72) “they continue to import the bulk of their finished goods, and, often, have even increased their importation of food”. It was the social neglect and the institutionalized and orchestrated attempts of the planter/colonial administration alliance to frustrate the efforts of the ex-slaves to build their economic independence and realize their full potential and freedom, which triggered the Morant Bay Rebellion of 1865. It was these conditions and the horrors and brutality associated with the suppression of the Morant Bay Rebellion that prompted the British Government to establish the Royal Commission of Enquiry in 1897. The 1897 West India Royal Commission of Enquiry highlighted the appalling levels of rural poverty in Jamaica and called for some form of land reform to improve the prospects for “moderate prosperity and political stability”. Richardson (2007), however, indicated that the Commission added a caveat that this process should not result in the exslaves abandoning the plantations. Significantly, the said Commission of Enquiry called for Britain to advocate for the reduction of support to beet sugar growers in Europe, so as to give the struggling sugar industry in the West Indies a fighting chance and confirming that the interest of the Commission was more aligned to the interest of the plantation and its survival, than the interest of the ex-slaves. The industry in Jamaica gained a breathing space with the commencement of the phasing out of European subsidies for beet sugar in response

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to the recommendation of the West India Royal Commission of Enquiry of 1897. The destruction of Europe’s beet sugar industry during the First World War provided a significant impetus to the sugar industry in Jamaica as a result of rising prices. According to Harrison (2001), by 1917, sugar production in Jamaica rose to 32,000 tonnes, coming from 5000 tonnes in 1913. At the same time, there was considerable concentration of production through a series of mergers and acquisitions among estates. According to Harrison (2001), around the post-World War I period, sugar production exceeded consumption levels worldwide, thereby depressing prices. The growth in production in turn was associated with high levels of subsidies in a number of sugar producing countries of the North, which enabled their farmers to export at prices below the cost of production. In the meanwhile, many of the main sugar producing countries such as Cuba and the Dominican Republic enjoyed special preferential access to the United States market. These events had a devastating impact on the price of West Indies sugar export and triggered strong lobby by West Indian planters in England for the British Government to save the sugar industry in the West Indies. The British Government responded by setting up the West Indian Sugar Commission of Enquiry of 1929–1930. The Commission of Enquiry recommended a tariff and subsidy regime in Britain that would protect imperial sugar. This included the purchasing of imperial sugar at a price above the cost of production in the West Indies and the imposition of a duty regime applied to non-imperial sugar, as well as appropriate tariff protection in the colonies to discourage the importation of other sugar. The recommendations of the 1929 West Indian Sugar Commission marked a significant turning point in the marketing of West Indian sugar in terms of preferential access to the British market. In addition to this, local sugar manufacturers, by virtue of Law 26 of 1929, were given the exclusive right to market all sugar consumed in Jamaica, the profits from which activity was expropriated by the said manufacturers. This dual protection in terms of preferential access to Britain and control of local sugar sales virtually kept local sugar manufacturers in business, without any incentive to modernize and increase efficiency, as preferential prices to Britain covered cost of production, freight, depreciation, and profit. This predictability caused considerable expansion in local sugar production from 55,596 tonnes in 1929 to 156,502 tonnes in 1941, according to Harrison (2001).

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The 1929 preferential system according to Harrison (2001) was basically carried over into the Commonwealth Sugar Agreement of 1953, which was the framework within which Britain participated in the International Sugar Agreement (ISA) of 1953, to stabilize the price of sugar in the face of international volatility and basically remained intact up to 1973 when Britain joined the European Economic Community (EEC). On joining the EEC, this arrangement was transformed, at the insistence of Britain, into the Sugar Protocol of the LOME Convention, under which ACP countries could export sugar to the EEC at preferential prices and on a quota basis. LOME was later replaced by the Cotonou Agreement in 2000. In both instances, the duration of the sugar protocol was deemed “indefinite”. The ISA and the series of bilateral preferential arrangements for trading in sugar described above, highlight the strategic importance of sugar as a commodity globally. According to the 1960 Commission of Enquiry on the sugar industry in Jamaica, “sugar is a commodity subject to agreements and controls which affect output, exports, markets and prices” (Goldenberg Commission, 1960, p. 3). Harrison (2001) described the world market for sugar as a “misnomer”, as less than a quarter of the global production is traded on the world market. Most trading occurs under preferential arrangements and the world market serves as a dump for excess production. The preferential arrangement enshrined in the Commonwealth Sugar Agreement served Jamaica well from the standpoint of expansion of production. According to Harrison (2001), if in 1950, sugar production was 271,582 tonnes, by 1959 production rose to 378,255 tonnes. The decade of the 60s represents the golden years of sugar production, with production consistently above 400,000 tonnes, peaking at 514,000 tonnes in 1965. This massive expansion in production was without a doubt driven by the remunerative prices embodied in the Commonwealth Sugar Agreement and its forerunner 1929 Bilateral Agreement, as they shielded Jamaican producers from the volatility and generally lower level of prices characteristic of the world market. Unfortunately, the expansion of sugar production, supported by high price and guaranteed export quantities was not accompanied by reinvestment in factory modernization, mechanization of field activities, and better cultural practices. According to the Mordecai Commission of Enquiry of 1966, between 1960 and 1965, 50% of the estates were spending less than 67% of the industry charges for depreciation

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(Mordecai, 1967). Not only were factories not being modernized, but existing equipment and plant were not being properly maintained. This, understandably, contributed to the decline of factory efficiency and high operational cost. Artificially high prices in preferential markets, nurtured over many decades while having the effect of expanding production, had two other major effects, apart from trade distortion. They discriminated against efficient producers in countries which were not part of these arrangements. Furthermore, taxpayers in the importing countries faced the burden of buying high priced sugar. The emergence of global free trade in the latter years of the twentieth century, reinforced by the formation of the World Trade Organization (WTO) was bound to challenge the legitimacy of the preferential arrangement. In 2003, Australia, Brazil, and Thailand successfully challenged the legality of the EU sugar regime, within the WTO. This precipitated a reform of the EU sugar regime, manifested inter alia, in a 36% cut in the price of the ACP sugar exports, to be effected between 2006 and 2009.

Conclusion The origins, evolution and development of the sugar industry in Jamaica, since the days of European settlement in the sixteenth century into the post-World War 2 period, are entirely consistent with all the features of Lloyd Best’s Plantation Economy Theory. From the very beginning the system was set up on a monoculture basis, with an exclusive export orientation, to satisfy the demand of the Metropole for sugar. The Planter class, often resident in Britain, expropriated all the profits and the Crown benefited immensely by the contribution of the system to its treasury and the realisation of its expansionist political ambitions. At the same time, the development of the hinterland was completely neglected, as the bulk of the colonial population constituted African slaves. The consumption needs of the colonies were satisfied almost wholly by importation from the Metropole. The plantation system in Jamaica grew rapidly and flourished over the first 100 years of British colonialism, ably supported by British mercantilist legislation, protectionist fiscal policies and a steady flow of African slaves. In the process, the system made a remarkable contribution to the financing of the emerging industrialization of Britain and as an ‘agroindustry’ provided valuable lessons to the emerging capitalism in relation

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to the organization of labour and the integration of field and factory operations into a seamless enterprize. The system however, was not sustainable. It was inefficient, wasteful and expensive, benefitting only a small class of people, who were in fact subsidized by the British consumers, who were denied access to the cheapest source of the commodity, which was now an essential part of their daily diets. The persistent march of free trade sentiments and rapid industrialization continued to expose the vices of the plantation system, and eventually triumphed over it, with the abolition of slavery in 1838, the 1846 enactment of the Sugar Duties Equalization Bill and the repealing of mercantilist legislation. The emergence of technology in Germany to extract sugar from beet and the subsequent rapid expansion of beet sugar production in Europe around this same time, only cemented the doom of the West Indian sugar enterprize. Consistent with Best’s theory of the plantation economy, when the system is challenged, its proponents resort to political lobbying. The lobbying of the planter class paid high dividends, with a very handsome compensation pay at emancipation and active collaboration by the colonial authorities to frustrate the efforts of freed Africans to flee the estates and establish their independence. Above everything else, the plantation system survived in the post-emancipation period through the support of the British Government to institute through bilateral and other arrangements within a multilateral framework, a system of preferential markets for Jamaican sugar. The preferential markets boosted sugar production in the immediate pre-independence period. However it encouraged complacency, with little or no investment in factory retooling and improvement of field productivity. At the same time, those who work in the industry remained poor, and the social and environmental conditions of their communities degraded. Question is, how will the newly independent Jamaica seize the opportunity of this new beginning to reshape the industry in a sustainable way?

References Bolland, O. (1981). Systems of domination after slavery: Control of land and labour in the British West Indies after 1838. Comparative Studies in Society and History, 23(4), 591–619. Coote, B. (1987). The hunger crop. Oxfam.

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Galloway, J. (1989). The Sugar Cane Industry: An historical geography from its origins to 1914 (Cambridge Studies in Historical Geography, number 12). Cambridge University Press. Gillespie, J. E. (1920). The influence of oversea expansion on England to 1700: Columbia University studies in history, economics, and law (Vol. 91). Colombia University Press. Green, W. A. (1993). British slave emancipation. Oxford University Press. Harrison, M. (2001). King sugar: Jamaica, the Caribbean, and the world sugar industry. New York University Press. Mintz, S. W. (1971). The Caribbean as a socio-cultural area. In M. Horowitz (Ed.), Peoples and cultures of the Caribbean (pp. 17–46). The Natural History Press. Mintz, S. W. (1985). Sweetness and power: The place of sugar in modern history. Penguin Books. Mordecai, J. (1967). Report of the Sugar Industry Enquiry Commission (1966) Jamaica. Kingston Jamaica. Polopolus, L. C. (2002). World sugar markets and entangled government programs. In A. Schmitz & T. Spreen (Eds.), Sugar and related sweetener markets: International perspectives. Wallingford, UK: CABI Publishing. Richardson, B. (2009). Sugar: Refined power in a global regime. Palgrave Macmillan. Richardson, B. (2015). Sugar. Polity Press. Richardson, B. C. (2007). The importance of the 1897 British Royal Commission. In J. Besson & J. Momsen (Eds.), Caribbean land and development revisited (pp. 17–28). Palgrave Macmillan. Thomas, R. P., & McCloskey, D. N. (1981). Oversea trade and empire, 1700– 1860. In R. P. Floud & D. N. McCloskey (Eds.), The economic history of Britain since 1700 (pp. 87–102). Cambridge University Press. Williams, E. E. (1944). Capitalism and slavery. University of North Carolina Press. Williams, E. (1964). British historians and the West Indies. A&B Publishers.

CHAPTER 4

The Sugar Industry Post-Independence

Introduction As established in Chapter 3, the emancipation of slavery in 1838 combined with the triumph of free trade and the rise of capitalism in Britain, as well as the increasing competition from European beet sugar, inflicted a near mortal wound on the sugar industry in Jamaica. The latter half of the nineteenth century represented dark days for the industry. The persistent lobbying of the planter class however, resulted in the eventual constitution of the 1897 Commission of Enquiry, which inter alia, recommended that Britain imposed protectionist duties on European sugar imports. This development, coupled with World War 1, which ravaged beet sugar production in Europe, gave the industry in Jamaica a new lease on life. The institutionalization of a preferential trade regime by Britain in 1929 for colonial sugar, gave the Jamaican industry an additional boost. In the post-war period therefore, the near deadly wound inflicted on the industry in the latter half of the nineteenth century was healed. This period saw the most aggressive expansion of sugar production in Jamaica. This expansion however, did not carry along the workers at the base of the industry, and once again, the industry was serving the interest of those who invested in its expansion, whilst the black masses who laboured in it were receiving starvation wages and living in squalor. It was these social © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_4

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conditions that ignited the passion of the masses and led to widespread social unrest in Jamaica in 1938. Out of these 1938 disturbances was born the modern trade union movement in Jamaica. More significantly, these riots generated a political momentum that culminated in the formation of Jamaica’s two major political parties, universal adult suffrage and internal self-government in 1944 and eventually independence in 1962. In a very real sense, conditions in the sugar industry probably played a disproportionate role in the attainment of political independence in Jamaica. The hopes and aspirations of both the trade union and independence movements were to secure liveable wages for the working class and an improvement in their conditions of labour, as well as the transformation of the Jamaican economy and the building of a socially resilient and just society. How independent Jamaica treated the sugar industry would provide a major signal as to whether these dreams were being pursued and realized. After all, at the dawn of independence in 1962, the sugar industry was undoubtedly the most significant economic activity in Jamaica, completely vertically integrated, engaging some 60,000 hectares of lands, producing nearly 500,000 tonnes of sugar, accounting for 22.53% of export earnings and employing the most labour in the economy. Independence provided the opportunity for a young nation to transform the industry and place it on a more sustainable footing, through comprehensively addressing its social, economic and environmental dimensions.

The Facade of Prosperity in the 1960s The preferential market access, initiated in 1929, provided considerable impetus for the expansion of production in Jamaica. In 1929, sugar production stood at 55,596 tonnes (Harrison, 2001). This moved to 441,151 tonnes in 1961, the year before Jamaica gained Independence. Sugar cane production continued to increase in the years immediately following Independence, peaking at 514,000 tonnes in 1965. This phenomenal increase in sugar production between 1929 and the late 1950s was driven primarily by a concentration of production into fewer entities, as well as the infusion of foreign capital by multilateral corporations. If in 1930 there were 39 sugar factories in Jamaica with an average annual output of 1572 tonnes, then in 1944 this was reduced to 26 estates with an annual average output of 5842 tonnes. Feuer (1984).

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This concentration of production into fewer hands was accompanied by a dramatic change in ownership. Feuer (1984). According to Feuer (1984, p. 14), “out of thirty-nine existing estates in 1930, only three were foreign owned, and only six were corporate owned. Seven years later, however, British multinational Tale and Lyle purchased twenty-five farms in Jamaica. It also built Frome Sugar Factory, the largest in the island, in 1938. As a result, by the 1940s, Tate and Lyle had clearly established itself as a dominant force in the Jamaican sugar industry.” The domination of foreign ownership and investment in the sugar industry during this period is consistent with Girvan’s (1973) observation in Chapter 2, that the further modification of the pure plantation economy commencing in 1938, is characterized by multilateral corporations replacing the joint stock company as the owners of the sugar enterprize. It was similarly in this period that the Jamaican economy experienced it’s most dramatic diversification with the emergence of the bauxite mining industry, the development of tourism and the initiation of local manufacturing, based on the import substitution industrialization by invitation model. Particularly in the bauxite mining sector, the ownership of the industry was overwhelmingly foreign, and its operation reinforced Jamaica’s position as a supplier of raw material, as the aluminium from Jamaica’s bauxite ore was processed in the United States and Canada. The infusion of foreign capital resulted in the planting of new varieties of cane, increased use of chemical fertilizer, and modernization of factory operations. These investments had considerable impact on production and productivity, with cane yields increasing from 18t/acre on the large estates in 1927 to over 27t/acres in the 1939/43 period. Feuer (1984). Production increased from 55,596 tonnes in 1929 to 378,255 tonnes in 1959 (Harrison, 2001). Although production peaked in 1965 at 514,000 tonnes and remained above 400,000 tonnes on average throughout the remainder of the 1960s, these successes masked some serious deficiencies in the operations of the industry. According to Feuer (1984, p. 18), “productivity did not increase significantly after 1940. Cane yields, … increased only 14% over a twenty-year period.” Critically also, despite guaranteed export markets and prices, the industry was not making the requisite investments in the modernization and retooling of factories and replanting of fields beyond the early 1940s. This was cited in the 1966 Mordecai Commission of Enquiry, which

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stated that over two thirds of the estates were not making the requisite investments in capital replacements and maintenance of plant and fields. The contribution of inefficient factories, resulting in low sugar recovery, lengthening of the crop year, and poor factory utilization, coupled with relatively poor yields and relatively small scale of operations (compared to Cuba and the Dominican Republic), rendered Jamaica a very high cost producer. According to Feuer (1984, p. 18), “starting in the 1950s, the cost of producing cane on the estates escalated rapidly. Between 1954 and 1965 the total cost of production increased 68 per cent, while cane output rose only 10 per cent; costs were increasing at seven times the rate of production.” The reality was that by the mid to late 1960s, sugar estates were losing money at the level of field operations. That they remained in operation is related to the vertically integrated nature of estates’ operations, where the losses from sugar cane cultivation operations were offset by the profits generated in the more lucrative segments of the value chain—shipping, processing, and refining. The guaranteed market and relative high prices for their sugar exports in the British market, also shielded Jamaican producers from competition from the more efficient producers of Cuba, the Dominican Republic, Brazil, and Thailand etc. According to Feuer (1984, p. 24), beginning in 1965, Jamaica sugar estates were recording deficits each year, “with the net loss in 1970 reaching over $19M.” Monymusk Estates, operated by the West Indies Sugar Company (WISCO), lost over $4M on cane farming operations between 1967 and 1970. The unprofitability of cane growing activities was further compounded by the refusal of successive governments to entertain mechanized reaping, for fear of job losses, which would have had serious political and social implications. Levy (2000). Was Government taking the ‘path of least resistance’ by denying the sugar industry mechanization in order to keep a large number of people in sugar dependent communities in employment? Were the low wages in these jobs even able to keep this large pool of people out of poverty? It would seem that by resisting mechanization, the Government itself was perpetuating the very dependency engendered by the plantation system, by keeping the working class in the industry confined to low paying jobs and welded to poverty. One would think that the mandate of governments in the post-independence dispensation was to break the yoke of dependency in the industry, by promoting diversification in sugar growing areas and promoting greater efficiency in the industry, so that those dislodged by

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mechanization would be retrained to take on better quality jobs higher up in the industry and within a more diversified economy. In 1970, Tate and Lyle indicated its intention to give up cane farming operations in Jamaica. It was this situation which triggered the Government’s first intervention in the sugar industry as a significant player, purchasing the Frome and Monymusk cane farms, comprising over 60,000 acres in 1971 for US$8.4M. In the same year, the Government purchased the Bernard Lodge Estate from the United Fruit Company, a US multinational company under similar circumstances. The Frome and Monymusk farms were leased back to Tate and Lyle in the interim for continuity of operations, while the Government commenced operations of the Bernard Lodge Estates. All the acquired lands were entrusted to the Frome Monymusk Land Company Ltd. (FMLCo), a government company, for management. The Jamaica Labour Party (JLP), Government of 1962–1972, which purchased the Frome, Monymusk, and Bernard Lodge Estates from the Tate and Lyle and United Fruit Company respectively, intended to sell the said lands in parcels of 100–500 acres blocks to local farmers, consistent with a clause in the original purchase agreement with WISCO, where the Government committed to maintain the lands in parcels not less than 100 acres. This takeover by the Government was obviously motivated by the huge socio-economic dislocation that would have ensued, if such a large section of the industry ceased to operate abruptly. Actual sale of cane lands as per the plans of the JLP administration did not in fact materialize before that administration was swept out of office in the General Elections of February 1972.

Tate and Lyle Steps Out, Government Steps In: The Cooperative Experiment of the 1970s The new PNP Government’s approach to the utilization of acquired cane lands in Frome, Monymusk, and Bernard Lodge, was radically different from the planned approach of the previous Government. The main point of departure relates to engagement of these lands through a cooperativization process, on the basis of leasehold, rather than freehold. This approach was influenced largely by the philosophy and commitment of the People’s National Party (PNP), since its inception in 1938 and that of then Prime Minister Michael Manley to the development of cooperatives as the preferred mode of production in the rural economy, and as a vehicle

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to change social/class relations, and to empower the rural working class. The preference of leasehold tenure rather than freehold served to underline the PNP’s view of agricultural lands as having a ‘social function.’ Leasehold provided the Government with some control and leverage over the use of the lands and gave the sugar workers greater access, since it obviated the need to find substantial capital, which would have been required for acquisition. Such capital that would have been required for acquisition, was freed up to be used for working capital purposes. Consistent with its philosophy of worker cooperatives and leasehold tenure, the new PNP Government set out its policy objective in a Ministry of Agriculture Policy Paper entitled “Development of Frome/Monymusk/Bernard Lodge Lands in 1972”, “to establish a pilot project for the development, on a cooperative basis, of three blocks of cane lands, one on each of the three estates with provision for future expansion of cooperative ventures based on the pilot projects if these prove successful.” In the Government’s plan for the pilot cooperatives, FMLCo would play a central role in overseeing their formation and operation. The plan called for leasing 1000 acres blocks of land to individual farmers in parcels of 30–40 acres, the size deemed necessary to maintain viable cane production. These individual tenants would form a cooperative under a project manager. According to Feuer (1984, p. 36), FMLCo would provide “certain marketing and planning functions as well as marketing, input provision, and tractorage”. The plan was therefore for a gradual approach to cooperativization, centrally planned and managed by the Government through FMLCo. The Government committed to maintaining the said lands in cane production, with possible expansion of cane production (Feuer, 1984). This was critically important to Tate and Lyle, which up to that time still owned and operated the Monymusk Sugar Factory and Refinery, and the Frome Sugar Factory, which operation depended on a good and consistent supply of cane in order to maintain viability. What Tate and Lyle skilfully managed to do was to pass on the most unprofitable part of their operations—cane growing—to another party, while they continued to enjoy the benefits of a good and consistent supply of cane. This, however, portended economic disaster for the future cooperatives, as they would not have the benefit of ownership of the more lucrative factory, refinery, and shipping operations to compensate for the losses in cane growing, and expansion of cane growing operations meant

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growing cane on marginal lands, particularly large tracts of land affected by saline intrusion in the Monymusk area. Notwithstanding the development of a clear policy framework for the establishment of pilot cooperatives by the Manley Government soon after its ascension to power in 1972, there was a lull in respect to implementation for over five and a half months. Both Feuer (1984) and Frolander-Ulf and Lindenfield (1984) confirmed Levy’s (2000) account that it was the social activism of the Social Action Centre (SAC), a Jesuit NGO, in organizing and mobilizing workers on the three estates that forced the Government’s hands in implementing the pilot cooperatives. According to Levy (2000), SAC had been active in the Monymusk area since late 1972 working through the Monymusk Housing, which was formed to agitate for better housing conditions for sugar workers at Monymusk. The policy pronouncement of the formation of worker cooperatives to engage the sugar lands gave the SAC an opportunity to mobilize and organize workers on the three estates. Whilst the Government was in a state of inertia in relation to the implementation of the pilot co-ops, SAC was actively organizing and preparing workers on the three estates to take on this new role. Their intensive organization of workers led to the formation of the Sugar Workers Cooperative Council (SWCC) in Frome in October 1973 (Levy, 2000). It was in May 1974 that the new Board of FMLCo agreed to the setting up of three pilot cooperatives in time for the start of the 1975 crop. The implementation, however, would not be on the basis of individual leases of 30–40 acres, as previously contemplated, but to lease an entire farm (over 1000 acres) to all the workers on the existing farm as a single production unit. This had the advantage of not disenfranchising any worker in the process. This had the disadvantage though, of engaging marginal lands in these large blocks and preserving overstaffing which was estimated to be as high as 25% (Levy, 2000). The three pilots that started at the commencement of the 1974/1975 crop were Morelands in Monymusk, Barham in Frome, and Salt Pond in Bernard Lodge, comprising over 6000 acres of land on a 49 years lease involving over 500 workers. Buoyed by this historic victory in the establishment of the three pilot crops, the SAC and the SWCC intensified their efforts at lobbying Government for the conversion of the remaining farms on the three estates to cooperatives. There was a groundswell of support for full cooperativization by the sugar workers themselves, influenced significantly by the prospects of severance pay. According to Levy (2000, p. 116), “the

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interest was markedly materialist … An average J$2000 – then US$2200 – it was an event of a lifetime to a worker who had never held in his hand, more than a few dollars at a time”. According to Frolander-Ulf and Lindenfield (1984, p. 48), the “exceptionally high world market price for sugar during 1974, enabled the three pilot co-ops to show a profit during their first year,” and this was a significant factor in making the other workers wanting to join the cooperative movement. From a groundswell of workers support, translated into strident representation by the SWCC, in May 1975, the Government agreed to full cooperativization, subject to each farm meeting the necessary criteria of readiness for cooperative status and the feasibility of each farm established. SAC and SWCC stepped up their worker education campaign to ensure that the workers meet the readiness criteria. According to Levy (2000), in the second half of 1975, almost 400 workers’ leaders attended at least one of 18 courses organized by the SAC, running for up to five days. While feasibility was more intractable, both the SWCC and the SAC on the one hand, and the Government through the SIA and FMLCo on the other hand, recognized the danger posed by marginal and saline lands in the Monymusk area, with the latter promising improved irrigation support, as well as diversification to mitigate the risk (Levy, 2000). Crichlow (2005, p. 135), aptly summarized the factors that led to rapid cooperativization and the new optimism of the sugar workers and the risk of ignoring the feasibility criteria: Three developments, in particular, lent credence to the SWCC claims. First the success of the three pilot farms, Barham at Frome, Morelands at Monymusk, and Great Salt Pond at Bernard Lodge, doubled the mobilization efforts of the SWCC and hastened the pace of cooperativization at the expense of such precautions as economic feasibility assessments. Second, severance pay awarded soon after cooperativization became an unsubstantiated symbol of bountiful harvests to come. Third, the price of sugar on the global market rocketed. The future of cooperatives appeared auspicious.

In January 1976, all the government’s sugar lands on the three estates— Frome, Monymusk, and Bernard Lodge, representing some 45,000 acres of lands, were fully cooperatized. With this landmark development, some 5000 sugar workers controlled nearly 20% of all cane grown in Jamaica. It was truly a watershed moment, which should have augured well for the socio-economic transformation of the industry.

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The first intervention of the Government in the sugar industry could hardly be said to have been intended to effect transformation. In the first instance, the initiative was not the Government’s, with a view to effect socio-economic and environmental transformation, it was rather a response to multinational enterprises that were bent on giving up the most unprofitable segment of their business, whilst retaining the more lucrative parts. Seemingly, having acquired the over 60,000 acres of cane lands from the two multinational companies, the Government’s intent was to fragment these lands in parcels of 100–500 acres, to be sold to local farmers. This certainly would have excluded the overwhelming majority of the over 5000 workers in the industry and consolidate the position of larger cane farmers who could afford to purchase these large lots. By selling these parcels of lands, the State would have lost control over the use of these lands, some of which predictably would have ended up in housing developments. This would have affected the viability of sugar production in these three areas, due to loss of throughput of cane to the factories and would certainly not have advanced the welfare of majority of sugar workers. The situation was somewhat saved by the intervention of the new PNP Government in 1972 that took a deliberate decision to introduce pilot cooperatives, which could shift ownership to sugar workers in pursuit of Manley’s worker participation philosophy, as outlined in Manley (1974) and Manley (1975). The shift in policy from freehold tenure to leasehold was also a deliberate strategy to make participation by sugar workers easier. The overall objective of these policy shifts was to empower the sugar worker to have a more direct stake in the sugar enterprise. There was no deliberate or explicit objective of improving environmental management of the industry. Indeed, the agreement of the Government to even expand cane production in the Monymusk area reveals that there was little concern about the environment as these marginal lands that were intended to be reengaged were formerly abandoned due to saline intrusion caused from over-pumping in the aquifers. Laudable as the Manley regime’s objectives for intervention in the industry were, they were fraught with problems. In the first instance, from the very onset the cooperative experiment was doomed to failure, as the workers were offered the most unprofitable aspect of the sugar business with no recourse to the more lucrative segments of the industry that could cross subsidize losses in the cane growing segment. It is noteworthy that even when the Government acquired the factories from Tate and Lyle

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in 1976, they were not cooperatized, but managed directly by the State through the newly established National Sugar Company Ltd. (NSCL). The Government’s insistence on the cooperatives engaging marginal and saline lands, without delivering on its promise to improve irrigation infrastructure and facilitate diversification, meant that “the co-ops were … saddled, from the onset, with an uneconomic project in an industry which had been in decline from the previous two decades” (Levy, 2000, p. 118). The cooperative experiment is a clear demonstration of the persistent gap between policy pronouncement and the capacity of the state to implement. The Government entrusted the FMLCo to implement its cooperativization experiment without appropriately restructuring that entity to execute that role. The FMLCo was the entity created by the previous Hugh Shearer administration to manage the lands acquired by government from the multinationals in 1971. The intent was then to sell the lands in parcels of 100–500 acres to recoup the $8M spent by the Government for the acquisition. A radical change in policy intent from sale of lands to creation of co-ops, should have been accompanied by a radical change in the structure and orientation of FMLCo. All major accounts of the cooperativization experiment—Feuer (1984), FrolanderUlf and Lindenfield (1984), Levy (2000) and Crichlow (2005) copiously documented the systematic hostility of the Board of FMLCo and its staff and to frustrate the cooperativization process, rather than facilitate. The commencement of implementation of the policy was forced by the agitation of the SAC and the SWCC, rather than the proactiveness of the FMLCo. The cooperativization experiment which lasted from 1974 to 1981 was largely a failure in both social and economic terms. The prospects were bright at the beginning for the workers as they were in receipt of severance payment of amounts between $550 and $2000, which according to Frolander-Ulf and Lindenfield (1984, p. 73), “for most members, was the largest sum of money they had ever seen in their lives”. Frolander-Ulf and Lindenfield (1984) pointed to the expansion of houses, acquisition of furniture, livestock, and motor cycles that this windfall facilitated. Quoting from a survey conducted by Professor Carl Stone, Frolander-Ulf and Lindenfield (1984) also pointed to the job enrichment that cooperativization offered, as the sugar workers had to take on a range of tasks in managing their new enterprise. A guaranteed three days of work in the out of crop season was also a major benefit to the sugar workers under the co-ops. However, the fundamental relationship between workers, the

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new owners of the estates, and clerical/administrative staff in FMLCo, which was retained from the Tale and Lyle administration, and were now executing the major administrative functions on behalf of the coops, was decidedly antagonistic. The administrative/supervisory staff who formerly worked with Tate and Lyle still saw the sugar workers who they formerly supervised, as below them, and could not reconcile with the reality of them being owners. This was the major source of hostility towards the cooperatives from FMLCo. The workers’ efforts at making their cooperatives work were, therefore, systematically undermined and frustrated since the co-ops relied on the SIA for financing and the FMLCo for management services, such as accounting, payments, human resources management, and so on. The members of the co-ops had little opportunity to change the classist hostilities. From an economic standpoint, the co-ops were not successful. An analysis done by Frolander-Ulf and Lindenfield (1984, p. 72) showed that cane production at Frome declined by 4% on average between 1965 to 74 (before the co-ops) and 1976 to 80 (the co-op years), with corresponding decline in productivity of 6.25%. The corresponding figures for Monymusk were 30.5% decline in cane production and 13% decline in productivity. The situation in Monymusk was aggravated by the engagement of marginal and saline lands. The Bernard Lodge figures were 2.3% decline in production and 3.6% decline in productivity. According to Feuer (1984) and Frolander-Ulf and Lindenfield (1984), the overall causes for the economic losses stemmed generally from higher costs of production and factory inefficiencies. The high cost production relates to overstaffing as all sugar workers who were members of the coops, were provided work. Also, in contrast to the Tate and Lyle era when field workers were laid off after harvesting, all workers under the co-op were guaranteed three-days’ work. Under Tate and Lyle, the factories organized operations on their cane farms for harvesting between Mondays and Fridays, in order to avoid overtime payments, while processing independent farmers’ cane on weekends. In the co-ops, the workers insisted on weekend work to increase their earnings, without reference to impact on the profitability of the co-op, of which they were owners. Similarly, while the workers owned the co-ops, they continued to be members of trade unions, and demanded similar wage increases to what obtained on non-co-op estates.

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Restructuring in the 1980s to the 1994 Divestment While the Government handed over 45,000 acres of lands to some 5000 sugar workers to grow sugar cane in 1976, under the cooperative experiment, the ownership and management of the manufacturing side of the industry remained in private hands up to 1976. In 1976 the Government acquired the Frome, Monymusk and Bernard Lodge Sugar factories and their operation was entrusted to the newly formed (NSCL). In 1981 the entire cooperative experiment was terminated by the new JLP Government, and the cane lands passed over to the NSCL for operations. Between 1975 and 1985, the NSCL acquired and operated some eight sugar factories from their private owners, who were facing severe financial hardships. According to Brown and O’Connor (1982) in their unpublished master’s thesis, entitled “The National Sugar Company of Jamaica—Formulating a Strategic Plan,” the WISCO factories of Frome and Monymusk in 1975, Grays Inn in late 1975, Bernard Lodge in 1976, Sevens Estate in 1977, Long Pond, Duckenfield, Holland, and Innswood in 1978 were all acquired by default, primarily to avert the social impact of unemployment if these factories were allowed to close. Brown and O’Connor (1982) further pointed to the acquisition and operation of distilleries at Monymusk, Long Pond, and Innswood; sugar warehouses, as well as two shipping facilities for sugar in Clarendon and Westmoreland. With these acquisitions, by 1980, the Government of Jamaica owned eight of the 12 sugar factories in Jamaica, which gave it controlling interest in the Sugar Manufacturers Corporation of Jamaica (SMCJ)1 and the Sugar Producers Federation (SPF).2 Having acquired the Monymusk, Long Pond, and Innswood distilleries, through the NSCL, the Government moved to rationalize its rum producing activities by transferring its rum interest to the National Rums of Jamaica Ltd. (NRJ), a subsidiary of the NSCL, in 1979. Through the NRJ, the Government controlled 45% of the rum industry with the other 55% owned by private interests, notably Wray & Nephew Ltd. and

1 SMCJ was incorporated in March 1974, representing all estates manufacturing sugar in Jamaica. It is funded by a cess paid by all members and generally speaks for all sugar manufacturers. 2 SPF was registered as a Trade Union in April 1971 for manufacturers and engages the Trade Unions representing labour in the industry in industrial relations matters, especially wage negotiations.

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Hampden Estates Ltd. All the rum interests formed the Spirits Pool Association (SPA), through which all Jamaican rums were marketed. The SPA owned the Caribbean Molasses Limited (CML), a subsidiary responsible for marketing molasses. Government’s management of the sugar industry has been characterized chiefly by its failure to effect retooling of the factories and replanting of fields and installation of critical infrastructure such as irrigation in a timely fashion. This is not surprising, because within a five-year period (1975–1980), the Government moved from being a mere regulator of the industry to the major operator, spanning sugar cane cultivation, manufacturing of sugar and rum, as well as operation of warehousing and shipping facilities. All these operations were losing money before Government’s intervention and did not benefit from any serious injection of capital or management expertise after acquisition. It is, therefore, not unexpected that Brown and O’Connor (1982) pointed to the fact that every single subsidiary of the NSCL recorded losses for every single year they operated since acquisition by Government, with accumulated losses for the group amounting to $82M by 1980. By 1985, it was clear that NSCL factories required critical investments in both factory and field operations. This prompted the Government to approach the World Bank in 1985 for a loan to rehabilitate these factories, starting with the Frome, Monymusk, and Bernard Lodge factories. Naturally, World Bank loan came with conditionalities. The loan conditionalities required a restructuring of these factories. According to a National Investment Bank of Jamaica, (NIBJ), report entitled “National Investment Bank of Jamaica Sugar Privatization: End of Project Report ” (1994), the operations of Frome and Monymusk, then under the National Sugar Company Ltd., were brought under the Jamaica Sugar Holdings Ltd. in 1985. The Jamaica Sugar Holdings Ltd. in turn entered into a management contract with Tate and Lyle for the operations of these estates. As part of that arrangement, the Government of Jamaica assumed some $200M in debt to give the new managers a clean slate. The US$40M World Bank loan was intended to rehabilitate both field and factory operations. The loan, although borrowed by the GOJ was on-lent to the Jamaica Sugar Holdings Ltd., owners of Frome and Monymusk Estates. The World Bank also insisted on separate accounting of the proceeds of sale of sugar and molasses, which was then being carried out by the SIA. The cane farmers and manufacturers formed the Jamaica Cane Product

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Sales Limited (JCPS), owned jointly by the All Island Jamaica Cane Farmers Association, (AIJCFA) and the Sugar Manufacturers Corporation of Jamaica (SMCJ), and incorporated in 1986. This company had the responsibility to sell local sugar to Jamaica’s export markets, as well as the importation of raw sugar for local consumption. This was carried out by JCPS under an agency agreement with the SIA. By the time of the 1993 divestment of Government’s holdings in the sugar industry, the GOJ owned factories were operating in the main at a loss, despite the capital injection of the World Bank loan for rehabilitation at Frome and Monymusk. According to the NIBJ Report (1994, p. 47), the four estates that were then up for divestment had the following financial performance between 1985 and 1992: • • • •

Monymusk—Losses in 7 of 8 years Bernard Lodge—Losses in all 8 years Frome—Losses in 4 of 8 years Long Pond—Losses in 3 of 8 years

Despite the Government absorbing $200M debts of Frome and Monymusk in 1985, before Tate and Lyle commenced its management of these estates, the four estates in question chalked up accumulated losses of $543.5M, according to the NIBJ Report (1994, p. 46). The NIBJ Report asserted that in addition to accumulated losses, and “despite all this, it was clear that without substantial capital injection for improved efficiencies, once again the industry could not realize its full potential” (1994, p. 47). The rationale for the second round of intervention in the sugar industry seems not to be exclusively driven by the immediate financial burden on the Government operating these entities. From as early as June 1990, the new PNP Government tabled Ministry Paper 34 in the Houses of Parliament detailing a number of public sector entities to be privatized, including the Government’s sugar assets. According to NIBJ Report (1994, p. 1), work on the divestment exercise commenced in 1991, with a review of “the issues and constraints to privatization and the broad strategy to be adapted by government in privatizing the industry”. These issues essentially surrounded the governments’ regulatory framework for the industry within the context of the

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GOJ’s stated policy of privatization, market-led economy, and liberalization, and how these would impact the industry. Concomitant with the review of the regulatory structure of the industry, work similarly commenced in September 1991, on the review of the operations of the four estates stated for divestment and valuation of assets. On the basis of the preliminary assessments outlined above, the Prime Minister in September 1992 appointed an enterprise team chaired by the Chairman of the NIBJ to undertake enterprise consultations with industry stakeholders, with a view to “arrive at a methodology for privatization that was broad-based in ownership, sensitive to the needs of the communities in which the estates operate, and capable of ensuring improved labour productivity, improved factory efficiency and increased production” (National Investment Bank of Jamaica Report, 1994, p. 4). It is interesting to note that while the economic objectives were clear, the social objective was nebulous and the environmental non-existent. The consultations with industry interests on the privatization framework addressed issues relating to the regulation of the industry, the commercial management of the industry, the methodology for privatization and the interests of workers. The NIBJ Report to the Prime Minister entitled: “Regulatory Framework and Methodology for Privatization of Sugar Entities ” (October 1992), indicated consensus among all stakeholders regarding: • • • •

the need for a regulatory body centralized marketing of sugar centralized importation of sugar maintenance of the Sugar Industry Research Institute (SIRI), funded by the industry • a cane price committee to recommend of the split of revenue between farmers and manufacturers In relation to the privatization methodology, the NIBJ Report (1992) outlined consensus on lease as the preferred method of divestment of cane lands—as opposed to sale, broad based ownership of the industry, including the general public, and not tying redundancy entitlements to worker investments in the industry, as occurred under the cooperativization exercise. The main issue for the trade unions was the payment of redundancies, consequent on divestment and the use of a portion of the

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proceeds of the divestment to address workers’ housing, training, and other welfare matters. It was agreed that the redundancy issue would be addressed according to existing laws. According to the NIBJ Report (1994), under the above privatization framework, advertisements inviting proposals were launched in the media on June 7, 1993. At the close of the receipt of proposals on August 13, 1993, some ten proposals were received in respect of the four estates up for privatization. At the end of the evaluation of bids, it was recommended and the Cabinet approved negotiations with the Sugar Company of Jamaica (SCJ), the preferred bidder in respect of the Frome, Monymusk, and Bernard Lodge Estates; and Long Pond Sugar Company Successors, in respect of the Long Pond Estate. The NIBJ Report (1994) detailed the following results of negotiations with the two preferred bidders in respect of Frome, Monymusk, and Bernard Lodge on the one hand, and Long Pond Estate on the other hand: 1. sale price for the factories (Frome, Monymusk, Bernard Lodge and Long Pond) $1.4B 2. lease income of $25M per annum, renewable every 5 years over 49 years 3. 24% equity by GOJ in the Sugar Company of Jamaica, in addition to 10% share ownership by workers and 15% share ownership by farmers, both held initially by the GOJ to be sold subsequently to workers and farmers 4. sale by the purchasers to the Government of between 30 and 50% of new foreign exchange earnings from the preferential sugar quotas over a five-year period.3 5. investment of $1.3B in capital improvement over 5 years, allowing for achieving the target of 300,000 tonnes of sugar per annum and the engagement of 50,000 acres.

3 Although the sugar was produced by privately owned sugar companies, under the Sugar Protocol of the LOME Convention, the contract for the supply of sugar to the EU was between Government of Jamaica and the EU (UK specifically). The Government was seemingly using this leverage to force private manufacturers to sell them foreign exchange from sugar exports.

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6. Tate and Lyle agreed to the release of their claim of e850,000, occasioned by the GOJ breaking their management contract, consequent on the divestment of Frome, Monymusk, and Bernard Lodge.4 7. The Sugar Company of Jamaica comprising Frome, Monymusk, and Bernard Lodge would benefit from the management and technical expertise of Wray and Nephew Limited, owners of the successful Appleton Estates, and Tate and Lyle, partners in the Sugar Company of Jamaica consortium. The involvement of Manufacturers Merchant Bank in the Sugar Company of Jamaica, as well as Pan Caribbean Merchant Bank, Island Life and Corporate Merchant Bank in the Long Pond Sugar Company Successors, promised sound financial backing of both divestments deals. The above divestment terms were approved by the Cabinet on December 14, 1993, with the new owners assuming ownership of the assets on December 29, 1993. In addition to the divestment of Frome, Monymusk, Bernard Lodge, and Long Pond Estates, another 15,000 acres of land were to be leased to cane farmers under Phase II of the divestment exercise. According to a NIBJ Sugar Privatization Phase II Report, in 1995 some 33 parcels of lands ranging in size from 76 to 550 acres should have been leased to cane farmers in that year, with the full divestment of all cane lands to be completed by 1998. The SCJ, the new owners of the Frome, Monymusk, and Bernard Lodge Estates, operated these assets from the 1993/94 crop year to the 1997/98 crop year, with the government reacquiring control in 1998 for one dollar plus a $2.8B liability. Nothing in the literature has been found on the reasons for the failure of this divestment effort. However, interviews with industry experts, who were connected with the industry at the time, have proffered several views. Industry experts interviewed indicate that the SCJ is believed to have invested $25M in field and factory improvements, even though this figure has not been verified by the Government. It would seem though that 4 Recall that up to the time of the divestment, Tate and Lyle had a management contract to operate Frome, Monymusk and Bernard Lodge Estates on behalf of the Government. That contract having been disrupted by the divestment, entitled Tate and Lyle to compensation of 850,000 pounds sterling. This claim was however aborted by virtue of Tate and Lyle’s inclusion in Sugar Company of Jamaica Limited as a partner.

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there was evidence of capital expenditure notable in the installation of elaborate irrigation infrastructure at Monymusk. Between 1993/94 and 1995/96 crop years, there was an approximately 8% increase in production in the industry, and a corresponding 28% increase in production in the divested estates. During this period, therefore, the divested entities were driving increased production in the industry, significantly through increased throughput of cane (26%), in their factories. For the same period, the divested entities moved their share of the industry’s production of sugar from 60.5 to 71.3%. However, throughout the period, the divested entities lagged behind the rest of the industry with respect to efficiency, as evidenced by the TC/TS ratio, that is, the quantity of cane it took to produce a tonne of sugar. Industry experts have pointed to the fact that the Government of Jamaica, which was a 49% shareholder in the enterprise did not inject any equity at all. The private shareholders, it has been reported, consistently urged the GOJ to inject some equity to maintain its share in the company in light of the $25M purported to have been invested by them, but this was not forthcoming. In fact, senior officials of the SIA have indicated that the Government for most of that period failed even to name its two directors to the SCJ Board. Experts also pointed to the dramatic fall in the export price in the British market, falling from £449 per tonne of sugar in 1996 to £389 per tonne in 1997. This is corroborated by the drop in the price per tonne sugar paid to the industry, which fell from $20,564 per tonne in the 1995/96 crop year to $17,190 in the 1996/97 crop year, a drop of 16%. The drop in the price of sugar was further compounded by a revaluation of the Jamaican dollar in December 1996 from J$40:US$1 to J$32:US$1, which significantly affected the industry’s earnings. This is a significant development under the divestment agreement, as SCJ was contractually obligated to sell the Government between 30 and 50% of new foreign exchange earnings from the preferential sugar quota over a five-year period. Undoubtedly, the twin developments of the drop in the export price and the revaluation of the Jamaican dollar significantly impacted the performance of the industry. Between 1995/96 and 1997/98 crop years, sugar production declined by 21.8 and 17.5% respectively in the industry overall and in the divested estates. This period exactly coincides with the immediate post 1996 period when revenue

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per tonne of cane dropped sharply by 16%. It is significant to note, though, that even in this period of adversity, the divested entities not only performed better than the rest of the industry, but actually increased its share of production from 71.8 to 75.6% Officials of JCPS confirmed that the sharp decline in the export price between 1996 and 1997 resulted in a drop in revenue for the industry of some $960M. This prompted a group of cane farmers to approach the Government for a loan of nearly $1B, to be repaid over a four-year period from any excess revenue above a payout of $20,000 per tonne of sugar. The industry was, however, to earn less than $20,000 per tonne sugar up to 2002/3 crop year. Given the commendable performance of the divested entities between 1993/94 and 1997/98 crop years, relative to the rest of the industry, and the fact that the new entities acquired the estates debt-free, it is difficult to understand how by 1998 the entities could have racked up debts in the amount of $2.8B. This should be the subject of further research. What was the value and scope of the investments made by the new entities, as per their development plans? What was the post divestment monitoring mechanism put in place by the Government to ensure that divested entities deliver on their investments commitments? Why did the Government not further divest the 25% shares held for workers and farmers respectively? What equity did the Government put in the enterprise, and when? Finally, what role did the Government’s directors on the Board of the SCJ Limited play in ensuring the prudent management of the enterprise?

Conclusion Overall, the Government’s first intervention in the sugar industry was reactionary and not a deliberate strategy to effect sustainable socioeconomic changes in the sector or in the sugar dependent communities. The placing of 60,000 acres of cane lands in the hands of sugar workers through the cooperatives was meant to be an experiment in empowering these workers. This experiment was, however, doomed to fail because of lack of attention to economic viability, lack of a coherent implementation strategy, systematic destabilization by FMLCo, and above all the absence of a reorientation of workers attitude. Clearly, the approach did not seek to address existing environmental issues, but rather exacerbate them by engaging hundreds of acres of marginal lands, which also contributed to the poor economic results.

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Concomitant with the Government’s assumption of the cane growing operations of Tate and Lyle and United Fruit Company, and the subsequent handing over of those lands to worker cooperatives, there was a spate of financial failure across a significant portion of the industry in the mid-1970s. Through the National Sugar Company Limited, Government took over the factory operations of the Frome, Monymusk and Bernard Lodge, as well as a number of other privately owned estates, as well as distillers and shipping facilities. This partial financial crash of the industry which invited Government’s take over, made the Government the major player in the industry by 1979. Government’s involvement did not result in major investments in the industry nor the infusion of new technical management. The financial free fall therefore continued for over a decade, forcing the Government to seek to rescue the industry through privatization in late 1993. Significant policy preparation and consultations attended this privatization attempt, with respect to the institutional arrangement of the industry and the privatization framework. Notwithstanding the commendable performance of the divested estates in relation to production and productivity vis-à-vis the rest of the industry, within four years the divested assets were handed back to the Government with a $2.8 billion debt burden. This second intervention in the industry by the Government highlights serious weaknesses in relation to Government following up on its own commitments in the privatization process and the effective monitoring of new players to ensure their own commitments are realized. The overriding motivation of the privatization was to ease the fiscal burden on the Government of operating loss making estates and to preserve jobs in the industry. The wider imperatives of diversification, improving efficiency in the industry, social transformation of sugar dependent areas, as well as the environmental sustainability of the industry were clearly not considered.

References Brown, R. E., & O’Connor, W. M. (1982). The National Sugar Company of Jamaica: Formulating a strategic plan. Unpublished master’s thesis, Massachusetts Institute of Technology. Crichlow, M. A. (2005). Negotiating Caribbean freedom: Peasants and the state of development. Lexington Books. Feuer, C. H. (1984). Jamaica and the sugar worker cooperatives: The politics of reform. Westview Press.

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Frolander-Ulf, M., & Lindenfield, F. (1984). A new earth: The Jamaican sugar workers’ cooperatives 1975–1981. University Press of America. Harrison, M. (2001). King sugar: Jamaica, the Caribbean, and the world sugar industry. New York University Press. Levy, H. (2000). The social action centre story 1958–1998. In S. F. Brown (Ed.), Spitting in the wind: Lessons in empowerment from the Caribbean. Ian Randle Publishers in association with the Commonwealth Foundation. Manley, M. (1974). The politics of change. Andre Deutsch. Manley, M. (1975). A voice at the workplace: Reflections on colonialism and the Jamaican worker. Andre Deutsch. National Investment Bank of Jamaica Report. (1992). Regulating framework and methodology for privatization of sugar estates. National Investment Bank of Jamaica Report. (1994). National Investment Bank of Jamaica sugar privatization end of project report.

CHAPTER 5

The Avalanche of Trade Liberalization Since the 1990s

Introduction Sugar is one of the world’s most highly traded commodities, alongside wheat, soybean and palm oil. Richardson (2015). According to a 2005 Report of the European Commission entitled: “The European Sugar Sector: It’s Importance and Its Future”, annually, about 40 million tonnes of sugar was traded internationally, representing 30% of the world’s production. This compares with 15% for cereals. However, most of the sugar traded internationally, does so under special arrangements including; preferential trade arrangements, long term contracts, special bilateral arrangements, and so on. Only quantities of sugar exceeding that traded under these special arrangements end up in the world market. The world market is, therefore, a residual market, where excess sugar is dumped. As a consequence, it is generally susceptible to high levels of price volatility. Special arrangements supported by quotas, guaranteed prices, and high protected tariffs have been features of the international sugar trade for as long as trading in sugar existed. Mercantilism represented one of the earliest forms of special arrangements which ensured that sugar produced in European colonies in the Americas could only be sold to the colonial powers in Europe, and high tariffs ensured that sugar originating from rival countries was kept out. The unilateral liberalization of the British sugar trade, occasioned by the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_5

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Sugar Duties Equalization Act of 1846 and the subsequent repealing in 1849 of the 1651 Navigation Act, which underpinned the mercantilist triangular trade, resulted in a flood of European beet sugar into Britain, and simultaneously eroded the dominance of British colonial sugar imports. This situation however, suited neither the planter class, who were losing market share; the abolitionists, who bemoaned the entry in Britain of slave-produced sugar from Brazil and Cuba; nor the Governments of beet sugar producing countries in Europe, which were burdened with the high cost of supporting this expanding enterprize. Richardson (2009). Against the background of this convergence of dissatisfaction with British unilateral free trade regime for sugar, the Paris Convention was brokered in 1864 among Britain, France, Germany and the Netherlands, to minimise domestic support to beet sugar and equalize the treatment of beet and cane sugar in the trade. This first international commodity agreement however, along with the subsequent Brussels Convention of 1902, were not quite successful in achieving the objective of promoting free trade, as the desire for greater market share by the countries involved, superseded their desire for free trade. Richardson (2009) outlined the intriguing interplay of political forces in Britain which initiated these multilateral conventions and simultaneously undermined them. Their failure however, would have given the ailing West Indian sugar enterprize some reprieve in the latter part of the nineteenth century, from the flood of beet exports to the British market. These ill-fated attempts at multilateral free trade did not survive into the twentieth century. Chapter 3 outlined the initiatives of the British crown, in response to sustained lobbying from the planter class to protect imperial sugar through reduction of support to beet sugar, protectionist policies and preferential regimes with remunerative prices, culminating with the Sugar Protocol of 1975. That these special arrangements survived the twentieth century into the 21st underscores the political sensitivity and strategic importance of sugar. They were not unique to Britain, as indeed the United States has had a long history of extending preferential treatment to sugar imports from Cuba, Dominican Republic and Puerto Rico, whose sugar industries were the subject of substantial investments from American corporations. Since 1982, the United States has been operating a Tariff Rate Quota (TRQ) system, under which over 40 countries can export a specified annual quantity of sugar into the United States tariff free or at low tariffs.

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This import restriction mechanism forms part of US commitment under the North American Free Trade Area (NAFTA) and the Uruguay Round Agreement on Agriculture. Quotas are allocated annually by the United States Trade Representative, under the US Farm Bill. World Bank (2005). Indeed, special trading regimes for sugar dominate its trade internationally. According to Richardson (2015, p. 66), the international trade in sugar is “governed by a series of hub and spoke arrangements offering, on the one hand, restricted market access to favoured countries, and, on the other, periodic international agreements to control prices for the rest”. Clearly, any industry that has been bred and nurtured on a system of preferential markets must be subject to some level of shock with the altering of such arrangements in any major way and must of necessity embark on some adjustment programme if it is to survive. The objective of this chapter is to describe the EU’s sugar regime from which Jamaica benefitted for so many years and describe the factors causing a change in the regime and the details of the said changes.

From London to Brussels: How the Preferential Regime Was Entrenched in the EU Cane sugar from the West Indies was the original, and for some time, the sole source of sugar for Europe. According to the European Commission Report (2005, p. 1), “sugar beet growing was introduced in order to break dependence on sugar cane from the colonies, the sole source of sugar at the time, which made it a rare and precious commodity”. Apart from breaking “dependence”, the introduction of beet sugar provided an alternative source of sugar during the disruptions in trade of cane sugar from the colonies, due to the Napoleonic wars of the nineteenth century. Notwithstanding the introduction of beet sugar and it predominance in the latter half of the nineteenth century after British flirtation with liberalization, cane sugar from the colonies regained its pre-eminent position, and according to the European Commission Report (2005), beet “has survived largely as a result of tariff protection.” The European Economic Community (EEC) was established by the Treaty of Rome in 1957 and came into being on January 1, 1958 with six-member countries—Italy, France, West Germany, Belgium, Luxemburg, and the Netherlands. The Common Agricultural Policy (CAP) was a critical feature of the Treaty of Rome, with the objectives of increasing agricultural production and productivity in the EC, ensuring a

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fair standard of living for those engaged in agriculture, stabilizing markets, ensuring availability of supplies to and at reasonable prices to consumers. Commission of European Community (2000). At the Stresa Conference of Agriculture Ministers of the EC member countries in 1958 the operational framework for the CAP was established on the basic principles of a single market, community preference and joint financial responsibility for implementation. The CAP however was not implemented until 1962. The Common Market Organization (CMO) represents one of the components of the CAP, and CMOs were established for a number of commodities, outlining the concrete policy instruments that would be employed to achieve the objectives of the CAP for each commodity. The CMO Sugar was not implemented until 1967, five years after the CAP became effective. The CMO Sugar essentially created a regime to support the beet sugar industry of the EC. The regime had four essential features—support prices, production quotas, import tariffs and quotas on imports from third countries, and export subsidies. There were two types of production quotas—‘A’ and ‘B’. ‘A’ quotas relate to the level of production deemed necessary to meet domestic consumption. ‘B’ quotas represent an additional amount required to “fulfil export potential”. These quotas were distributed to EC member states and were designed to prevent overproduction. The ‘A’ and ‘B’ quotas represent maximum production of beet in the EC eligible for price support. Any production of sugar above these quotas was deemed ‘C’ sugar and was not eligible for price support and should be exported out of the EC without subsidy. Support price relates to the minimum price for beet sugar that European processors must pay beet farmers for production quotas. The support price for “A” sugar is higher than “B” sugar. There was also a market support price, called “intervention” price of EUR523.7 (in 2005) per tonne for raw sugar and EUR631.9 per tonne for white sugar. Export subsidies represented the difference paid to exporters between the EU market prices and the lower world market prices. The EEC sugar market was protected by prohibitive tariffs, designed to discourage imports of cheap international sugar into the EU, thus creating what Richardson (2009, p. 93) referred to as a “watertight seal on the European market”. Preferred importers to the EU were regulated by several bilateral agreements with set import quotas.

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The entry of Britain into the EEC in 1973 represents the first major change in the 1967 CMO Sugar. As already established, Britain since the turn of the twentieth century had a well-established preferential arrangement with its sugar colonies, which even survived the wave of independence in the British empire in the late 1950s. On entry into the EEC, Britain negotiated an accommodation of its Commonwealth Sugar Agreement of 1953, within the CMO Sugar. Essentially, British former sugar colonies of Africa, the Caribbean and the Pacific were granted specific export quotas to the EC market and were exempted from the onerous duties embodied in the CMO Sugar for third country exports. This was later enshrined in the Sugar Protocol of the Lome Agreement between the EEC and ACP countries in 1975. The Lome/Cotonou Agreement provided the following allocations for duty free exports from ACP countries as per Article 3(1) of the Protocol (Table 5.1). Under the Sugar Protocol, according to Article 1(i) “the Community undertakes for an indefinite period to purchase and import at guaranteed prices, specific quantities of cane sugar, raw and white, which originate in ACP states and which these states undertake to deliver”. According to Article 5 of the same Protocol, the above quantities “shall be marketed in the community market at prices freely negotiated between buyers and Table 5.1 ACP/EU Sugar Protocol allocation

Country Barbados Belize Fiji Guyana Jamaica Kenya Madagascar Malawi Mauritius People’s Republic of Congo St. Kitts Swaziland Tanzania Trinidad & Tobago Zimbabwe Total Source ACP/EU Sugar Protocol

Quantity (MT) 50,312 40,349 165,438 159,410 118,696 5000 10,760 20,824 = 491,051 10,186 15,591 117,845 10,186 43,751 30,221 1,294,700

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sellers”. Such a price, however, must be “within the range obtaining in the Community”. Therefore, ACP exporters were guaranteed the same prices obtained for beet sugar in the EU In order to support and protect ACP imports into the EU, the EU imposed prohibitive tariffs to keep out of the EU, sugar from other sources. As new members joined the EU, with refining capacity, it became necessary for the quantities of their imported cane sugar to be accommodated within the CMO Sugar. Portugal which joined the EEC in 1986 and Finland which joined in 1995, were two such countries. The EU therefore decided to amend the CMO Sugar through the establishment of Maximum Supply Needs (MSN). According to Commission of the European Community (2000), two additional considerations informed the establishment of MSN, that is, to meet the occasional shortfall in supply experienced by French refiners from their overseas territories, and the lobby by British refiners to import more cane sugar from the ACP, above the preferential quotas. The MSN must be met from imports from French overseas territories, ACP countries and India, and a small quantity from third countries with Most Favoured Nation (MFN) status. When the MSN exceed the stipulated quantities allowed under the above arrangements, additional raw sugar can be imported from the ACP, deemed Special Preferential Sugar (SPS), but subject to a reduced tariff. According to World Bank 2005, the SPS quota was set at 344,000 tonnes in 1995, reduced to 217,298 tonnes in 2002. Another important modification of the CMO Sugar relates to the Everything But Arms (EBA) initiative. This initiative was first conceived at the 1996 WTO Ministerial Meeting in Singapore. Richardson (2009). It was intended to stimulate growth and development in some 48 Least Developed Countries (LDCs), by offering duty- free, quota-free access by these countries for all their exports into the EU, except for armament. This agreement was concluded in 2001. However, sensitive products such as sugar, rice and banana were initially exempted. In the case of sugar, imports from LDCs were only allowed into the EU at reduced duties in 2006, gradually progressing to duty free imports by 2009. For Richardson (2009), this development was ominous for EU beet producers now facing greater competition, and portends danger to the CMO Sugar, which up to this point seemed sacrosanct. According to Richardson (2009), most exports from LDCs already enjoyed duty-free and quota free status to the EU under the Generalized System of Preferences (GSP). Therefore, by

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including sugar, the EU was signalling the beginning of sweeping reforms of the CMO sugar. At the same time, the growing number of commodities falling under the CAP, and the expansion of production beyond the EU’s consumption levels, resulted in a significant cost to the EU, through the purchases of surpluses at intervention prices. This along with increased pressure to include agriculture in the Uruguay Round of GATT (1986–1994), forced the EC to reform the CAP periodically in the 1980s and 90s. The CMO Sugar, however, save and except for expansion of preferential arrangements, has remained largely unchanged up to 2005, surviving even fundamental reforms introduced by the EU, for example the MacSharry reforms of 1992 and the Agenda 2000 reforms, both of which resulted in cuts in price support for a number of products, in favour of direct income support to farmers based on the size of their agricultural holdings and the number of animals they owned. Commission of the European Community (2000). The CMO Sugar also survived the later efforts to liberalize the CAP through the Fischler reforms of 2003. Richardson (2009). However the momentum of reform was building, and with the challenge of the EU sugar regime in the WTO by Australia, Brazil and Thailand in 2003, the days of the very entrenched CMO Sugar and the Sugar Protocol embedded in it, were numbered.

The Unintended Consequences of the Regime Recall that the objectives of the CAP, under which the CMO Sugar falls, were essentially to raise agricultural production and productivity levels to ensure the availability of the supply of sugar to EU consumers at reasonable prices, whilst ensuring that producers were enjoying a fair standard of living. The CMO for Sugar without a doubt achieved the objective of ensuring increased production of sugar and ensuring it’s available to consumers. The sugar regime before the 2006 reforms had the impact of driving EU beet sugar production above consumption levels, rendering the EU a net exporter of sugar. By 2005, based on statistics from the International Sugar Organization, consumption in the EU was 16.8 million tonnes, with production at 21.7 million tonnes. With only 2.4 million tonnes imported into the EU under special arrangements, the EU was a net exporter of some 4.2 million tonnes of sugar. The policy therefore went beyond increasing production and ensuring availability to creating surpluses, which had to be exported. Richardson

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(2009) argues that this overproduction was structural and thus inevitable, since production quotas and preferential import quotas offered to the ACP exceeded EU domestic consumption. The explicit export subsidies provided to “B” sugar allowed EU producers to export this sugar to the World Market, where prices were 2–3 times below EU intervention prices, and certainly below their cost of production. With respect to “C” sugar, although this category of production did not explicitly benefit from EU export subsidies, its exports to the World Market at prices below the cost of production represents dumping. This was only possible by cross-subsidization by the higher prices received for “A” and “B” sugar. So long as the marginal cost for producing “C” was lower than the world market price, it suited producers to export it, as their high fixed and overhead costs would have been met through their “A” and “B” sugar payments. The Commission of the European Community in a 2000 study evaluating the impact of the CMO Sugar concluded that the EU sugar regime had a distortionary effect on the world market and that “in the absence of the CMO Sugar (all things being equal), the world market price would be higher”. Commission of the European Union (2000, p. 37). Apart from overproduction in the EU, which in turn caused the export of surplus on the World Market with trade distorting impacts, the CMO Sugar caused a considerable degree of concentration of production of beet sugar in the EU and the emergence of a few refiners that dominated the beet sugar business, referred to by Richardson (2009) as “national champions”. Production quotas under the CMO Sugar were allocated originally to a small number of companies, which hitherto were the quota holders under their national governments. Since the quotas under the CMO Sugar were not transferable, and since over time new quotas were not issued, the regime created a virtual monopoly of producers/refiners. The fact that the quotas were fixed over time and prices were guaranteed and stable, holders of these quotas could only increase profits by reducing their cost of production through the continuous infusion of new technologies. This process not only increased the yields of beet sugar and the efficiency of its extraction and processing, but resulted in a reduction in the number of persons employed in the beet sugar industry. In the process, smaller, less efficient plants were bought out resulting in concentration of production in a few hands and in specific regions. Commission of the European Community (2000) identified this shift in the regionalization

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of beet sugar production as one of the unintended consequences of the CMO Sugar. Richardson (2009, p. 96) points out that in the 10 years between 1992 and 2002, 30% of beet factories were closed down, with France and the UK emerging as major winners, evidenced by the average size of beet farms in these countries being 100 hectares, compared with 69 hectares on average in the EU. There was also an attrition of some 20,000 workers from the industry. Commission of the European Community (2000, p. viii) indicates that this concentration of production has further strengthened the hands of a few producers as in eight of the Member States “sugar manufacturing is now taken care of by one company only, while in three of the other Member States a single company controls more than 60% of the sugar production”. It is remarkable that as with the plantation system, the benefits of the CMO Sugar have been disproportionately flowing to a selected few. Richardson (2009) has identified this selected few as the beet sugar processors. Notwithstanding the overproduction of beet sugar in the EU, contrary to what obtains in a free market scenario, this did not translate into lower or even reasonable prices for consumers, consistent with the objective of CAP. The cost of maintaining the CMO Sugar was borne by the EU consumers through higher prices and the EU tax payers. Richardson (2009) pointed out that part of the cost of the regime was financed through producer levies, which were simply passed on to the consumer. Overall, the EU consumers were forced to pay high prices for EU produced beet sugar and ACP imported sugar, when they could have benefitted from cheaper world market prices if the EU market was liberalized. The high prices in the EU therefore represented a transfer from EU consumers to beet sugar growers and refiners in the EU The ACP sugar states with their preferential access to the EU market were significant winners, enjoying prices 2–3 times what they would have realized on the World Market. Data from a World Bank 2005 study show that between 1970 and 2000 the EU intervention price has been mostly above the world market prices, and consistently so by least 2–3 times since the early 1980s. Richardson (2009) points to the significant positive impact of the Sugar Protocol on ACP countries in terms of contribution to foreign exchange earnings (over 20% in Fiji and Guyana); and employment (over 100,000 persons in Fiji, 93,000 in Swaziland, 62,000

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in Tanzania). More profoundly, Richardson (2009) points to the significant social function of the sugar industry in the ACP, providing housing, schools, health clinics, sporting facilities, utilities and other social amenities. This is consistent with the construct of the plantation system, where Best describes the plantation as a self-contained unit, and underlines the failure of independent governments to break the dependencies created by the system. On the other hand, this highly concessionary regime has bred complacency in producers in Jamaica for instance, as the industry relying on these high prices for survival, failed to modernize their operations to improve efficiency, and has remained high cost producers. As Richardson (2009, p. 110) confirmed, “arguably, only Malawi, Mauritius, Swaziland and Zimbabwe developed first rate industries under the Sugar Protocol”. Although the Sugar Protocol made a significant contribution to poverty reduction and development in some poor ACP countries, this must be juxtaposed with the cost to EU consumers and the bigger benefits received by EU refiners and beet farmers. According to Watkins (2004), ACP countries currently receive a premium of £433M a year by exporting to the EU rather than on the world market. On the other side of the balance sheet, EU taxpayers spend £800M in subsidizing the export of an amount equivalent of the ACP imports.

By shutting out efficient low-cost producers in the developing world, such as Brazil, Thailand, and Cuba, these countries are losing potential foreign exchange revenue by being forced to sell their sugar on the world market, where prices are considerably lower. According to Watkins (2004), in 2002, the potential loss in revenue to Brazil would have been $494M and for Thailand $151M. Clearly the EU sugar regime was running against the grain of the global trend in trade liberalization that picked up momentum in the 1990s and accelerated particularly with the formation of the World Trade Organization (WTO) in 1995. Not only was the regime trade distorting by dumping sugar on the word market, but the protocol was both discriminatory against other efficient producers, as well as nonreciprocal in nature, both of which are incompatible with the tenets of global trade liberalization.

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How Trade Liberalization and the WTO Dealt the Fatal Blow The struggle to liberalize the international sugar, as mentioned previously, began in Britain in the mid-nineteenth century and up to the end of that century seemed to have prevailed somewhat. Sugar however, has been a commodity of critical strategic and political significance, with a plethora of special protectionist national, regional and bilateral arrangements for it trading emerging in the early twentieth century and subsisting for most of it. According to Richardson (2015), the United States, in its role as chief architect for the reconstruction of the global economy after World War 2, failed to follow up on its original design of creating an international organization to promote free trade, as companions to the establishment of the World Bank and the International Monetary Fund (IMF). In the neo-liberal era of the 1980s and 90s, these very institutions aggressively promoted trade liberalization, particularly in the global South, where through their structural adjustment programmes they held considerable sway. The developed world however, closely guarded trade in agriculture from liberalization due to the political sensitivity of agriculture in their own countries. In the meanwhile, many countries in the global South were emerging as major producers of the world’s food— Brazil, Argentina, Thailand and South Africa and according to Richardson (2015) had an “offensive interest” in free trade. It is also the case that the cost in the rich North of sustaining the massive programmes of support to agriculture was becoming burdensome and these protectionist policies were robbing their consumers of access to the cheapest food. The countries of the North also wanted greater access to the markets of the South, where populations were growing rapidly. The momentum was clearly in the favour of liberalizing global agricultural trade. In the Uruguay Round of the GATT negotiations (1986–1994), an agreement on agriculture was finally achieved, as well as other mechanisms to facilitate the formation of the WTO in 1995. Within the Agreement on Agriculture, the North managed to negotiate the preservation of a number of their support programmes. According to the Commission of the European Community (2000), the EU agreed to some reform of its CAP, and specifically as it relates to the CMO Sugar, commitments were made with respect to allowing minimum access at reduced or zero duties to the equivalent of 5% of domestic consumption by 2000/01; replace ad

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valorem import duties with fixed import duties, and the gradual phasing out of fixed duties; as well as the lowering of export subsidies. The above commitments did not significantly affect the CMO Sugar, as for example the commitment to market access was already exceed through the 1.3M tonnes of sugar imported duty free from the ACP under the Sugar Protocol. Where the EU was vulnerable however, was with respect to the discriminatory and non-reciprocal nature of the Sugar Protocol, for which it secured a waiver up to 2007. The matter of the limit on export subsidies to its development aid implicit in its preferential imports from the ACP would also prove problematic for the EU. The EU’s commitments within the Agreement on Agriculture did not facilitate greater market access for third countries, such as Australia, Brazil, Cuba and Thailand, which were not only low cost producers, but major exporters of sugar in the world. In 2003, Australia, Brazil and Thailand mounted a challenge to the EU sugar regime in the WTO in relation to its level of export subsidies to its producers. The WTO specifically ruled that the EU’s level of subsidized exports exceeded their commitment under the WTO, and that “C” sugar was being cross subsidized by the higher prices paid in the EU for “A” and “B” production quotas. The decision was upheld by the WTO Appellate Body in 2005. According to Richardson (2009, p. 99), the defence of the EU was somewhat lukewarm, inspired “more out of a duty to challenge than a desire to win”. The truth is, the EU was concerned about the enormous cost of its sugar regime and was far more interested in making its sugar regime compatible with the WTO, in order to pursue market access for other products in other markets, than preserving a sugar regime which only benefited a few and caused consumers to pay higher prices. It should be pointed out that the challenge to the EU sugar regime did not specifically relate to the Sugar Protocol, but the issue of export subsidies. The waiver obtained by the EU related to the discriminatory and non-reciprocal nature of the Sugar Protocol could have been renewed at its expiration in 2007. Richardson (2009) posits that the EU was not interested in seeking another waiver, because it would have cost them too much in terms of concessions they would have been forced to make to thirds parties on the side, in order to win the support of such third parties for a waiver. The EU’s preference was for the negotiation of reciprocal Economic Partnership Agreements (EPAs) with the ACP. The EU sugar regime was scheduled to expire on June 30, 2006. The European Commission, in light of the ruling of the WTO Appellate Body,

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used the opportunity of the expiration of the regime to effect reforms, for the first time in its 40 year history. The European Commission Report (2005) set out the objectives of the reforms as follows: • to guarantee regular supply of sugar • to make the sugar sector more competitive • to provide a fair standard of living for farmers and maintain rural communities • to maintain preferential access to ACP and LDC exporting countries • to simplify the regime and make it more transparent • to limit the impact on the EU budget In order to achieve the above objectives, the EU Commission implemented a slew of reform measures encompassing price reduction, partial compensation for farmers, production quota reduction, and financing diversification in the most affected regions of the EU. According to the European Commission Report (2005), the price cuts proposed by the Commission were intended to make the sugar sector “more competitive and market oriented”. Intervention prices, through which the EU formerly buy into stores were abolished and replaced with reference prices. At the same time, support prices were cut in stages, as well as minimum (guaranteed) prices to beet growers. The eventual level of price cuts was 36% to be implemented between 2006 and 2009. To the extent that ACP exports received the same prices obtained in the EU for beet sugar, the export prices for ACP sugar exports were correspondingly cut by 36% over the period 2006–2009. This represented the major impact of the reform on ACP sugar exporting countries. In order to compensate EU beet farmers affected by the 36% price cut, the Commission made direct one-off compensation payments to beet growers representing 60% of the revenue loss occasioned by the price cuts. These payments were, however, contingent on growers complying with predetermined targets relating to environmental management and worker’s health and welfare. It is significant that unlike the intervention in the Jamaican sugar industry over many years, the EU intervention in its sugar sector had specific social and environmental objectives. The 2006 sugar reform did not propose compulsory reduction in production quotas for EU beet growers, but rather voluntary quota

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reduction by providing monetary inducement for inefficient farmers to leave sugar production. This inducement came in three forms: • a contribution to the cost of closing sugar factories or conversion of said factories to other uses • full compensation for revenue lost in year 1 • financing the cost of diversification into other economic endeavours in the most affected regions of the EU. The EU also encouraged the reorientation of sugar production from food to energy—biofuel, chemical, and pharmaceutical industries. The EU maintained the duty-free quota access of ACP countries. However, prices were cut in the range of the new lower reference prices in the EU. The ACP countries mounted a strong lobby in the EU, pointing out the devastating impact of the proposed price cut not only on their economies, but on rural sugar dependent communities. Whilst the EU did not reverse the proposed price cuts, it proposed a package of assistance to the ACP, called “accompanying measures”. Release of these resources was, however, contingent on each ACP country presenting to the EU a specific action plan or adaptation strategy. It is instructive that the EU insisted that its accompanying measures resources should not only cover economic measures to increase the competitiveness of ACP sugar industries but according to the European Commission Report (2005), also “broader social, economic, and environmental consequences of the reform”. The EU was therefore insisting on a comprehensive and sustainable approach to reform in ACP sugar industries resting on the three pillars of sustainability—the social, economic, and environmental. This represents a significant departure to the one-sided and unsustainable approach of government’s intervention in the industry in the past, and this insistence by the EU may have influenced the GOJ’s decision to include environmental sustainability in its strategy. The reformed sugar regime in 2006 described above, was to remain in effect until 2015, at which time it would be reviewed. Even whilst the EU was restructuring the sugar regime in light of the successful challenge in the WTO by Australia, Brazil, and Thailand, the nonreciprocal sugar protocol between the EU and the ACP was simultaneously under threat. Under WTO rules, the nonreciprocal protocol was deemed discriminatory. According to the International Sugar Organization (ISO) 2014 publication entitled, “The E.U Sugar Market Post 2017 ”,

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Under WTO rules developed countries can only give nonreciprocal trade preferences to either all developing countries, on the one hand or to least developed countries only on the other hand. This should ensure that no discriminatory measures are applied to any other subgroup of developing non-LDC countries. It was therefore concluded that ACP Preferential Access by the EU appeared as discriminatory and not justifiable under existing WTO procedure.

The EU signalled that it would not seek an extension of that waiver in respect of its sugar protocol with the ACP, and from as early as June 2002 commenced negotiations with the ACP countries in respect of new EPAs, which would be reciprocal in nature and cover “substantially all trade”. The CARIFORUM EPA encompassing Caribbean Community (CARICOM) states and the Dominican Republic, was the first to be signed between the ACP and the EU. In relation to sugar, it continues to provide duty free access to the EU, but no guaranteed prices. Significantly, under the EPA, higher value sugar, such as specialty sugar and refined sugar would also enjoy duty free access. Although Jamaica and the rest of the CARIFORUM continue to enjoy duty free access to the EU, what is alarming is the fact that the EU has been negotiating similar Free Trade Agreements (FTAs) with many other blocs of countries outside the ACP, with similar provisions of duty free access. According to the ISO (2014), such agreements were concluded with Central America, allowing for duty free access to 162,000 tonnes of raw sugar in 2013, to rise to 186,300 tonnes in 2018. That agreement was signed in June 2012. A similar FTA was signed with Colombia and Peru in June 2012, allowing for duty free access for a combined 84,000 tonnes of raw sugar. Other FTAs with the EU are on the horizon, and this portends danger to Jamaica and other ACP exports to the EU as those countries are far more efficient producers of sugar. Seven EPAs were negotiated between the EU and the ACP bloc viz: CARIFORUM, West Africa, Southern Africa Development Community, Eastern Africa Community, Pacific, Central Africa, and Eastern and Southern Africa. In 2009 the EU unilaterally renounced the Sugar Protocol. ACP countries however continued to export sugar to the EU under EPAs, receiving less concessionary prices compared to the pre-2006 period, but still higher than what they would have realized on the World Market. On September 30, 2017, the EU abolished domestic production quotas, signalling a move to self-sufficiency in sugar. Production quotas helped to maintain

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high domestic prices in the EU and to avoid excess supply. The abolition of production quotas therefore, approximated EU domestic prices to the World Market prices, and thus render the EU market almost totally unattractive to ACP Producers, especially from the Caribbean.

Conclusion The days of guaranteed quotas and preferential prices are over. The challenge of the EU sugar regime was essentially about emerging nations asserting their right to access large markets. This shows that in international negotiations size does matter. The ACP sugar exporting countries were no longer strategic to the EU, and with their growing importance as leading producers of food globally, these emerging economies could no longer be ignored. The entire CMO Sugar itself was fundamentally about protecting beet sugar. The interest of ACP countries in the larger scheme of things was incidental, and only featured in the CMO Sugar at the instance of Britain in 1973. Imperial sugar was no longer the pearl in the jewels of the British crown. Notwithstanding the inability of ACP’s sugar exporting countries to influence the events surrounding the challenge to the EU’s sugar regime and the subsequent reforms, due to their relative small size and influence in the global sugar business, sugar was none-the-less critical to the economic and social fibre of these countries. They therefore had a vested interest to act quickly to avoid economic ruin and social collapse. Have these countries been doing all in their power to systematically improve their sugar industries and make them resilient in the face of these sudden challenges? The important question is what has independent Jamaica been doing to make its sugar industry resilient and sustainable? Was the strategy simply to rely on highly concessional, but discriminatory prices forever? Certainly continuous restructuring of this critical industry must have been part of the broader strategy of what Norman Manley, chief architect of Jamaica’s independence, referred to as the mandate of independent Jamaica, to complete the independence project through social and economic reconstruction of the country. The response of Government to this sudden disruption of the over 300 years old sugar industry is poignant. It is, therefore, necessary to look specifically at the GOJ’s response to the reform of the EU sugar regime which commenced in 2006, as the assessment of the impact of the social and environmental interventions is the focus of the empirical work of this book.

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References Commission of the European Community. (2000). Evaluation of the common organization of the markets in the sugar sector. Commission of the European Community. European Commission Report. (2005, June). The European sugar sector: Its importance and its future. International Sugar Organization. (2014). The EU sugar market post 2017 . Retrieved from www.sugaronline.com/home/shop_products/view/52784 Mitchell, D. (2005). Sugar in the Caribbean: Adjusting to eroding preferences (World Bank Policy Research Working Paper 3802). Richardson, B. (2009). Sugar: Refined power in a global regime. Palgrave MacMillan. Richardson, B. (2015). Sugar. Polity Press. Watkins, K. (2004). Dumping on the world: How EU sugar policies hurt poor countries. Oxfam International. Retrieved from http://policy-practice.oxfam. org.uk/publications/dumping-on-the-world-how-eu-sugar-policies-hurtpoor-countries-114470

CHAPTER 6

The Response

Introduction By the time of the EU sugar reforms of 2005, an independent Jamaica would have had superintendence of its sugar industry for some 43 years. During this time the sugar landscape would have changed somewhat. There was significant consolidation, with the number of factories declining from 20 in 1962 to seven, with a steady decline in production and productivity from 452,251 Tonnes and 9.21 TC:TS to 124,206 Tonnes and 11.02 TC:TS respectively. In 1970 the Government became involved directly in the industry, introducing cooperativization in the 1970s and divestment in the mid-1990s, both of which failed to turn around the fortunes of the industry. By the late 1970s the Government became the main player in the industry by default, as private owners faced with mounting losses, abandoned their businesses, which were rescued by Government, driven by the fear of precipitous and calamitous social fallout. Save and except the World Bank Loan of the mid-1980s to rehabilitate irrigation systems in the Monymusk area, the industry hardly experienced any major capital injection and infusion of new technology to increase yields in the field and improve factory efficiency. It would seem that everyone was basically relying on the unsustainably high guaranteed in the EU market, and hoping that these prices would continue indefinitely. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_6

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Quite apart from the threat of the loss of this lucrative market precipitated by the 2005 reforms, every rational producer should have been focused on improving efficiency and competitiveness in order to maximize profits. The Government has to shoulder some of the responsibility for this lack of modernization, not only as the major producer since the late 1970s, but for resisting the attempts of private estates to mechanize harvesting, as cited by Feuer (1984) and Levy (2000). This inertia with respect to investment in the industry is puzzling, given the critical importance of the sugar industry to the nation in terms of foreign exchange earnings, employment and maintaining the social fibre of SDAs. Could this paralysis on the part of Government and other industry players be symptomatic of the deep-seated dependency that the plantation engendered over such a long time? Could this inaction served to perpetuate the poverty in SDAs, with the industry only serving as a sponge to mop up the large pool of the rural unemployed people and keep them in low paying jobs? This seemed to have been a common feature within sugar producing ACP countries, as Richardson (2009) observed that only a handful of ACP States built out first rate sugar industries under the Sugar Protocol. While the requisite investments were not being made to keep the industry profitable and competitive, both the industry and Government seemed not to have been following the momentum of liberalization that was evident in the Uruguay Round of GATT negotiations (1986–1994), where the pressure had been mounting for agricultural trade to be liberalized. Did not the Government and industry perceive that the EU had a bigger agenda to liberalize agricultural trade, that is, to penetrate new markets in the global South, rather than preserving the non-reciprocal discriminatory trade arrangements with its erstwhile colonies, which were no longer strategic to it? Was the Government not observing the rise of emerging developing countries as major global food producers, who were asserting their right to market access in those markets from where they were locked out of by preferential trade arrangements? Obviously, despite the myriad studies, conferences and talk about restructuring and the potential impact of liberalization of the EU’s CMO Sugar over the years, the reforms of 2005 seemed to have caught Jamaica unawares. Undoubtedly, the industry was facing its greatest challenge yet, perhaps even an existential challenge. This was the last chance for the Government to mount a viable response. But was it too late? This chapter will look at what the experts were predicting would be the impact of these

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reforms on the Sugar Protocol countries, what was the range of responses across selected ACP countries, the reaction of local industry players and the Government of Jamaica’s strategy to mitigate this huge challenge.

The Prognosis of the Pundits The pressure to liberalize the EU’s CMO Sugar had been long in coming. During the Uruguay Round of GATT negotiations, an Agreement on Agriculture was arrived at, and within that framework parties had to make commitment relative to reducing export subsidies over time and improving market access through gradual reduction of import duties. Chapter 5 speaks to the commitments of the EU with respect to its sugar regime. While these negotiations were going on and up to the announced reforms of the CMO Sugar in June 2005, a plethora of analysts were undertaking assessments of the likely impact on developing countries (ACP and EBA), based on numerous scenarios before, and the actual elements of the 2005 reforms. These assessments would have been carried out at least 10 years prior to the actual announced reforms in 2005, consequent on the successful challenge of the CMO Sugar in the WTO by Australia, Brazil and Thailand. A 2005 study by the Agricultural Economics Institute (LEI) of the Netherlands, entitled Impacts of the EU Sugar Policy Reforms on developing countries, did a fairly comprehensive review of some of the more important studies conducted between the commencement of the Uruguay Round and the 2005 reforms. LEI (2005) identifies a number of the earlier studies, including Tyers and Anderson (1986). The Landell Mills Commodities (LMC) also conducted a series of studies between 2002 and 2005 on the projected impacts of changes in the EU sugar regime on developing countries, including ACP sugar exporting countries. Given these numerous studies and the protracted Uruguay Round negotiations (1986–1994), every sugar exporting ACP country should have been keenly following the progression of liberalization and preparing themselves accordingly. Essentially, even before the actual reforms were announced in 2005, the expectation of the pundits was that ACP and EBA countries would continue to enjoy duty free access into the EU for their sugar exports and fundamentally what would change for them is a lowering or elimination of guaranteed prices. In actuality, what the EU proposed was a gradual

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lowering of reference prices by 36% between 2006 and 2009. By 2015 when the reformed CMO Sugar was slated to expire, all reference prices were abolished, even though EBA countries continued to enjoy duty-free and quota-free access, the same facility afforded ACP countries under the EPAs. Assuming that ACP sugar countries were able to continue to export pre-reform quantities to Europe at the reduced prices between 2006 and 2009, all ACP country would have lost US$490 million, representing the quantities exported before the reform times the difference between the EU prices and the world market price. Milner and Zgovu (2004). For Jamaica the estimated annual loss between 2006 and 2009 was 25 million euros. LMC (2005). Within this scenario, it was the countries with the largest Sugar Protocol allocations, that is, Mauritius, Fiji, Guyana, Jamaica and Swaziland, which together held 80% of the quotas, which were expected to lose most in absolute terms. LEI (2005). In relative terms however, other ACP exporters, with smaller quotas, might be bigger losers, having regard to the share of sugar exports in merchandize trade, the sugar sector’s contribution to employment and the share of sugar in total farm lands. On this basis, Belize, with a modest quota of 40,000 tonnes was significantly reliant on the sugar industry, with this industry accounting for 12.5% of total employment (in 2000/2001), 43% of crop land (between 1999 and 2001) and 20% of merchandize exports. Similarly, for St. Kitts with a quota of 14,472 tonnes, the sugar industry accounted for 7% of employment, 77% of crop lands and 22.1% of merchandize trade. By contrast, for Jamaica with a quota of 118,000 tonnes, the sugar industry accounted for 2.5% of employment, 32% of crop lands and 5.4% of merchandize trade (Mitchell, 2005). The real determinants of the magnitude of impact of the EU sugar reforms on ACP countries are the level of dependence on the EU market and the competitiveness of the sugar industry, that is, the lower the dependency on the EU market and the greater the level of competitiveness (lower production costs), the greater the likelihood of emerging as a winner. Garside et al. (2004). Where dependency on the EU market is relatively low, lower prices in the EU market resulting from the reforms, means a corresponding low loss of income transfer, all things being equal, and hence comparatively smaller impact on export revenues and employment. Based on the comparative prices in the EU vis-a vis other available markets, a low proportion of exports going to the EU provides ACP countries with the flexibility of moving sugar to other markets. In this

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context Barbados, Jamaica, Mauritius and Trinidad are most dependent, with between 80 and 100% of their exports headed for the EU market between 2001 and 2003 (LEI, 2005). In the Caribbean, Belize and Guyana, with 51 and 74% of their total exports going to the EU, are less reliant. These countries therefore have more room for diversion into markets they would have been familiar with. African countries in the ACP and EBA groups also have a much lower reliance on the EU market. Most assessments of the impact of the EU reforms on developing countries rely heavily on LMC studies relating to comparative cost of production per tonne of sugar. LMC (2004) categorized ACP and EBA countries into three groups based on their cost of producing a tonne of sugar. Among low cost producers (below 300 euros per tonne), were Malawi, Swaziland and Zimbabwe among ACP countries, and Ethiopia and Sudan within the EBA group. In the medium category (between 301 and 500 euros per tonne) were Belize, Cote d’Ivoire, Fiji, Guyana, Mauritius and Tanzania from the ACP, and Burkina Faso and Mozambique from the EBA group. The high cost producers (over 501 euros per tonne) were Barbados, Jamaica, Madagascar, St. Kitts and Trinidad. Williams and Ruffer (2003) basically arrived at the same categorization based on cost of production. At the end of the 3 year price reduction under the 2005 reforms, the price to ACP exporters was projected at 319 euros per tonne for raw sugar at the EU border. When freight and insurance are added, estimated by LEI (2005) to range between 50 and 100 euros per tonne on average, ACP and EBA exporters would have had to have cost of production ranging between 219 and 269 euros per tonne just to break even in the EU market. Additionally, for land-locked EBA countries they would have to factor transportation over land to the nearest port, and the cost of duties, though reduced, which they were obliged to pay up to 2009. On the basis of this analysis Jamaica, St. Kitts, Barbados, Trinidad and Madagascar ought to have ceased exports to the EU. LMC (2004), Garside et al. (2004) and Williams and Ruffer (2003). Since as was pointed out earlier, these very high cost producers are at the same time the most dependent on the EU market for their sugar exports, then cessation of exports to the EU could precipitate the collapse of these sugar industries, unless there were substantial investments in improving efficiency and lowering the cost of production. LEI (2005, p. 50) for instance opined that for these high cost producers, “restructuring of the industry makes no sense”, given how high their costs of production were. For these

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countries right-sizing of their industries to meet domestic and regional demands, which markets tend to be highly protected, seems the most viable alternative. In relation to Guyana and Belize, with cost of production in the medium range and with less dependence on the EU market, these countries were poised to fare better due to a number of factors. If these countries could attract direct foreign investments in their industries with consequential improvements in their competitiveness, they could survive in the EU market or even expand exports under the EPA provisions of duty free quota free access. Indeed, both countries have significant land resources for expansion and abundant water resources, obviating the need for elaborate irrigation systems. These restructuring efforts should embrace diversification of the product base of the sugar cane to include cogeneration from burning bagasse and refining in order to create new revenue streams. Belize and Guyana exported 44,237 tonnes and 42,038 tonnes respectively outside of the EU market in 2000/2001 (Mitchell, 2005). This demonstrates the potential of these countries and their experience in markets other than the EU. The pundits projected an increase in world market price in the short to medium period after the 2005 EU reforms, as less subsidized EU sugar entering that market and diversion by EBA countries of their exports from the world market to the EU while prices there are higher, would create higher prices. Belize and Guyana would therefore be in a position of selling more sugar on the world market in the medium term, and particularly in the long term if further liberalization renders EU prices equal to or lower than the world market. These countries were also best poised to supply the CARICOM market, where demand is some 300,000 tonnes of raw and refined sugar. At the time of the EU reforms, CARICOM had a 40% duty on sugar imported from extra-regional sources. With its surplus, Belize and Guyana could move more sugar into the regional market, and if they installed refining capacity, they could invoke the 40%, so long as they could satisfy 75% of regional demand. Most analysts predicted that in the medium run, that is until the reformed CMO Sugar expired in 2015, Malawi, Swaziland and Zimbabwe, low cost ACP producers would simply take over the quotas of the high cost producers who were forced to exit the EU market. It was further expected that low cost EBA exporters (Ethiopia, Sudan and possibly Mozambique), would increase their supplies to the EU market,

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especially after the phasing out of EU tariffs under the EBA, scheduled for 2009. In both instances however, expansion of exports in the EU would only be possible with the necessary investments to expand production and improve efficiency (LEI, 2005; LMC, 2004). Overall, the biggest winners of the reform were expected to be the super low cost producers—Brazil, Australia and Thailand, which will move more sugar into the EU as the liberalization of that market progressed and through their exports to soon-to-be admitted members, whose supplies have to be accommodated within the CMO Sugar upon ascension. These countries also had the greatest potential to gain from arbitrage, that is, the movement of sugar from one market to the other, based on spatial and temporal differentials in price. The biggest losers were forecasted to be high cost, highly dependent ACP sugar producers, as well as EU beet producers who were faced with reduction in prices and export subsidies, and greater competition through the influx of imported sugar occasioned by liberalization.

Spectrum of Responses Across the ACP The reforms of the EU sugar regime announced by the EU Commission in June 2005 largely caught ACP sugar producing countries flatfooted, despite the clear signals of impending liberalization from as far back as the Uruguay Round of GATT Negotiations. In reference to the lack of pro-activeness and inaction of ACP countries, Lal and Rita (2005), remarked that “reforms have been lacking on the domestic front, despite ACP countries being given clear signals about the need for reforms when the Cotonou Agreement was signed”. The initial reaction of the announced reforms therefore triggered a flurry of lobbying efforts by the ACP Sugar Group in Brussels, punctuated by visits from the political directorate of ACP countries to Brussels and other key EU capitals to secure modification of the EU position, accentuating the social collapse in their countries that the reforms would precipitate. This reliance on lobbying in the face of challenges to the status quo is reminiscent of Best’s characterization of the Plantation Economy Model. Clearly, the ACP directed more energies to influencing international trade in its favour, than undertaking the necessary reforms of its sugar industries to be able to compete in a liberalized market. Lal and Rita (2005) and European Centre for Developing Policy Management (1998).

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In the end however, the EU was steadfast in its resolve to reform the CMO Sugar, with its eyes fixed on seizing the opportunities to penetrate markets in the South, which global liberalization of trade affords. As pointed out earlier, the EU refused to seek a waiver of the non-reciprocal, discriminatory Cotonou Agreement, in which the Sugar Protocol was embedded, which was part of its commitment in the Agreement on Agriculture, and which was due to expire in 2007. The lobby of the ACP then turned to securing maximum support from the EU under the Accompanying Measures resources, to aid with restructuring of their sugar industries and addressing the social fallout of the reforms in sugar communities. The experience of selected high and medium cost ACP producers will be examined to demonstrate the range of responses. St. Kitts and Nevis and Trinidad and Tobago Obviously, the most dependent states on the EU market were most vulnerable, and these were the States which were simultaneously the high cost producers. Trinidad and St. Kitts quickly opted to close down their sugar industries, consistent with the prognosis of the pundits. The sugar industry in both countries were both government controlled, and characteristic of government controlled industries in the Caribbean, accumulated huge debts over time. According to Mitchell (2005), in the case of St. Kitts, in the 15 years period to 2003, these debts stood at US$103 million, or a whopping 40% of the island’s GDP, while for Trinidad the total debts of the state-owned Caroni (1975) Limited was US$540 million. Debts of this magnitude stymied efforts at restructuring at both the field and factory levels, thus reinforcing the high cost of production. In 2002, St. Kitts had the highest debt to GDP ratio in the Caribbean of 157.5%, according to the IMF’s November 2003 Public Information Notice on its Article IV consultations with St. Kitts. Clearly, the state-owned Sugar Manufacturing Corporation was a major drag on the country’s budget. This strangling debt forced the Government of St. Kitts to pre-emptively default on its debts, through an IMF sponsored Sovereign Debt Restructuring Programme in 2006, and entered into a Standby Agreement with the IMF in 2011. Nicholls (2014). Clearly, given the serious burden on the country’s fiscal resources and the characteristic neoliberal IMF prescriptions of privatization of loss making public sector enterprizes, the closure of the sugar industry in St. Kitts

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was inevitable. This was particularly so, since the prospects for successful divestment were dim, against the background of the industry’s small size and the reduction of its preferential access to the EU market, both of which militated against private investment. Doubtless, this was a painful decision, given the almost monoculture profile of St. Kitts agricultural landscape, with sugar occupying 72% of all crop lands, accounting for 22% of merchandize trade and 7% of employment. In the case of Trinidad and Tobago, Government took over the operations of the Tate and Lyle owned enterprize in 1975 under the Caroni (1975) Limited, which for its 30 years of operation up to 2005 never made a profit. Richardson (2013). This prompted the Government to restructure the industry in 2003. This involved the closure of 2 mills, consolidation of factory operations in Caroni (1975) Limited, while transferring the non-sugar assets to the Government for the pursuit of diversification activities and allocation to independent cane farmers, who were the sole suppliers of cane to the factory. Some 9000 workers were made redundant, with a smaller number re-employed to the factory. Those made redundant benefited from severance payments consistent with Trinidad’s labour laws and significant retraining, as well as being accorded preference to acquire houses owned by the Estate. Significantly, the restructured Caroni (1975) Limited started operations free of debt, with all the industry’s past liabilities transferred to the Government. The restructured company was to run on private sector principles. A separate company was formed to manage the nonsugar assets. Caroni (1975) Limited was to continue producing sugar to supply Trinidad’s Sugar Protocol quota in the EU market, as well as to expand into refining from locally produced sugar, as well as imported raw sugar, to satisfy the refined sugar demand of Trinidad and the rest of CARICOM. The viability of the proposed refinery aspect of the business rested on the 40% protection afforded by the Common External Tariff (CET) in the CARICOM market. This plan was lauded by Mitchell (2005, p. 31): “on balance the restructuring was a success and most of the former sugar workers appeared satisfied with the separation package”. It was also further commended by Mitchell (2005, p. 27) “as a model to other countries”. Despite the optimism of the World Bank, by 2007 Trinidad announced the closure of its sugar industry. The restructuring, while successful in relation to the severance of some 9000 workers and transferring the

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burden of sugar cane growing to independent farmers, did not translate into improved financial results for Caroni (1975) Limited, nor was the planned diversification realized. According to Richardson (2013), the entire exercise in the first instance was a gimmick by the People’s National Movement (PNM) government to erode the political base of the opposition United National Congress (UNC), whose then leader Basdeo Panday emerged from the sugar union, dominated by workers of Indian descent, who were loyal to the UNC. More fundamentally, in economic terms the plan was flawed on two bases. Firstly, it was predicated on continued access to high EU preferential prices, which experienced a 36% reduction between 2006 and 2009 under the EU reforms. Secondly, the 40% CET protection under CARICOM on which the refinery plan depended, could only be triggered if Trinidad was producing 75% of the region’s demand for refined sugar, which capacity neither Trinidad nor the rest of the sugar producing countries possessed at the time. Belize and Mauritius In relation to countries in the medium range of the cost of production spectrum, the responses of two countries, Mauritius and Belize, shed some light on how proactiveness on the side of the former, and quick reaction on the part of the latter, enabled them to survive in the postEU reform period. Many pundits had identified Mauritius as among the biggest losers in the ACP in relation to the EU reforms, by virtue of the fact that Mauritius was in receipt of the largest quota under the Sugar Protocol, that is, 491,031 tonnes, or 38% of the total; and not being situated among the lowest cost producers. Milner et al. (2004), Alexandraki and Lankes (2004) and Garside et al. (2004). These pundits however, overlooked or underestimated the value of Mauritius’ continuing reform of its sugar industry since 1975, to position it on a sustainable footing. In its 2019 Policy Dialogue Series on the role of Governments in developing agriculture value chains, the Collaborative Africa Budget Reform Initiative (CABRI), traced the evolution of the sugar industry in Mauritius and the proactive role of the government in establishing the framework for a sustainable sugar industry. CABRI (2019) traces the transformation of the Mauritius sugar industry from 1975, with the Government using the windfall from the high EU prices to gradually modernize the sugar industry and consolidate the small independent farmer community.

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By 1975, more than a decade before the commencement of the Uruguay Round of GATT in 1986, the Government took the deliberate decision to diversify the product base of the industry and invested in value-added products, in particular the generation of energy from the burning of bagasse, as part of its energy security strategy. This was facilitated by the Government providing fiscal incentives for investment in modern efficient power plants, and through the offering to sugar industry players favourable power purchase agreements. Cogeneration facilities were built alongside sugar factories and ran as separate entities, with arrangements made for the sale of bagasse to these power plants by smaller factories. Arrangements were also put in place for the storage of bagasse to allow for year round power generation. Through these initiatives, the sugar industry increased its contribution to national energy consumption from 7.6% in 1985 to 14.8% in 2017. By the time of the EU reforms in 2005, Mauritius was well ahead of the game in terms of diversification, private sector investment in modernization and strong government support. Building on this strong foundation, since 2006 Mauritius accelerated its transformation of its sugar industry to make it globally competitive and sustainable. In this phase, the country diversified its product base by moving up the value chain with refining, the production of specialty sugar and the production of ethanol from molasses. Mauritius similarly diversified its markets, sending refined and specialty sugar to the EU, the World Market, the US market, regional and the local market. The share of exports to the EU was 46.6% in 2017, 38% to the regional markets, 5.6% to the world market, 4.8% to the US market and 5% to the local market. In the process of the transformation, there was significant consolidation with the number of factories reducing from 11 to 4 and the number of independent farmers declining from 26,303 in 2005 to 12,937 in 2017. Importantly, factory capacities were maximized through the importation of raw sugar for refining. It is instructive that raw sugar exports were significantly curtailed with the installation of capacity for refining, ensuring high export revenues by moving up the value chain. Importantly also, the Government stepped up the regulation of the sector to secure the interests of independent cane farmers, by setting out clear obligations to workers and farmers in instances of factory closures. An insurance fund was also set up from accumulated reserves of the industry for price subsidization for independent farmers. The agencies of the State within the sugar sector were restructured to operate on a self-financing basis.

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Notwithstanding these extensive reforms of the Mauritius sugar industry, the EU sugar reforms impacted Mauritius negatively. Production declined from 520,000 tonnes in 2005 to 355,000 in 2017, with area harvested moving from 72,000 hectares to 54,000 hectares, and employment in the sector declining from 13,803 persons to 5925 over the same period. At the same time due to diversification of the country’s economy, the sugar sector’s contribution to GDP declined from 4.2 to 0.8% between 2005 and 2017. It was however the proactive policies of the Government, coupled with the investment of the private sector that restricted the fallout in the industry to 30% compared with production and revenue levels in 2005. Importantly, all the productivity indices (yield and cane conversion ratios), remained basically intact, despite the decline in production. CABRI (2019) identified key Government policies such as provision of power purchase agreements, fiscal incentives, mandating fuel ethanol blending, as facilitating private sector investment in modernization of factories, construction of cogeneration power plants and new refineries. Such investment by the private sector was estimated at nearly US$400 million since 1985. At the same time, the Government provided substantial support to independent cane farmers through extension services, research, establishing a stabilization fund to cushion the impact on farmers’ revenue when export prices are low, and strong regulation to protect the interests of works and independent farmer from the potential arbitrariness of factories. This tripartite partnership among Government, the private sector and farmers in creating an economically viable, socially resilient and environmentally sustainable industry, is to be commended to all sugar producing SIDS. Belize was deemed to be in the medium range of the cost of production continuum in 2005 and pundits emphasized that it could only survive the EU reforms by substantial investments in its industry to improve field and factory efficiency. Its quota under the Sugar Protocol was 40,569 tonnes. In the first year of the implementation of the 36% cut in prices by the EU (2006), Belize exported 55,567 tons of sugar to the EU, representing 57% of its total exports, at a value $65 million Belizean dollars. Total sugar exports then represented 23% of merchandize trade. Central Bank of Belize Annual Report (2006). With sugar exports accounting for nearly a quarter of merchandize exports and the industry occupying 43% of crop lands, according to Mitchell (2005), if nothing changed, Belize would have been severely

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impacted by EU reforms economically. On the social side, especially in the Northern cane growing districts of Corozol and Orange Walk, the impact on the local communities would have been particularly severe, as 30% of the population of those districts was employed in the industry, and poverty levels there were generally higher than the national average (Morris et al., 2017). Belize however responded positively to the announced EU reforms, with production fluctuating in the immediate years after the reforms, before increasing steadily from 2010 (Morris et al., 2017). By 2017, which was a watershed year when EU abolished all quotas and the EU prices were moving to equalize with world market prices, Belize increased its total exports to 158,028 tons, with the share of EU market moving from 57% in 2006 to 89%. At the same time earnings moved from $65 million Belizean dollars to $128 million Belizean dollars or 84% of total sugar exports. The real impact of total liberalization was felt in 2018, when Belize’s exports to the EU increase by 2% and earnings from that market fell by 25.2%, from $128 million in 2017 to $95.8 million Belizean dollars. However, by 2019, Belize’s exports to the EU increased to 174,059 tons or 21.2%, with earnings from the EU market moving up to $113 million Belizean dollars, an increase of 18% over 2018. In 2019 earnings from the EU market was 83% of total sugar export revenue, and sugar exports constituted 33% of merchandize exports. Since the EU reforms therefore, Belize increased its export volume to the EU by 313%, earnings by 173%, with the share of the EU market in total sugar exports moving from 57% in 2006 to 87% in 2019. What would have been responsible for this performance? Belize benefitted from substantial direct foreign investments in its sugar industry since the EU reforms. In 2012 in its traditional northern cane growing region, the American Sugar Refineries (ASR) group acquired majority stake in the Belizean Sugar Industries (BSI), formerly owned by sugar workers, and made substantial investments in field and factory operations, including building a cogeneration facility, which supplies 15% of Belizean energy demand. In 2016 a Guatemalan company, the Santander Group, acquired some 13,000 hectares of land in western Belize and established a sugar mill there. The operations of this new entity has been characterized by larger farms, allowing for mechanization of harvesting, better yields in the fields and greater factory efficiency compared to the traditional cane growing areas of Northern Belize (Morris et al., 2017).

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These investments have been facilitated by favourable Government policies in terms of power purchasing contracts, restructuring of the regulatory regime, including payment of independent farmers for bagasse. The EU accompanying measures resources were also directed at improving infrastructure in cane growing areas, restructuring the institutional framework to provide better extension service to farmers, as well as providing loans for the expansion of cane growing. In the face of EU declining prices, Belize took advantage of its continued duty free access to the EU market to increase exports through improved competitiveness. Belize is currently at the forefront of efforts to have CARICOM States uniformly implement the 40% CET on imported refined sugar, in order to give its industry the protection it requires to capture this market.

Responses and Positions of Varying Interests in the Jamaican Sugar Industry The sugar industry in Jamaica at the announcement of the EU reforms in June 2005 comprised eight factories (six state owned and 2 privately owned), some 6400 cane farmers, supplying approximately 42% of cane supplied to the factories, Government agencies responsible for regulating the sector, and over 7500 workers employed to the eight sugar factories. The Sugar Manufacturers Corporation of Jamaica (SMCJ), represents the interest of manufacturers, while the All Island Jamaica Cane Farmers Association represents the interest of cane farmers and three different trade unions represent the interest of the worker. Traditionally, the interests of manufacturers, workers and farmers seldom converge, born out of the inherent suspicion of the workers and farmers towards estate/factory owners and deeply rooted in slavery and the plantation system. However, when the EU announced the reform of its sugar regime, there was an immediate coming together of all interests, working in unison with the Government to mount a serious lobbying campaign for the EU to alter the intended reform measures in the interest of ACP sugar exports. The Government was quickly galvanized into action, engaging its diplomatic channels, and joining forces with the ACP Sugar groups in London and Brussels, as well with other Sugar Protocol countries in the Caribbean to impress upon the EU the dire social and economic consequences of the proposed 36% cut in prices between 2006 and 2009. Jamaica’s Minister of Agriculture, the late Roger Clarke, emerged as one of the leading faces of this campaign, covering in 2005 about 8 EU

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capitals over a seven day period to announce the impending doom that was about to befall Jamaica, on account of the reforms. Minister Clarke was ably supported by industry officials, including Ambassador Derick Heaven, then Executive Chairman of the Sugar Industry Authority, who had the privilege of addressing the EU Parliament. No less a person than then Jamaica’s Prime Minister P.J. Patterson, who himself a lawyer and one of the chief negotiators of the LOME Convention on behalf of the ACP in 1975 as then Foreign Trade Minister, intimated more than once in public that the EU reforms in respect to the Sugar Protocol could be challenged legally, given the “indefinite” duration of its provisions. The strategy was variously to reverse the reforms, delay their implementation and provide as long a period of adjustment as possible, and for the greatest compensation sum, when it was clear that the EU could not possibly spare the ACP of a price cut, when their own beet farmers were facing the same fate. Once it was clear that the reforms will proceed in the form of the 36% price cut, all attention was focused on the use of the accompanying measures. The Government moved swiftly to formulate an adaptation strategy, which was a precondition for receiving the financial support from the EU. While there was considerable stakeholder consultations by the Planning Institute of Jamaica (PIOJ), which spearheaded the formulation of the plans, there was divergent expectations among said stakeholders over the use of the funds. The Government was clear that the first call on the funds was the financing of the massive redundancy exercise that would accompany the divestment of inefficient, debt-ridden state owned estates. The second priority for the Government was addressing the dire social conditions prevailing in sugar dependent areas, where whole communities were poised to lose access to critical social services, once government owned factories were divested. The Government was highly sensitive that the drastic price cuts and the impending divestment of the estates could trigger significant socio-economic fall out in these dependent communities. Politicians in Jamaica would often remark that the sugar industry in Jamaica spans some 26 of the then 60 political constituencies, covering the populous southern belt of Jamaica, where poverty was higher than national levels. Any sudden social fall out could therefore spell political suicide for any government in power. It was also the case that government feared widespread labour unrest. In fact Jamaica’s 2 major trade unions and the political parties emerging from them, were born out of the

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labour unrests of 1938, in which the sugar industry featured prominently. Jamaica arguably has one of the most pro-worker redundancy legislation in the world and sugar workers were accustomed to receiving handsome redundancy payments each time there is a change of ownership in the sugar industry, only to be employed immediately after by the new owners. The Government was therefore extremely careful to engage the trade unions at every stage of the subsequent divestment process. In fact, all 7500 workers in the 5 government owned factories received full redundancy payments in December 2008, before even one single factory was divested. The then Minister frequently boasted that he was able to accomplish such great feat without one day of industrial action. The redundancy exercise cost the Government $1.9 billion Jamaican dollars. The Government was clear that the strategy for restructuring the industry must largely be funded by the private sector, hence the overwhelming reliance and insistence on privatization. The 2 private estates made a case for a portion of the accompanying measures resources, as they insisted that the reforms would also impact their operations, possibly triggering some amount of redundancy. The existing manufacturers never seemed to warm to diversification into energy, particularly ethanol. This might have been due to their lack of knowledge and familiarity with the technology associated with ethanol production. The private owners did not also demonstrate any appetite for buying the government-owned estates, although they engaged the Government for access to cane lands in order to maximize their factory capacities. The general feeling was that the financial state of the state owned estates was beyond turning around. At any rate, significant resources were required to modernize the government owned estates, which would necessitate significant borrowing by any local interest, unless they were extremely cash rich. The cane farmers’ main interest was for access to more lands to make their holdings viable, as well as access to the EU resources for funding cane expansion. The farmers were also interested in the preservation of the institutions of the State which regulate the industry, to ensure their interests were protected. For instance, with proposed diversification of the product base into energy, farmers were keen that the cane payment formula be adjusted to facilitate payment for bagasse, and to allow them to share in the value added energy products. Of course the workers’ main interest was to secure their rightful severance payment and the Trade Unions were keen that in the new divested entities, they could seamlessly

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secure bargaining rights to represent workers. Retraining of displaced workers was also of interest to the unions. Overall, the EU reforms seemed to have portended a sense gloom across the industry. Despite Minister Clarke’s valiant advocacy and lobby, he often remarked that the financial support from the EU was a ‘death grant’, euphemistically referred to as ‘accompanying measures’. This foreboding of gloom of course was not helped by the fact that in that very year, 2005, when the EU announced the price cuts, Jamaica experienced its lowest ever production of sugar in 60 years, 120,321 tonnes, according to the Economic and Social Survey Jamaica, 2005. The gloom was completed by the resurrected cry of a section of academia for Jamaica to abandon sugar given its historic ties with slavery and association with poverty. The government was however steadfast in moving ahead with its adaptation strategy.

Jamaica Government’s Response: The Jamaica Country Strategy (JCS) Government of Jamaica, cognizant of the critical role played by the sugar industry in its socio-economic development, appears to have taken an early interest in the developments with respect to the challenge of Australia, Brazil, and Thailand in 2003. Long before the determination of the WTO in August 2004, and the announced changes to the regime on June 22, 2005, the Office of the Prime Minister commissioned the PIOJ to undertake an assessment of Jamaica’s sugar industry and propose “strategic actions to ensure a sustainable and viable future for the industry”. The “Report on Strategic Options and Recommendations for the Sustainable Future of the Jamaican Sugar Industry”, dated June 6, 2005, was commissioned “with a sense of urgency”. One can well understand the sense of urgency that was attached to the request to conduct the assessment of the industry against the background of the proposed 36% price cut by the E.U. Indeed, Jamaica has been recognized “among the highest cost producers in the world” (Planning Institute of Jamaica, 2005). In fact, the Jamaica Country Strategy for the Adaptation of the Sugar Industry 2006–2015 (JCS I), formulated by the PIOJ in January 2006, estimated the cost of production for sugar in Jamaica to be US28 cents per pound, compared with the 2005 export price of US29 cents per pound. It was estimated by the same JCS I that by the end of the implementation of the 36% price reduction in 2009, and

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the overall impact of the reduction in the EU export price, there would have been a fall in the price paid to farmers of US19 cents per pound and “24 million euros per annum loss in foreign exchange earnings by 2010” (Planning Institute of Jamaica, 2006b, p. 12). The Government was also concerned that falling export prices would drive many small cane farmers out of cane cultivation, and significant fallout in employment for an industry which employed directly or indirectly some 38,000 persons (Planning Institute of Jamaica, 2006a). Apart from the direct loss of employment, the Government was also concerned about the loss of social benefits provided by government owned sugar estates, and potential impacts in terms of increased levels of crime and health problems in regions most affected. Adverse environmental effects were further identified as a possible consequence of any large-scale dislocation in the industry. Among potential environmental impacts identified were reduced potential for carbon sequestration as a result of loss of ground cover by reduced cane production, mushrooming of informal human settlements, and greater vulnerability of communities to natural hazards (Planning Institute of Jamaica, 2006a). Conscious of the dire economic, social, and environmental consequences of the proposed price cuts elaborated above, the Government took the decision to restructure the industry “to ensure a sustainable and viable future for the industry” (Planning Institute of Jamaica, 2005, p. 1). It is significant to note that the GOJ took a deliberate decision to restructure the industry on a more sustainable path, rather than abandoning the industry, as suggested by a number of studies. According to the PIOJ (2005, p. 6), “the potential of the industry to be viable under the threat of market reform has been questioned by a number of studies which have identified Jamaica as a high cost sugar producer that will not be able to compete effectively with lower cost producers, particularly among ACP and CARICOM countries, such as Mauritius, Guyana, and Belize.” One such study cited by the PIOJ (2005) was LMC (2004), which suggested that the industry can only survive in the long run with government support. An October 2005 study by the LMC entitled “Adaptation Strategy to Forthcoming Changes in EU Sugar Regime”, again identified Jamaica as a high cost producer, which would stand to lose some 25 million euros per annum after the full implementation of the EU price cuts in 2009. The study concluded that the Jamaican sugar industry could survive, but

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only barely and as long as the EU price does not fall below a threshold of 319.5 euros per tonne. The study was not optimistic that the sugar industry could survive based on diversification into other value-added products, such as refined sugar, ethanol, and cogeneration, given the prevailing prices of those products, and the high cost of Jamaica’s raw sugar production, that would be the base of these value-added products. In fact, the LMC (2005) recommended that Jamaica only persist in a sort of holding position, during the 10 years grace period when the EU assured guaranteed preferential price, that is, up to 2015, when the EU would have revisited its sugar regime. This position by LMC (2005) was supported later by a 2012 study by Clayton et al. Drawing on a 2009 study, Clayton et al. (2012) using the integrated assessment methodology to assess the impact of the reformed EU Sugar Regime on the sugar industry, concluded that the industry could not survive without continued significant subsidies. Clayton et al. (2012), therefore, recommended the diversification of sugar lands to intensive high value agricultural production to bolster revenue and reduce the impact of the sugar industry on the environment. Despite these grim prognoses, and the announced intention of St. Kitts and Trinidad to cease sugar production, Jamaica took the deliberate decision of remaining in sugar. According to the PIOJ (2005, p. 7), “the GOJ remains committed to supporting the island’s sugar industry in the short and medium-term, and to taking the necessary actions that will determine the sustainable future of the industry in the long-term.” The Jamaica Country Strategy 1 The PIOJ (2005), which was in response to the “urgent” request of the Office of the Prime Minister for an assessment of the sugar industry in the wake of the proposed EU price cut, essentially examined and proposed some strategic options to transform Jamaica’s sugar industry into a viable and sustainable enterprise. That report was essentially concerned with the economic viability of the industry, that is, the combination of products, production levels, and cost efficiency measures to reduce the cost of production of raw sugar and to enhance revenue streams. Whilst the report recognizes the pressing need to address the social fallout as well as to ensure environmental sustainability, the overriding focus was economic.

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The PIOJ Report (2005) basically recommended, as a base, the production of 187,000 tonnes of sugar to satisfy Jamaica’s preferential markets, as well as domestic demand for raw sugar, that is: • EU quota—116,000 tonnes • US quota—11,000 tonnes • Local demand—60,000 tonnes. The PIOJ proposed significant productivity increases, that would reduce the acreage of lands required to produce the 187,000 tonnes. The lands released would be used to engage the production of additional cane for ethanol and cogeneration. A second scenario looked at the production of an additional 83,000 tonnes of raw sugar for refinery to satisfy the local demand for refined sugar. All of these scenarios would be accompanied by not only productivity increases in the field, but efficiency improvements in field and factory through rationalization of factories, improved irrigation, refurbishing of factories, improved varieties, significant replanting of existing fields, and improved ratoon maintenance. The PIOJ 2005 Report evolved into the “Jamaica Country Strategy Adaptation of the Sugar Industry, 2006–2015”, (JCS) I, a more comprehensive document that extends beyond strategies for improving the economic viability of cane growing and sugar production, to addressing the social and environmental dimensions of the proposed fallout, as well as linking a sustainable sugar cane industry to Jamaica’s wider macro-economic progress. The overarching goal of JCS I is the building of a sustainable sugar cane industry over the period 2006–2015. The specific objectives of JCS I are: 1. Development of a sustainable private sector led sugar cane industry 2. Strengthening the economic diversification, social resilience and environmental sustainability of sugar dependent areas (SDAs) 3. Maintain progress towards macro-economic goals. In terms of the first objective, the JCS I essentially fleshed out the options presented in the PIOJ 2005 Report. Essentially, the plan was to produce 200,000 tonnes of sugar, 134,000 tonnes of molasses and 70,000 L of ethanol by 2015. This level of production of this mix of products would

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necessitate the production of 3,300,000 tonnes of sugar cane on 43,000 hectares, underpinned by productivity increases from 64.3 tonnes of cane per hectare in 2004 to 76.9 tonnes of cane per hectare in 2015, and 5.92 tonnes of sugar per hectare to 8.01 tonnes sugar per hectare over the same period. Recognizing the fiscal challenges of the Government, and the burden the five Government-owned factories were placing on the national budget, the JCS I clearly identified the private sector as the main player in the industry; hence, the immediate plan to divest all of Government’s holdings in the industry. The private sector was, therefore, expected to provide investments and management required to effect all the productivity and efficiency improvements in field and factory operations. The role of the Government was essentially regulatory and to provide the enabling policy environment for the development of the ethanol and cogeneration side of the industry. The Government was also expected to invest through the proposed EU funding, in improvements to cane roads and irrigation, considered public goods, as well as the ceding of a cane expansion fund to facilitate the expansion of cane planting and replanting by independent farmers. Consistent with Objective 2, the JCS I formulated several measures for the affected sugar dependent areas “under comprehensive Area Development Programmes that will combine economic, social and environmental components in an integrated approach to rural sustainable development” (Planning Institute of Jamaica, 2006a, p. 24). In terms of the economic component, this second objective is closely aligned with Objective 1, which focused on a strong, viable private sector led sugar cane industry. The thinking was that a restructured, strong, private sector led and viable sugar cane industry would have the impact of retaining jobs in the industry, and displaced sugar workers could operate in the industry as new cane farmers. Generally speaking, a strong sugar factory has a significant multiplier effect on sugar dependent communities. It is not clear, however, the extent to which JCS 1 took into consideration the failures of privatization in the past to improve standard of living of the SDAs or to improve the financial health of the industry. The proposed productivity and efficiency improvements in field operations proposed under Objective 1 was expected to have the effect of releasing lands formerly in sugar cane. A critical part of the economic component of Objective 2 was to engage those lands in alternative agricultural enterprises, which would absorb some of the displaced workers.

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The Ministry of Agriculture was expected to incorporate those lands in its many programmes, supported by quality extension and marketing services. The strategy further called for diversification of economic activities beyond agriculture into various small businesses and entrepreneurial activities to be supported by business counselling, micro-financing, technical advice, and general business facilitation. In order to enhance rural development, Objective 2 of JCS I advocated for the installation of critical infrastructure and amenities in SDAs, to encourage those residents to remain in rural areas, and not to compound the existing problem of rural–urban migration. The infrastructures/amenities include proper roads, electrification, improved water supply, as well as modern telecommunication services. The infrastructure was intended not only to improve quality of life in SDAs, but also to support economic activities. As stated earlier, the sugar dependent communities accessed several social services from the estates. With the contemplated privatization of the Government-owned estates, the JCS I addressed the continuation of services to these communities, formerly provided by the estates. These services include schools, clinics, water supply, electricity and sporting/recreational facilities. Beyond access to social services, modern amenities and alternative livelihoods, the social components of Objective 2 address compensation to displaced workers in the form of redundancy payments, and continued access by the most vulnerable to the GOJ social safety net programmes such as the Programme for Advancement through Health and Education, (PATH).1 Particular attention was placed on the housing needs of workers who occupied estate houses, mostly barracks, as well as the regularization of those who informally occupy estate lands. In relation to the environmental component of Objective 2, the JCS I sought to ensure that “alternative use of sugar lands take place in conformity with existing land use zoning for these areas” (Planning Institute of Jamaica, 2006b, p. 27). The strategy also made reference to the Environmental Code of Practice formulated in 2004 by the National Environmental and Planning Agency (NEPA), in collaboration with industry players. The Environmental Code of Practice outlined all the negative impacts on the environment arising from field and factory 1 PATH is a conditional cash transfer programme administered by the Government targeting poor and vulnerable households, and providing cash grants. It was established in 2002.

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operations in the industry. The strategy promised to “provide support for the implementation of the Environmental Code of Practice on lands that remain under cane cultivation within targeted sugar dependent areas, including proper soil conservation and water use practices, management of agro-chemical use, prevention and control of pollution” (Planning Institute of Jamaica, 2006a, p. 27). The environmental component was the least elaborated of the three components of Objective 2. In the logical framework for instance, the objective in relation to the environmental component simply reads “land use and environmental management strengthened in sugar cane areas”, with the objectively verifiable indicator being “no violations of zoning and environmental regulations on existing and former sugar lands”. This, however, does not address specifically the many other environmental issues in the industry before divestment, and who will have the responsibility of remedying the huge legacy of environmental breaches. In fact, the strategic environmental assessment of the sugar industry that should have preceded and informed this component of JCS I was only conducted in 2008. On the positive side, the JCS I within Objective 1, set targets for the Government to put in place the requisite policy and regulatory framework to support the development of alternative (renewable) energy, including ethanol and cogeneration. Similarly, targets were set for the production of 70 million litres of anhydrous ethanol in anticipation of the promulgation by the GOJ of an E-10 mandate. The additional environmental problems, particularly relating to the generation of more dunder and its appropriate treatment and disposal were not fully ventilated in the strategy. The Government’s main macro-economic policy goals are contained in its Medium Term Socio-Economic Policy Framework (MTSEPF), which outlines specific policy goals and performance targets in the economic, social, environmental, and governance sectors. The goals are established on a four-year rolling basis and are updated annually. The MTSEPF also serves as a monitoring and evaluation tool, which a number of the country’s development partners use to measure the country’s progress in relation to projects and programmes funded by them. The JCS I, through Objective 3, is simply ensuring that the stated policy goals and targets in the MTSEPF are not derailed by the adaptation process occasioned by the reform of the EU sugar regime. The strategy identified two areas of concern, that is, loss of foreign exchange revenue projected to be 184 million euros over the 2006–2015 period, as well as

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the additional expenditure required by the Government “to ensure that the goals and objectives of the country strategy are met and desired results achieved” (Planning Institute of Jamaica, 2005, p. 28). The JCS I elaborated a comprehensive mechanism to effect implementation of the strategy. The main driver of implementation of JCS I was to be the Sugar Transformation Unit of the Ministry of Agriculture, which was established in 2006, pursuant to Section 3.2 of the JCS I. The strategy further outlined specific roles and responsibilities for a number of other agencies of the state, in relation to the implementation of specific components. The implementation required financing of US$672.3 million over the period 2006–2015, and the JCS I itself was to be submitted to the EU for financial support, which turned out to be some 84 million euros under the accompanying measures. The EU funds were earmarked principally for redundancy payments, and to deal with the Sugar Area Development Plans (SADPs), addressing the economic, social, and environmental components of sugar dependent communities. Most of the activities under Objective 1 were to be funded by the private sector under the divestment process. The strategy was designed with “sufficient flexibility” to allow for review and adjustment based on the progress of implementation over the 10 years. In this regard, by 2008 the JCS I was reviewed, giving rise to the JCS II, taking into account a number of developments that impacted the early years of the implementation of JCS I. The Jamaica Country Strategy II, 2006–2020 The JCS I was revised in August 2009, by the Ministry of Agriculture and Fisheries, giving rise to JCS II. The revision of JCS I was occasioned by what the Jamaica Country Strategy for the Adaptation of the Sugar Industry, 2006–2020 characterized as “changing circumstances in the domestic and international environment for the sector” (Ministry of Agriculture & Fisheries, 2009, p. 4). Among the changing circumstances in the international arena was the unilateral renunciation of the Sugar Protocol of the Cotonou Agreement by the EU in 2009, its replacement with the Economic Partnership Agreement which was eventually signed in 2008, and the full implementation by the EU of the 36% price cut for ACP sugar in October 2009.

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Internationally also in 2008, the world was plunged into a global financial crisis, as well as a food crisis, manifested in wide variations in food and fuel prices. The global financial crisis affected investments in developing countries and emerging markets, and this was cited by Infinity Bio-Energy, the sole bidder for the Government’s sugar assets, as their reason to abandon their takeover plans in 2008. On the domestic front, the privatization programme which was a key component of JCS I did not begin to materialize until 2008 and was completed in 2010 with the final handing over of Bernard Lodge, Monymusk, and Frome sugar estates to COMPLANT International, a Chinese firm. At the same time, the adaptation strategy had to take cognizance of several developments in the policy environment, namely the Green Paper on Energy of 2005, the Policy Options Paper on Ethanol Use in 2008, “both of which are about to be included in the National Energy Policy, as well as the framework of environmental legislation promoted through the National Environment and Planning Agency (NEPA)” (Ministry of Agriculture & Fisheries, 2009, p. 6). Furthermore, the time horizon of the strategy was extended to 2020, not only to reflect delays in implementing JCS I, particularly the privatization, but to be consistent “with the prospective of other major policy initiatives in Jamaica” (Ministry of Agriculture & Fisheries, 2009, p. 4). JCS II whilst recognizing the new developments in the domestic and international arenas, as well as the protracted privatization process, which essentially delayed the implementation of the entire JCS I, by and large revalidated the objectives and relevance of JCS I. Whilst the delay in the privatization process impacted the targets of JCS I in relation to Objective 1, namely investments by the private sector to rehabilitate field and factory and expand cane planting, irrigation, etc., it provided the opportunity for a fleshing out of a number of objectives in relation to the social and environmental dimensions of the transformation. On the social side, all 7400 workers on GOJ estates were made redundant in December 2008, even though the divestment had not materialized. Some 3600 of these workers were deemed vulnerable by virtue of their earnings up to December 2005. The necessary baseline had been established for these workers, which helped to shape the interventions proposed for social transformation. All of these vulnerable workers were provided with grants to cushion the impact of job loss, in addition to redundancy payments to transition them into alternative livelihoods.

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On the environmental side, although the JCS I identified the Environmental Code of Practice agreed between NEPA and the industry as the major tool which would guide the environmental transformation, in 2008 a strategic environmental assessment (SEA) was conducted, which clearly identified critical non-compliance with the Code of Practice. This SEA however, which concentrated largely on conditions on the Government estates, according to the Ministry of Agriculture and Fisheries (2009, p. 14), “led to the adoption of good environmental practice across all areas on the JCS reform programme, including the application of an environmental impact checklist for all small business proposals”.

Conclusion The long reliance of Jamaica’s sugar industry on preferential prices in Europe, that is, for greater part of the twentieth century and up to the time of the EU reforms in 2005, served to deepen the dependency engendered by the plantation system for well over 300 years. So entrenched was this dependency, that it paralyzed an independent country from taking proactive steps to restructure its sugar industry, even in the face of the clearest signals that the preferential conditions would inevitably come to an end in the wave of global trade liberalizations towards the end of the twentieth century. The private sector, after the first wave of investments in the post-World War II period, made no substantial investments in their enterprize to improve efficiency, to increase competiveness and increase profits. Throughout the Caribbean, the Tate and Lyle controlled estates were abandoned partially or wholly in the late 1960s to mid-1970s, in the face of declining productivity, to be rescued by governments. These governments, while pumping significant resources in clearing debts of the estates, exercised little imagination and innovation in turning around their sugar industries, in terms of efficiency improvements and diversification of the product base, unlike other ACP producers such as Mauritius. This rendered Caribbean sugar producing countries the highest cost producers among sugar protocol countries. It is significant to note that these very high cost producers were at the same time the most dependent on the EU market, confirming Thompson’s (1957) designation of the Caribbean as “the locus classicus of plantation societies”. The divergent interests of the various players in the sugar industry in Jamaica certainly did not augur well for an auspicious beginning of

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the transformation process. A review of selected cases of ACP countries, notably Mauritius, reveals that notwithstanding the fall out in the EU market, and even against background of fairly high production costs, sugar industries can be turned around, if the Government takes a proactive lead and galvanizes the support of the private sector. On the Government’s part, the belated quick action to promulgate a strategy for transformation, is commendable. It is also noteworthy that this strategy, in contrast to previous GOJ interventions, not only addressed the economic, but the social and environmental aspects of the industry, although it could be argued that this was in response to the EU’s injunction that it would only fund strategies that addressed “broader social, economic and environmental consequences of the reform”. This was a major departure from previous interventions in the industry, where the objective and motivation were largely economic, nebulous on the social dimension, and with no mention whatsoever in relation to the environmental dimension. Clearly, the Government was foolhardy in leaning completely on the private sector to fund the massive restructuring programme required to move production and productivity so dramatically in 10 years, given past experience with divestment. The reliance on privatization to create a vibrant sugar industry with ‘trickle down’ socio-economic benefits to SDAs, smacks of neo-liberal thinking that dominated the Government, which robs it of the creativity in setting progamme that were more deliberate in creating an industry that was economically viable, socially just and environmentally sustainable. The rest of this work will look in detail at the sugar dependent area of Monymusk to see how it fared at the onset of the reforms of the EU sugar regime, and how the GOJ Adaptation Strategy impacted it.

References Agricultural Economics Research Institute. (2005). Impacts of the EU sugar policy reforms on developing countries. Agricultyral Economics Institute. Alexandraki, K., & Lankes, H. (2004). The impact of erosion on middle-income countries (IMF: IMF Working Paper WP/04/169). Central Bank of Belize. (2006). Central Bank of Belize annual report, 2006. Belize City.

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Clayton, A., K’nife, K., & Spencer, A. (2012). Using integrated assessment to develop policy options—Trade, land use and biodiversity: A case study of the sugar industry in Jamaica. World Journal of Entrepreneurship, Management and Sustainable Development, 8(2/3), 170–182. https://doi.org/10.1108/ 20425961211247770 Collaborative Africa Budget Reform Initiative. (2019). The sugar cane value chain in Mauritius. CABRI policy dialogue: The role of governments in developing agriculture value chain. European Centre for Developing Policy Management. (1998). Towards an ACP position in exploring ACP response to the EU proposal for Regional Economic Partnerships (LOME Negotiating Brief 4). Feuer, C. H. (1984). Jamaica and the sugar worker cooperatives: The politics of reform. Westview Press. Garside, B., Hill, T., Marques, J., Seeger, C., & Thiel, C. (2004). Who gains from sugar quotas? (DESTIN DV406 Research Project). London School of Economics and Overseas Development Institute. International Monetary Fund. (2003). Public Information Notice: IMF concludes 2003 Article IV consultations with St. Kitts and Nevis. Public Information Notice No. 03/131. Lal, P., & Rita, R. (2005). Potential impacts of EU sugar reforms on the Fiji sugar industry. Pacific Economic Bulletin, 20(3) @ Asian Pacific Press. Levy, H. (2000). The social action centre story 1958–1998. In S. F. Brown (Ed.), Spitting in the wind: Lessons in empowerment from the Caribbean. Ian Randle Publishers in association with the Commonwealth Foundation. LMC International. (2004). EU sugar reform: The implications for the development of LDCs. LMC International. (2005). Adaptation strategy to forthcoming changes in EU sugar regime. LMC International. Milner, C., Morgan, W., & Zgovu, E. (2004). What all ACP sugar protocol exporters lose from sugar liberalization? The European Journal of Development Research, 16(4), 790–808. Milner, C., & Zgovu, E. (2004). Would all ACP sugar protocol exporters lose from sugar liberalization? The European Journal of Development Research, 16(4), 790–808. Ministry of Agriculture and Fisheries. (2009). The Jamaica country strategy for the adaptation of sugar industry 2006–2020. Mitchell, D. (2005). Sugar in the Caribbean: Adjusting to eroding preferences (World Bank Policy Research Working Paper 3802). Morris, E., Angel, A., & Noe, N. (2017). The impact of falling sugar prices on growth and rural livelihoods (IDB: Technical Note No. IDB—TN—1237).

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Nicholls, G. (2014). Selected debt restructuring experiences in the Caribbean. In C. Yartley & T. Turner-Jones (Eds.), Caribbean renewal tackling debt challenges. https://doi.org/10.5089/9781484369142.071 Planning Institute of Jamaica. (2005). Report on strategic options and recommendations for the sustainable future of the Jamaican sugar industry. Kingston. Planning Institute of Jamaica. (2006a). Economic and social survey Jamaica, 2006. Planning Institute of Jamaica. (2006b). The Jamaica country strategy for the adaptation of the sugar industry 2006–2015 (JCS I). Richardson, B. (2009). Sugar: Refined power in a global regime. Palgrave MacMillan. Richardson, B. (2013). Cut loose in the Caribbean: Neoliberalization and the demise of the Commonwealth sugar trade. Bulletin of Latin American Research. ISSNO261.3050. Thompson, E. T. (1957). The plantation: A bibliography. Pan American Union. Tyers, R., & Anderson, K. (1986). Agricultural policies of industrial countries and their effects on traditional food exporters. Economic Record, 62(4), 385– 399. Williams, G., & Ruffer, T. (2003). Addressing the impact of preference erosion in sugar on developing countries. Oxford Policy Management and LMC International Limited.

CHAPTER 7

Conditions of the Monymusk Sugar Dependent Area Before the JCS

Introduction Chapter 2 describes the framework within which social relations develop in Jamaica spanning slavery and the colonial era. Beckford (1972) described this framework as a plantation system, under which the entire society was organized for the sole purpose of producing sugar for export to Britain. Within this system, Harrison (2001) asserted that no effort was made to establish the “basis of a civil society”. Slavery was characterized by its extreme brutality, and only such minimal social systems and infrastructure were installed as to ensure that the slaves could function as a critical factor of production. The abolition of slavery in 1838 and the rise of the peasantry thereafter did not significantly improve the social conditions of the masses. Whatever semblance of a social system that was in place was pioneered by the church, and there was a systematic and deliberate effort to either deny ex-slaves access to good land or to confine them to marginal lands. The deplorable conditions prevailing in the immediate post-Emancipation period sparked the Morant Bay Rebellion in 1865. The colonial administration largely existed to protect the interest of the planter class and little attempt was made to improve social conditions in the colonies. To the extent that sugar was and even today remains the dominant crop in Jamaica, the social conditions of sugar dependent areas would © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_7

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have significantly defined the overall social conditions in the country. In fact, it was the socio-economic conditions in the sugar belt of Jamaica that triggered the 1938 riots, which marked the beginning of the movement for Independence and self-government. Between 1897 and 1961 there were some five (5) commissions of enquiry into the economic and social conditions in Jamaica’s sugar industry. All these activities coincided with the rapid expansion of the sugar industry, peaking at a production of over 500,000 tonnes in 1965. After 1938, there were some attempts at addressing the social conditions of sugar workers, but not from the standpoint of comprehensive community and social development. Most of the legal, institutional, and social initiatives were within the context of improving the welfare of the sugar worker, to ensure that he/she was a viable factor of production. The Sugar Industry Welfare Fund was established in 1948 and was financed by a cess on sugar to provide such basic amenities as was required by the worker. The sugar estates became, and continued to be up to eve of the implementation of the Adaptation Strategy in 2006, the central pivot of sugar growing areas, providing housing, utilities, schools, clinics, and sports/recreational facilities for the workers on the estates, and in some instances for the wider communities, consistent with what Richardson (2015) observed to be typical in sugar exporting countries across the ACP. In terms of the environment, conditions in the sugar industry would have been even worse than social conditions. In the first instance, serious concern for the environment only emerged as a global issue in the 1960s and gathered particular momentum after the 1992 Rio Conference. Jamaica commenced establishment of its legal, regulatory and institutional framework for environmental management in the early 1990s. At the same time, the industry being the largest agricultural industry in Jamaica, and the sole industry before the emergence of Bauxite processing in the 1950s and light manufacturing in the 1960s, would have had a serious impact on the environment. SDAs would have been confronted with issues of contamination of ground water and surface water through improper treatment and disposal of effluent from the industry, air pollution from stack emission and burning of cane for harvesting, general pressure on water resources and land degradation. The fact that the industry long predated Jamaica’s system of environmental regulation

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would pose some challenge to the fostering a culture for good environmental stewardship in the industry, as well as in relation to the financial burden of retrofitting and employing new technologies in the industry. What was the situation at the beginning of the last round of reforms in the industry which commenced in 2008, and was occasioned by the 2005 reform of the EU sugar regime? By 2008, when the implementation of the Government’s Adaptation Strategy commenced in earnest, only eight (8) sugar estates existed in Jamaica, down from 18 at the peak of the industry in 1965, with the Government controlling 70% of the industry’s output through the St. Thomas, Bernard Lodge, Monymusk, Frome, and Long Pond and Hampden estates. Sugar production in Jamaica was largely concentrated on the Southern Plains of the Island, except for the Long Pond and Hampdem areas of Trelawny in the north of Jamaica, which only accounted for 4.5% of sugar in 2008. Although production in the 2007/2008 crop was only 140,672 tonnes, compared with peak production of over 500,000 in 1965, the estates played no less a role in supporting sugar dependent communities. Reduced export and lack of investment in social infrastructure meant that a badly deteriorating social infrastructure was supporting more and more people, resulting in worsening living conditions. The fact is, there was not a commensurate reduction in the number of people dependent on the estates, with the decline in production and exports, since generations of people not directly employed to the industry remained on the estates. The relative lack of economic diversification also meant that an economically weakened industry continued to be the mainstay of sugar communities. Obviously, the state of play could not continue with privatization of Government owned estates, which was the main strategy of the Government for the restructuring of the sugar industry. No private sector entity would have been willing to take on the huge burden of supporting whole communities and people who bore no relation to their enterprize. Addressing the social ills of SDAs was therefore imperative for the Government, both to cushion the fallout in the industry from the EU reforms, as well as satisfy a critical precondition for successful divestment. This chapter will examine the social and environmental conditions prevailing in 2008, in the sugar parishes of Jamaica generally, as well as the specific communities and populations directly dependent on the industry. This characterization will form the baseline for the study before the roll out the JCS by the Government, through the Sugar Transformation Unit of the Ministry of Agriculture.

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Characterization of Jamaica’s Sugar Parishes The 2008 Survey of Living Conditions (SLC) (2012), published jointly by the Planning Institute of Jamaica (PIOJ) and the Statistical Institute of Jamaica (STATIN), provides an interesting background on social conditions in the sugar growing parishes, compared with the overall situation in Jamaica. Table 7.1 provides a socio-economic profile of the sugar parishes compared to Jamaica as a whole. Critical indicators selected include poverty rate, household size, mean per capita household consumption, school attendance, health insurance coverage, house ownership, access to critical utilities, and literacy rates. These indicators together give a fair idea of the social conditions in these parishes. Based on the 2008 SLC, the poverty rate was 12.3%. It is interesting to note that four of the six sugar parishes had poverty rates above the national average. The low poverty rate in St. Catherine reflects the situation in the Portmore area, which is a large urban centre with generally highly educated people, usually employed in the capital city Kingston. St. Catherine is perhaps the least typical of the sugar parishes due to the large urban population centres of Spanish Town, Portmore, and Old Harbour, which are increasingly dormitory communities of people working in the capital city. The reported low prevalence of poverty in Westmoreland (10.7%) requires some investigation, as Westmoreland remains a parish where sugar production is the dominant economic activity in the parish. The unemployment rate in the sugar parishes except St. Elizabeth, are all above national average. The situation in St. Elizabeth reflects of a high percentage of independent small farmers in that parish, St. Elizabeth being the parish with the largest agricultural output in Jamaica. All sugar producing parishes had per capita consumption below the national average of $214,015, with the exception of St. Catherine where the mean per capita consumption was $248,733. In terms of health insurance coverage, an analogous situation is seen, with only St. Catherine having a greater coverage than obtained nationally. This indicator is important within the context of sugar dependent communities, which typically access health services from clinics run by the estates. School attendance, measured by the number of days in school within a twenty (20) day period, shows that most sugar parishes were performing round about the national average, with St. Thomas, Clarendon, and St. Elizabeth marginally below the average. The indicator reflects the

3.2 56.3 12.4 174,112 14.4 18.9 18.7 46.9 2.4 43.1 83.9 52.1 45.2 89.2

Mean Household Size Male Headed Household, % Unemployment Rate, % Mean Per Capita Consumption, $ Prevalence of Poverty, % School Attendance (Out of 20 days) Health Insurance Coverage, % House Ownership, % Households Squatting, % Access to Indoor Tap, % Access to Electricity, % Access to Water Closet, % Prevalence of Pit Latrine, % Literacy Rate, %

Source Survey of Living Conditions, 2008

St. Thomas 3.3 50.8 13.6 248,733 7.5 19.2 26.2 66.3 0.6 64.3 95 75 24.8 94.3

St. Catherine 3.4 53.8 19.6 187,639 15 18.7 16.5 64.3 0.7 42.2 91.3 54 42.1 90.3

Clarendon

Socio-economic Profile of Sugar Dependent Parishes, 2008

Indicator

Table 7.1

3.4 55.7 10.4 154,613 30.6 18.9 10.4 65.9 0.3 26.6 89.6 48.7 50 91.2

St. Elizabeth 2.7 62.6 11.3 188,322 10.7 19.3 14.1 80.1 1.7 34.7 85.9 48.2 47.7 84.7

Westmoreland

3.3 61.6 11.5 159,702 19 19.1 17.9 79.2 0.2 38 89.5 56.7 41.8 87.6

Trelawny

3.2 54.3 10.6 214,015 12.3 19.1 21.1 62.7 0.9 54 93 70.3 28 91.7

Jamaica

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sustained efforts of the Government in ensuring improved attendance at the primary/secondary levels, through support from the PATH Programme and the School Feeding Programme. With respect to overall literacy though, all the sugar parishes, with the exception of St. Catherine, had literacy rates below the national average of 91.7%. Juxtaposed with the more favourable school attendance scenario, it would seem that illiteracy is more prevalent among the aged population. All sugar producing parishes, except St. Thomas, performed above the national average with respect to house ownership. St. Thomas at 46.9% was way below the national average of 62.7%, with Trelawny and Westmoreland at 79.1% and 80.1% respectively. Even though most of the sugar parishes fared above the national average, house ownership is a very emotive and critical issue. This was therefore an important indicator for the Sugar Adaptation Strategy, as housing conditions on the sugar estates have consistently been the subject of a number of interventions by the Government over time. Consistent with the house ownership profile, the incidence of squatting in the sugar parishes was largely below the national average of 0.9% of households surveyed. The percentage of households surveyed that was squatting in St. Thomas, however, is an alarming 2.4%, which was 2.5 times the national average, and reflects the relatively low percentage of house ownership among the households surveyed (46.9%). Based on all the indicators examined, the most telling reflection of poor social conditions in sugar parishes is access to key utilities. Every single parish, except, predictably St. Catherine, was well below the national average with respect to access to piped water, electricity, and water closet, with Westmoreland recording the lowest access in all instances. It is interesting that Westmoreland had the lowest access to utilities, even as it had the best figures in home ownership. This may be partially explained by the very high prevalence of people owning portable houses made of board in Westmoreland, which they move from one parcel of rented land to the next. In this context, the 80% home ownership might not fully reflect the reality of the ownership situation, as house ownership without land ownership results in lack of access to critical utilities on a sustained basis. Based on the situation with access to utilities, it is not surprising that all sugar parishes, with the exception of St. Catherine, had a very high prevalence of pit latrines, higher than the national average of 28% of households surveyed. The social indicators included in this analysis at the level of the parish reveal that sugar parishes were worse off socially than the average situation

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in Jamaica. To the extent that sugar was by and large the dominant activity in the economies of these parishes, with the exception of St. Catherine, it would seem that the social situation in the sugar dependent communities weighed heavily on the social situation in the parishes overall.

Social Conditions in the Monymusk, Frome and Bernard Lodge SDA and Justification for Selecting Monymusk SDA as the Subject of the Study As outlined in Chapter 6, the Government’s response to the changes in the EU’s sugar regime was the promulgation of an Adaptation Strategy (JCS), which not only sought to ensure the economic viability of the sugar industry, but importantly to address the economic, social, and environmental sustainability of sugar dependent areas. This represents the most comprehensive and deliberate attempt at fixing decades-old social issues in sugar dependent communities, despite at least two (2) major interventions in the industry in the past, and a plethora of commissions of enquiry. The JCS proposed the formulation of SADPs as a framework within which to pursue actions in furtherance of Objective 2 of the strategy. In order to formulate the SADPs it was necessary to undertake an assessment of the socio-economic conditions in these areas prior to the divestment of the government owned estates. The two (2) principal agencies of the State responsible for driving the implementation of the JCS were the Sugar Transformation Unit (STU) of the Ministry of Agriculture and Fisheries and the SCJ Holdings Limited, charged with the responsibility to manage all its sugar lands, and undertake on behalf of the Government all its post divestment obligations. The estates provided housing directly for a number of its employees— barracks for cane cutters, which were intended to be temporary houses during harvesting time, with communal facilities; and stand-alone houses of different sizes, allocated to other categories of workers, with the size of the house allocated commensurate with the worker’s position in the hierarchy. With divestment, the Government had an obligation to remove and resettle those legitimate workers/residents who were provided housing by the estates. The housing provided by the estates, however, grew to attract many other residents, evolving in instances to full blown informal

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communities. In other instances, settlements emerged on estate lands which became full blown communities which needed to be regularized. A 2010 survey by the SCJ Holdings revealed that there were some thirty informal communities existing across the six (6) divested estates of St. Thomas Sugar, Bernard Lodge, Monymusk, Frome, Long Pond, and Hampden. These thirty (30) communities hosted over 10,000 families, comprising between 30,000 and 40,000 people. Only 33% of these occupants were either current employees of the estates or were former workers or relatives of former workers. The remaining 66% were second and third generations who had no relationship with the sugar estate. Housing conditions were generally deplorable. In respect to the legitimate allottees of estate houses, a more detailed survey was conducted on this segment of the sugar area population, since the Government’s first social obligation under the divestment was to resettle these people. The January 2010 survey by SCJ Holdings was conducted in Bernard Lodge, Monymusk, and Frome, which comprised some 70% of the sugar industry. The survey (see Table 7.2) shows some 2256 legitimate households with 251 or 11.1% in Bernard Lodge, 1000 or 44.3% in Monymusk and 1005 or 44.5% in Frome. Together these 2256 households hosted 6560 people, 670 in Bernard Lodge, 2799 in Monymusk, and 3091 in Frome. 78.9% of the households in Bernard Lodge were headed by males, with the corresponding figures for Monymusk and Frome being 60.1% and 58.4% respectively. The majority of these households’ heads were single, 40% for Bernard Lodge, and 46% and 41.6% for Monymusk and Frome respectively. This relatively high percentage of households headed by a single parent, usually mothers, is consistent with the weak family structure, which Thompson (1957) identified as both a characteristic and legacy of the plantation economy. The unemployment levels within these households were much higher than both the national and the parish figures in 2010. Only between 60.3% and 69.6% of these household heads were employed. The unemployment rate for 2010 in Jamaica was approximately 12%, according to STATIN. An analysis of employment history of these households is particularly interesting. Only 52.6% of the household heads in Bernard Lodge was currently employed to the estates, while the corresponding figures for Monymusk and Frome were a mere 22.9% and 19.91% respectively. Even more interesting is the fact that in Frome, 72.9% of the household heads in 2010 had never been employed to the estate. The corresponding

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figures for Bernard Lodge and Monymusk were 11.2% and 50% respectively. It is also significant that a large number of the household heads had been retired and still resided on the estates, that is, 36.3, 27, and 21.7% respectively for Bernard Lodge, Monymusk and Frome respectively. This information suggests a high level of dependency on the estates by people with either no formal working connection with the estates, or people who would have severed ties with the estates through retirement. This speaks to the absence of alternative housing facilities for a substantial number of people residing in estates houses, as well as failure on the individual’s part, or on the part of the State to provide adequately for retired sugar workers. In relation to housing, the survey showed that 74.9% of the structures on Bernard Lodge were built by the estate, with 15.5% built by the residents or their family members. In the case of Monymusk, the corresponding figures were 37.8% and 36% respectively. The level of nonresponse to this question was particularly high in Monymusk, that is, 17% of the households. In Frome, only 12% of structures occupied by the 1005 households were built by the Estate, with 82.5% built by the residents. This survey is consistent with the findings of the 2008 Survey of Living Conditions, which showed 80.1% of the participants in that survey owning their houses. As pointed out earlier, this is characteristic of Westmoreland, with a high incidence of residents owning board houses which they moved from place to place. This is further supported by the survey which shows that Frome Estate had the highest number of households paying lease (15.4%), compared with 1.6% in Monymusk, and 0% in Bernard Lodge. Most of the households in fact enjoy rent free occupation, that is, 94% in Bernard Lodge and Monymusk, and 78.2% in Frome. The average size of houses ranged from three rooms in Bernard Lodge to four rooms in Frome. The houses in the Bernard Lodge Estate seem to have the best facilities, with 51.7% outfitted with indoor water closet, and 43.41% using pit latrines. The corresponding figures for Monymusk are 30% and 41.7% respectively, and for Frome, 36% and 55% respectively (see Table 7.2). The worrying thing about the Monymusk situation is the alarming 28% of the 1000 households that had no reported toilet facilities at all. In every instance, the situation on the estates with respect to access to water closet was worse than what obtained at the parish level, and the national level. Similarly, for Bernard Lodge and Frome, more households were using pit latrines on the estates than what occurred in the parishes and

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Table 7.2 Social Profile of Bernard Lodge, Monymusk, and Frome Sugar Estates 2010 Indicators

Bernard Lodge

Monymusk

Frome

No. of Households No. of Occupants in Households % of Male Headed Households % of Household Heads: Single Married Common-Law % Employed Employment History (%) Currently with estates Not employed to estate: Never Retired Housing built by (%) Estate Resident/Family member Terms of Occupancy (%) Not paying rent Paying rent Paying lease Average Size of House, No. of Rooms Indoor Plumbing (%) Pit Latrine (%) Source of Electricity (%) Estate JPSCo Informal None Source of Water (%) Estate NWC None

251 670 78.9

1000 2799 60.1

1005 3091 58.4

40 24 28 69

46 20 26.5 69.6

41.6 27.2 20 60.3

52.6 47.4 11.2 36.3

22.8 77.2 50 27

19.9 80.1 72.9 21.7

74.9 15.5

37.8 36

12.3 82.5

94 3 3 51.7 43.4

94 1.6 3 3.5 30 41.7

78.2 8 15.4 4 36 55

61.4 24.7 5.6 7.2

34.7 12.7 14.4 13.1

9.2 62 12.7 11.4

66.1 11.6 1.5

31.5 11.2 15

9.3 56 2.3

Compiled from data from SCJ Holdings Limited Survey, 2010

nationally, for Bernard Lodge, and nationally for Frome, based on the Survey of Living Conditions data. For Monymusk, the prevalence of pit latrines on the estate was only slightly lower than the parish figure, but much higher than the national level (see Table 7.2).

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The level of dependence of the households on the estates for the provision of basic amenities varied from estate to estate, with Bernard Lodge seemingly the most dependent. Some 61.4% of households in Bernard Lodge obtained their electricity from the Estate, 24.7% from the Jamaica Public Service Company Limited (JPSCo.), and 3.6% from informal arrangements, and 5.6% had no access. The corresponding figures for the Monymusk are 34.7, 12.7, 14.4 and 13.1% respectively. Households on the Frome Estate depended the least on the estate for electricity—a mere 9.2%, with a significant 62% accessing electricity from JPSCo. Again, this is consistent with the house ownership pattern in Westmoreland. Notwithstanding this, 12.7% of households had informal arrangements for electricity and 11.4% had no access. The issue of lack of access to electricity at 7.2, 14.4 and 11.4% in Bernard Lodge, Monymusk and Frome was in stark contrast to the parish and national figures of access to electricity well above the 90% mark. Only in Westmoreland was the level of access on the estates above the parish figure. With respect to access to water, the situation is analogous. Bernard Lodge emerged as the most dependent of the estates, with 66.1% of households accessing from the estate, 11.5% from the National Water Commission (NWC), and 1.6% having no access at all. The corresponding figures for Monymusk are 31.5, 11.2 and 15% respectively. Again, Frome households showed the least dependence on the Frome Estate with only 9.3% accessing from the estate, 56% from NWC, and 2.3% having no access. The implementation of the JCS commenced with the privatization of the Government of Jamaica’s holdings in the sugar industry commencing 2009. These five (5) estates—St. Thomas Sugar, Bernard Lodge, Monymusk, Frome, Long Pond and Hampden were divested between 2009 and 2010. Together, these six (6) estates employed over 7500 workers, who were all made redundant in December 2008, ahead of the privatization. There was immediate concern about the welfare of those workers who were then deemed vulnerable and not likely to obtain re-employment with the new entity, and hence would have difficulties surviving post redundancy. A survey was therefore conducted by the Ministry of Agriculture in 2008 to identify all workers so deemed vulnerable, that is, those who in 2008 on average were earning less than the annual minimum wages, that is, less than $400,000.00 per annum. It was felt that these vulnerable workers should be supported with a grant from the European Union

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Accompanying Measures resources to help them to cushion the blow of redundancy and transition them into alternative livelihoods. A survey of over 6000 sugar workers and small cane farmers was conducted in 2008 to determine their eligibility for grants under the Sugar Transformation Programme. At the end of the exercise, some 2561 persons previously employed to the estates were deemed vulnerable and eligible for grants, as they earned less than $400,000,00 in the 2006/2007 crop year. The survey indicated that 81.1% of this population was male and 19% female. Only 40% of the population was literate, significantly lower than the literacy figures for the various sugar parishes highlighted in Table 7.1. Of those literate, 77.5% attained primary/all age school education, with 30.4% attaining high school/secondary education. Only 9.2% had technical vocational training, and a mere 0.9% university education. This education profile reveals the predominance of low level skill sets within the population, and therefore training, especially in the technical and vocational areas, ought to have been a priority for the planned interventions by the Sugar Transformation Programme. At the time when the survey was conducted in 2008, 86% of the population surveyed already had written notice of redundancy. Only 29% of them at the time found employment, and of those employed, only 4% were permanently employed, with 96% only temporarily employed. The survey found that 69% of the population accessed health services from the clinics supported by the Estates. This figure is consistent with the low levels of health insurance average reported by the Survey of Living Conditions in 2008 (see Table 7.1). Significantly, only 13% of the population were receiving a pension, and the population was coping by support from family (24.7%), friends (5.1%), ‘hustling’ (31.3%), and savings (25%). Although 13% of the population was in receipt of a pension, only 3% indicated that this was the means by which they supported their family. This baseline survey of the population of employees to the factories before divestment and of some cane farmers, presents a profile of an estate worker which is typically male, illiterate or marginally literate, highly dependent on the estates for basic health services, facing the prospects of prolonged unemployment, and without much social safety net protection such as a pension. This data would have been critical to the Ministry of Agriculture in terms of designing appropriate interventions. In the next chapter a further characterization of these grant-recipients in the Monymusk SDA, as well as residents of the Monymusk Estate will be done to ascertain how they used the grants given to them and

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the impact the grants and other interventions of the JCS would have had on their welfare. A case study of the Monymusk SDA will also be presented, giving greater insights into the people’s view on privatization of the estate and how they were coping since redundancy and divestment. This particular SDA was selected for impact analysis because of the following reasons: 1. it is one of the divested estates, therefore respondents would be able to compare and contrast their social and environmental conditions before and after divestment. 2. Monymusk lies within the irrigated southern belt which allows for a greater insight into the impact of the environmental issues of saline intrusion and land degradation cited in the environmental baseline presented below. 3. Monymusk Sugar Factory is proximate to the Clarendon Distillery Ltd., which provides an opportunity to examine the full range of environmental impact from both sugar and rum operations, rather than just sugar, as would be the case in St. Thomas and Frome, which have no distilleries, as well as Long Pond, where the distillery has been out of operation for some time. 4. new developments since the close of the 2015/2016 crop, affecting the operations of Monymusk by the new owners Pan Caribbean Sugar Company, give a new and interesting perspective to the efficacy of the divestment exercise and how issues with divestment affect the lives and economy of a particular SDA, especially since divestment was the major strategy pursued by the Government to transform the industry into an economically viable private sector led sugar cane industry.

The State of the Environment The sugar industry in Jamaica has existed continuously since the midseventeenth century, and remains today the largest, most vertically integrated agricultural industry in the island. The scale of its operation, the predominance of archaic technology, its generation of huge volumes of waste, and utilization of large volumes of natural resources cause the industry to have significant impact on the environment. This impact is not exclusively negative, as large acreage of sugar cane acts as a carbon

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sink, and through its by-products of ethanol and cogeneration from the burning of bagasse, the industry can make a positive contribution to Jamaica’s energy security by displacing fossil fuels, with the concomitant reduction in greenhouse gas emissions. The major strategy for the adaptation of the sugar industry was the privatization of Government’s holdings in the industry in the 2008/2010 period. Privatization provided the opportunity and impetus for the Government to address long-standing environmental issues in the industry through: a. remediation of long-standing environmental breaches b. infusion of cleaner, more efficient technologies of production through private capital, and c. activation of new revenue streams in energy (co-generation and ethanol production), with positive externalities. The Regulatory Framework for the Sugar Industry The sugar industry in Jamaica predates by over 300 years the establishment of a legislative and institutional framework for the management of the environment in Jamaica. Although there were isolated pieces of environmental legislation which were enacted in the colonial days and in the first decade of independence, such as the Beach Control Act, 1956; the Wild life Protection Act, 1945; the Clean Air Act, 1964 and the Public Health Act, 1974, a comprehensive and cohesive environmental management framework was only established in 1991. An outline of the regulatory framework of the sugar industry is provided below. The Natural Resources Conservation Authority (NRCA) Act, 1991 The NRCA Act (1991) is the principal legislation for the management of the environment in Jamaica, including the sugar industry. Section 3 of the Act establishes the Authority, with a mandate to “take such steps as are necessary for the effective management of the physical environment of Jamaica so as to ensure the conservation, protection and proper use of its natural resources”. Section 9 of the Act requires a permit for the undertaking of prescribed enterprise, construction, and development. The processing of sugar cane falls squarely in the prescribed activities outlined in the Natural Resources (Prescribed Areas) (Prohibition of Categories of Enterprise, Construction and Development) Order, 1996. Entities engaging

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in activities resulting in the discharge of effluent into the environment or pollutants into the air require licences for construction and operation of such facilities, and for the discharge of such effluent/pollutant, based on Sect. 12 of the Act. Pursuant to Sect. 12 of the Act, the NRCA in 2005 promulgated the Natural Resources Conservation Authority (Wastewater and Sludge) Regulations, with respect to the discharge of waste water, and in 2006 the Natural Resources Conservation Authority (Air Quality) Regulations , in relation to discharge of air pollutants. The NRCA also promulgates regulations in relation to the storage of petroleum products, which affects the sugar industry. Considering that the sugar industry long predates the NRCA Act, this legislation contains a “grandfather” clause, which gives pre-existing entities up to seven years to fully comply with all its provisions. The National Environment and Planning Agency (NEPA) was established in 2001, as an executive agency, charged with the responsibility of serving as the Secretariat of the Natural Resources Conservation Authority and implementing the decisions of the Authority. The Water Resources Act of 1995 The Water Resources Act (1995) established the Water Resources Authority (WRA), which came into being on April 1, 1996, with a mandate to “regulate, allocate, conserve, and otherwise manage the water resources of Jamaica”. Under section 19 of the Act it is prohibited for any person or entity to abstract water from underground or surface sources without a licence. A licence is also required for the carrying out of or alteration of any works relating to the abstraction of water. The Water Resources Act repealed and subsumed the provisions of the Underground Water Authority Act, which focused exclusively on underground water. The sugar industry, particularly in the Monymusk and Bernard Lodge areas, is the major user of irrigation water in Jamaica, operating a number of wells. United Nations Framework Convention on Climate Change UNFCC, 1992 Jamaica is a signatory to the UNFCC, having acceded on January 6, 1995, as well as the Kyoto Protocol of the UNFCC, acceding in June 1999. Being a developing country, Jamaica had no commitment for the reduction of production of greenhouses gases under the Kyoto Protocol. However, Jamaica signed the successor Paris Agreement in April 2016,

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and upon ratification, will assume commitments in relation to cuts in greenhouse gas emissions. In this regard, the sugar industry plays a pivotal role. Expansion of acreage under sugar cane production, as envisaged under the JCS will have a positive impact in terms of carbon sequestration. Similarly, the production of some 70 million litres of ethanol to satisfy the country’s E10 mandate, as well as the production of energy through co-generation will also reduce the country’s carbon footprint. However, continued burning of cane for harvesting, producing dioxins and furans will militate against Jamaica’s commitments. Stockholm Convention on Persistent Organic Pollutants, 2001 This Convention seeks to control and manage the production of persistent organic pollutants (POPs). Jamaica signed this Convention in 2001 and ratified same in 2007. Under this Convention, Jamaica has legally binding commitments to reduce the production of POPs, outlined in its first National Implementation Plan, submitted to the Convention in 2005. Despite engagement between the regulatory authorities and the sugar industry, the practice of burning cane has not been curtailed. Jamaica has, therefore, not been able to honour its international commitments under this Convention, despite promulgation of local legislation (NRCA’s Air Quality Regulations), to deal with this matter. Cartagena Convention for the Protection and Development of the Marine Environment of the Wider Caribbean Region, 1983 This Convention has three protocols, of which the Protocol Concerning Pollution from Land-based Sources and Activities, 1999, is relevant to the sugar industry. Jamaica only ratified this Protocol on November 5, 2015, even though the Wastewater and Sludge Regulations have been promulgated since 2005. The sugar industry is a major generator of effluent from cane washing and rum production activities, as well as improper use of fertilizers and pesticides, which wash into marine waters through surface run-off. The General State of the Environment in Jamaica Before the Implementation of JCS, 2006–2015 Although the JCS, 2006–2015, theoretically has a commencement date of 2006, the major activities of the Government to implement the JCS took place in the 2009–2010 period, with the divestment of the six

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government owned sugar estates. This period coincides essentially with the publication of Jamaica’s first State of the Environment Report, 2010, by NEPA (2011). In that year, according to the Report, Jamaica slipped to 89th out of 163 countries in the Environment Performance Index (EPI), from 54th out of 149 countries in 2008. Overall the Report highlighted a number of key environmental indicators, which should be of concern: • • • • • • • • •

206 species characterized as threatened or endangered 4 of 11 watersheds degraded 30% of beaches monitored affected by chronic beach erosion 70% of marine sites monitored met faecal coliform standard 79% of marine sites monitored met biochemical oxygen demand (BOD) standard 59% of marine sites monitored met nutrient standard 79% of fresh water sites monitored met BOD standard 72% of fresh water sites monitored met nutrient standard 75% of monitoring sites met air quality standards in Kingston.

The sugar industry, being the largest agricultural industry in Jamaica doubtless contributed significantly to the state of the environment in 2010. The discharge of effluent from sugar and rum production was identified as one of the sources contributing to the poor quality of marine and fresh water, and consequently to the health of Jamaica’s coral reefs, mangroves, and seagrass beds. The other sources identified are untreated sewage, increased run-off from agricultural activities, dredging, and coastal development. NEPA monitors over 200 coastal water quality stations island wide, where water quality is measured for a mix of physical, chemical, and biological indicators, including phosphorus, nitrates, BOD, faecal coliform, and total dissolved solids. Excess phosphorus and nitrates result in eutrophication and excess plant growth. BOD is a measure of the amount of gaseous oxygen present in solution. Faecal coliform is a bacterium, which indicates the presence of faecal matter in water, as well as other pathogens. Total dissolved solids is an indication of the level of sedimentation in marine water, coming from land based activities. NEPA’s monitoring activities indicate that in 2010 only 31 of 52 sites monitored were meeting the standards for nitrates, 28 of 49 for phosphates, 43 of 54 for BOD, and 35 of 50 for faecal coliform. Although

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the sources of contamination are multiple, activities in the sugar industry are particularly cited for high levels of phosphate in the Dutch Canal in Westmoreland, which receives cane wash effluent from the Frome sugar factory, as well as agricultural run-off from cane growing activities. Also cited was nutrient pollution in the Black River watershed, resulting from sugar and rum processing at the Appleton Estate. The Report also indicates threatened or polluted water in relation to faecal coliform and heightened BOD levels around the Southern Clarendon coastline, which could be attributed to activities in the Monymusk Sugar Estate. While the Report stated that the country is well endowed with water resources, with available water resources from ground and surface sources amounting to 3929.7 mcm, this water is not evenly distributed across the island, and under 10% of it was contaminated. Some 75% of local water demand is for agricultural purposes, with the sugar industry accounting for some 80% of this, according to a WRA estimate. It is also the case that there is significant sugar cane production in the southern plains of the island—St. Catherine and Clarendon, which are among the most water deficient areas of the country. A significant percentage of irrigation water produced in Jamaica is consumed in this area, where in 2010, the predominant method of irrigation was flood irrigation, followed by overhead sprinklers and drip. The irrigation efficiency associated with flood irrigation is less than 40%. The Report also pointed to salt water intrusion as a significant source of contamination of ground water due to over pumping, which has been exacerbated in recent times by sea level rise occasioned by climate change. In terms of fresh water sites monitored by NEPA in 2010, only 38 of the 52 sites monitored were meeting the standard for nitrate, for phosphate it was 36 of 50 sites and for BOD 43 of 52 sites. Again, rivers and streams in the vicinity of the Monymusk Estate (Rio Minho), were showing signs of deterioration. The NEPA Report indicates that the main contributors to poor air quality are emissions from industry, motor vehicles, open burning of sugar cane fields, and burning at solid waste dumpsites. In terms of industrial sources of pollution according to NEPA, the sugar and allied industries only contribute 2, 1, and 9% respectively to SO2, NOx, and particulate matter emissions nationally, compared to the alumina and electric power generation industries which contribute 93, 81, and 76% of these emissions. While the emissions from the sugar industry may not be significant in relative terms nationally, they could be significant for the locale around the estates. As at 2010, none of the divested estates were in possession of

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a NRCA Air Pollutant Licence and effectively there were no monitoring sites for air quality within the vicinity of sugar estates. NEPA’s air quality data for 2010 therefore did not include measurements from the sugar industry. In fact, NEPA only monitors for total suspended particulates SO2, and NO2 in Kingston. Other monitoring island wide is carried out by the bauxite/alumina industry. The State of the Environment Report 2010 raises serious concerns regarding land use in Jamaica. The 2007 Census of Agriculture, conducted by the Statistical Institute of Jamaica (2008), indicated that of the total land in farming of 325,810 hectares, only 202,727 hectares were in active farming. These figures represent a 22.7% and 25.8% reduction respectively of total land in farming and active farm lands, compared with the 1996 Census. The NEPA Report attributes much of the reduction in farm lands and lands in active farming to persistent conversion of agricultural lands to other uses, particularly for urban housing. According to the Report, while there is limited information on the rate and quantum of agricultural lands converted to other uses, the Ministry of Agriculture estimates that of the 186,155 hectares of flat arable lands in Jamaica, some 25% have been lost to other forms of development. The sugar cane growing belt of St. Catherine and Clarendon are most impacted by conversion of agricultural lands to other uses. The Report cited that Clarendon since the 1950s would have lost some 3174 hectares or 10% of its total arable lands as at 2008, for urban purposes. Indeed, data from the Sugar Industry Authority show that area under sugar cane production nationally has been steadily declining from 65,803 hectares in 1965 to 26,296 hectares in 2006. These trends in land use will have some implications for the projection in the JCS to move cane production to 3.5 million tonnes in 2015, from the 1.74 million tonnes in 2006. The State of the Environment Report 2010 not only highlights the contribution of the agricultural sector generally, and the sugar industry specifically to environmental degradation, but also identified this sector as a potential positive contributor to enhancing the state of the environment. The Report highlights Jamaica’s heavy dependence on fossil fuel for its energy needs, as well as the contribution of fossil fuel to climate change and the country’s balance of payment. According to the Report, Jamaica’s petroleum import bill was US$1.6 billion in 2010, that is, some 29% of its GDP. From both the fiscal/economic and environmental standpoints, diversification of the country’s energy base is an imperative.

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While the Report notes the increased proportion of renewables in the country’s energy mix, moving from 5% in 2008 to 9% in 2010, it points to the need to increase the contribution of renewables to 20%, consistent with the objective of the country’s energy policy. Indeed, Jamaica’s Energy Policy 2009–2030, has as its third goal: “Jamaica realizes its energy resource potential through the development of renewable energy sources and enhances its international competitiveness and energy security whilst reducing its carbon foot print” (2009, p. 22). The policy further identifies the agricultural sector to contribute significantly to the increased production of renewable energy through the production of biofuels such as ethanol. It is well known that the sugar cane is perhaps one of the best convertors of biomass to fuel. The State of the Environment Report 2010, therefore, identified the sugar industry as having “a critical role to play in the indigenous production of ethanol to meet national E10 requirements and through bagasse as a source of biomass for electrical power generation” (National Environmental Planning Agency, 2011, p. 133). The burning of bagasse to produce energy is a wellestablished practice in the sugar industry, which only uses bunker “C” oil for start-up operations. According to the Report, bagasse burning in 2009 accounted for 24% of renewable energy production in Jamaica. Environmental State of the Sugar Industry 2008/2010 As indicated in previous chapters, environmental issues in the sugar industry only became a matter of deliberate focus in the latest round of divestment of Government’s interest in the sugar industry, under the JCS. In preparation for the privatization of the GOJ’s six estates—St. Thomas Sugar, Long Pond, Hampden, Frome, Monymusk and Bernard Lodge estates, the Government, in 2008, undertook an environmental audit of all six estates in order to assess the state of environmental management on these estates, identify environmental breaches, set targets, and establish an action plan to bring these facilities into environmental compliance. In late 2009, the Delegation of the European Commission in Jamaica also commissioned a strategic environmental assessment (SEA) of the JCS’s implementation under the EU funded Sugar Transformation Programme. Although the SEA does not look at environmental impact at the project level, it did in fact establish a general baseline in terms of the state of the environment in the industry before the commencement of the JCS’s

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implementation and made predictions as to how the implementation of the JCS would impact the environment positively and negatively. The SEA identifies pressures on ground water and land degradation as current environmental impacts of the sugar industry, as well as continued likely impact of the implementation of JCS. The JCS calls for a significant increase in the production of sugar cane (from 1.74M tonnes in 2006 to 3.5M tonnes in 2015), in order to satisfy the mix of products from the industry—sugar, molasses, rum, ethanol, and bagasse for cogeneration. The sugar cane is the base of all these products, and the almost doubling of production envisioned would require a significant quantum of water, as the sugar cane is a very water intensive crop, requiring some 1500 millimetres of well distributed water per annum for optimal growth and productivity. Although Jamaica has sufficient water resources from ground and surface sources to satisfy both agricultural and non-agricultural demand, this water is not distributed spatially or temporally consistent with the various demand centres. The plains of South St. Catherine and Clarendon, which constitute the Monymusk SDA, have the greatest potential for cane expansion based on land availability. For example, based on data obtained from the SCJ Holding Ltd., Monymusk Estate comprises some 18,589.09 hectares of land, of which only 2800 hectares were in production in 2010 (before divestment), and another 898.8 hectares occupied by housing or slated for development. The issue with developing the lands for expanded cane production lies in the fact that the Southern Clarendon/St. Catherine belt is among the most water-deficient areas in Jamaica. Data from the Meteorological Office in Jamaica indicate that although the mean annual rainfall in Jamaica between 1881 and 1995 was 1895 millimetres, parts of the southern coastal plains received less than 1270 millimetres annually. Sugar cane production in the southern plains of Clarendon and St. Catherine has only been possible with irrigation. Based on data from the Water Resources Authority, since the 1940s, the Monymusk Estate would have drilled some 137 wells to service their sugar cane farms. The National Irrigation Commission (NIC), a Government company offering irrigation services, operates the Rio Cobre Irrigation Scheme, which principally serves sugar cane production in South St. Catherine, and the Mid Clarendon Scheme which serves independent cane farmers in Southern Clarendon. The Rio Cobre Scheme is a surface source system, while the Mid Clarendon is served from a series of wells in the south-western side of the Clarendon plains.

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Data from the NIC indicate that in the 2008/2009 financial year these two schemes pumped for over 60,000 hours, producing 72.6M cubic metres of water. Volume of water produced by the NIC in 2009/2010 was considerably greater at 125M cubic metres. This is a significant quantum of water for an area with a water deficit. Against this background, the low irrigation efficiency associated with this scale of irrigation operation is troubling. Irrigation efficiency is estimated at less than 40%, that is, over 60% of water produced, using expensive electricity, is lost to physical leakage from predominantly earthen canals or broken concrete canals. The predominant method of irrigation used, that is flooding, does not also augur well for efficiency. According to the Delegation of the European Union in Jamaica (2009, p. 52), only 1% of lands under production at the Monymusk Estate used drip irrigation in 2009, with 9% using sprinklers, and 90% using flood irrigation. Given the pressures on ground water resources, it seems prudent that future demand for irrigation water for sugar cane expansion must be met primarily from improved transmission and on-farm irrigation efficiency. This is especially poignant as “the WRA has indicated that no further licences will be issued to the agricultural sector in St. Catherine and Clarendon plains, as sustainable extraction levels are already committed” (European Union Delegation in Jamaica, 2009, p. 45). Efforts to improve NIC’s transmission efficiency through the lining of earthen canals have been stymied by inadequate budgetary provision by the Government. Data obtained from the Ministry of Agriculture and Fisheries show that between 2006/2007 financial year to the 2009/2010 financial year only $153 million were allocated to the NIC for lining of canals and other capital works. At the same time, cost recovery for irrigation water provided to farmers remain extremely low, being 26.6% in 2009, at a time when the NIC was using over 8 million kilowatts of electricity. Subsidized irrigation services do not provide an incentive for cane farmers to improve on-farm irrigation efficiency. Increased lining of canals and expansion of drip irrigation used on farm are critical objectives of the JCS, and in evaluating the environmental impact of the JCS, the extent to which this objective was realized will be explored. The pressure on ground water resources in the Monymusk SDA is further exacerbated by the phenomenon of saline intrusion occasioned by over pumping. According to the WRA, the Southern Clarendon and St. Catherine plains have the highest concentration of wells in Jamaica. These wells are situated in the limestone and alluvium aquifers on the

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plains. Massive expansion of sugar cane production in the 1960s was accompanied by significant over pumping, resulting in saline intrusion. According to Jamaica’s Initial National Communication to the United Nations Framework Convention on Climate Change (UNFCC), “degradation of water quality has resulted in the loss of some 104.3 cubic metres per year, or 10% of exploitable ground water as a result of pollution or saline intrusion.” This Report further stated that “saline intrusion in the Clarendon and St. Catherine areas accounts for 75% of the affected ground water” (Government of Jamaica, 2001, p. 76). Data from the WRA indicate that of the 137 wells developed by the Monymusk Sugar Estate since the 1940s, some 65 have been abandoned, presumably due to saline intrusion. The cane growing areas in South Clarendon, comprising the Monymusk SDA coincide with the extensive area of salinity in South Clarendon. Indeed, approximately 5000 hectares of land in the Monymusk Sugar Estate have been taken out of production. The area of cane harvested in Monymusk declined from 7500 hectares in the 1965–1975 period to 2300 hectares in the 2005–2007 period (European Union Delegation in Jamaica, 2009, p. 55). Saline intrusion has a direct impact on sugar cane productivity. Data from the SIA show that since the 1960s sugar cane yields declined from between 73–75 tonnes cane/hectare to between 50–55 tonnes cane/hectare in the 2005–2007 period. For the Monymusk area, saline intrusion must have played a key role in this decline in productivity. Under the JCS, while cane production is programmed to be expanded, productivity increase must play a more critical role in this expansion than increase in area planted. The priority must, therefore be increased yields from current lands in production through better cultivation practices and agronomic management, with rehabilitation of some of the abandoned saline lands a secondary consideration for expansion. The continued impact of climate change is an important consideration in assessing the JCS’s impact on underground water resources. Change in weather patterns resulting in prolonged droughts will decrease surface water flows and warrant increased irrigation of sugar cane from underground sources, leading to over pumping and saline intrusion, and impacting yields negatively. More frequent and intense rainfall over shorter periods will result in increased run-offs to the seas and low percolation, causing minimal recharge of underground aquifers. According to Jamaica’s Initial National Communication to the UNFCC (2001, p. 64),

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some models are estimating sea level rise of some 18 cm by 2025 and 30– 34 cm by 2050. Rising sea levels in turn contribute to saline intrusion, which will likely impact sugar cane production in the Monymusk SDA. State of Environmental Compliance in the Sugar Industry Before the Implementation of JCS Although the NRCA Act was promulgated in 1991, the regulations with respect to its licensing and permit systems were only promulgated in 1996. All sugar factories in Jamaica would have predated the promulgation of the NCRA Act of 1991 and the NRCA (Licences and Permits) Regulations 1996. Section 17 of the NRCA Act, however, gives the NRCA/NEPA the power to require from any operator of a facility that discharges effluent into the environment to submit information to the NRCA relative to the performance of the facility, the quantity and condition of effluent discharged, and the area affected by said discharge. As pre-existing facilities, the sugar factories would have had up to seven years to present NEPA/NRCA environmental action plans in preparation for compliance with the NRCA Act with respect to the various licences and permits required for their operation. The extent of engagement between NEPA and the sugar industry in this regard is not clear. However, at the eve of the divestment exercise in 2008, none of the six government-owned sugar estates had submitted an action plan. In preparation for the divestment of the six government-owned estates, in 2008 the SIA commissioned an environmental audit of these estates, with the objective of: 1. identifying all environmental liabilities 2. determining necessary corrective actions required for full compliance with the NRCA Act 3. facilitating ongoing improvement in environmental management 4. providing baseline data. The audit concluded that all five facilities were discharging into water channels trade effluent from cane washing operations and other factory waste which did not meet the NRCA standards for trade effluent. Results of samples tested of waste water show parameters such as BOD, COD,

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nitrates, phosphorus, faecal coliform, and total suspended solids significantly above NRCA standards. None of the facilities had a waste water treatment system. Additionally, all the factories were discharging from their stacks gaseous and particulate emissions that were not meeting the NRCA’s air quality standards. The audit also highlighted other infractions such as improper solid waste disposal, improper storage of chemical, and the estates abstracting water from surface and underground sources without the relevant licences and permits from the Water Resources Authority, consistent with the Water Resources Act (1995). Following the Audit, the SCJ Holding Ltd., which was then operating these government-owned estates, began a formal engagement with NEPA in relation to the formulation of environmental action plans. NEPA conducted its own compliance audits, and summarized in Table 7.3 are the main issues with respect to the Monymusk Estate. Since the Monymusk Factory and the Clarendon Distillery Ltd. (CDL) are adjoining entities with a common fence, the environmental baseline and impact on the communities in the Monymusk SDA would be incomplete without reference to the state of affairs at the CDL. The CDL is a privately-owned distillery in which the Government of Jamaica is part-owner in conjunction with Demerara Distilleries Ltd. of Guyana and Goddard Enterprises, parent company of the West Indies Rum Distillery in Barbados. In the 2010 audit of this facility conducted by NEPA, the CDL was cited for discharging unmonitored and uncontrolled air pollutants into the atmosphere. It was recommended that the facility conducts an inventory of emissions and submit same to NEPA to determine whether the volume and quality of its air emissions warrant a licence. Following the compliance audit conducted by NEPA and informed by the environmental audit commissioned by the SIA, SCJ Holding Limited formulated environmental action plans for all five government-owned estates. According to a NEPA Report dated February 10, 2014, these action plans were submitted as follows: • • • • •

St. Thomas Estate—submitted December 7, 2010 Hampden Estate—submitted December 7, 2010 Long Pond Estate—submitted December 7, 2010 Monymusk Sugar Factory—submitted May 5, 2011 Frome Sugar Estate—submitted May 5, 2011.

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Table 7.3 Environmental Breaches at the Monymusk Factory and Required Corrective Actions, 2010 Description of Breach Insufficient bunding for fuel storage tanks—breaches detected in bund wall Facility storing fuel without permit for storage and stock piling of petroleum products

Release of untreated trade effluent from production and wash down activities

Discharge of trade effluent without a license from NRCA Facility operating an informal dump without licence from National Solid Waste Management Authority (NSWMA) Discharge of air pollutant without a licence from its one fuel oil boiler and 7 bagasse boilers No permit for operating the factory (to be applicable when the factory is divested)

Regulation Breached

Action Required Bund wall to be repaired

The NRCA (Permits and Licenses) Regulations, 1996. Persuant to Section 9, NRCA Act 1991 NRCA Act, Section 12

Section 12, NRCA Act, 1991 Section 23, NSWMA Act, 2001

Facility to apply for permits for storage and stock piling of petroleum products Facility to install oil separators in drains and construct an appropriate treatment system that will meet the NRCA effluent standards Facility to apply for discharge licence from NEPA Facility to consult with NSWMA with a view to applying for appropriate licence

Section 12, NRCA Act, 1991

Facility to apply for air pollutant discharge licence from the NRCA

Section 9, NRCA Act, 1991

Being an existing facility at the time of the enactment of the NRCA Act, this provision will be applicable only when ownership is transferred from the Government to divestee

Source Compiled from NEPA’s Monitoring and Compliance Report

Essentially these action plans stipulated a number of physical remedial works to be carried out by SCJ Holdings, as well as dates determined for the application for the necessary permits and licences for discharge of trade effluent and pollutant air emissions to be undertaken by the new owners. The physical works to be carried out by SCJ Holdings include installation and cleaning of grease traps where necessary, repair

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and construction of bunds where necessary, cleaning of drains, cleaning and refurbishing of settling ponds and secure storage of oil drains and waste oils. The new owners in turn were to have applied for their trade effluent discharge and air pollutant discharge licences by June 30, 2011. The division of labour noted above, and which is reflected in the action plans, basically mirrors the assignment of responsibilities for environmental remediation in the Agreement for Sale and Purchase between the Government of Jamaica and COMPLANT International Sugar Industry Limited, the Chinese entity to which Bernard Lodge, Frome and Monymusk Estates were divested. Under Clause 9.27 of the Agreement for Sale and Purchase, covering environmental issues, the Government undertook to: 1. take responsibility for remedying all environmental breaches committed by the estates before the completion of the divestment transaction 2. indemnify the purchaser against any claims or damages for breaches of environmental laws committed before divestment 3. carry out at its expense all remedial actions identified by NEPA in the Environmental Action Plan 4. assist the purchaser with application for any environmental license and permit. This chapter will assess the environmental impact of the implementation of the JCS on the Monymusk SDA, the extent to which the respective commitments of the Government of Jamaica and the new owners of the Monymusk Sugar Estate are fulfilled as per the Agreement for Sale and Purchaser and the Environmental Action Plan agreed upon with NEPA. Although not identified as a specific issue for action in the Environmental Action Plan for the Monymusk Estate, burnt cane harvesting in the 2009–2010 period constituted a major source of air pollution in the Monymusk SDA, as well as the entire sugar industry. Burnt cane harvesting of sugar cane is widely practised in the industry principally because it requires less manpower compared to green cane harvesting, and hence more economical. Canes harvested using this method are also easier and cheaper to transport, as there is less trash. On the other hand, this method of harvesting has major negative environmental impacts. The intense heat associated with burning kills valuable micro-organisms and

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earthworms, reduces the capacity of the soil to hold nutrients in the root area and render the harvested cane more susceptible to rapid deterioration of juice quality. Burnt cane is also more difficult to process and with deteriorating quality of canes processed, more dextran is present in the sugar. Above all else burning of sugar cane releases persistent organic pollutants into the atmosphere, such as furans and dioxins, with serious implications for human health and the environment. In Jamaica’s commitments under the Stockholm Convention, elimination of burnt cane harvesting is a major action. Based on engagements between the regulatory authorities and the Sugar Industry, this practice should have ceased from 2010. This timetable seems not to have been realistic, as a significant percentage of small independent farms do not possess the equipment necessary for mechanical harvesting, nor are their fields so configured to apply mechanical harvesting. Indeed, in only 13% of all canes in Jamaica were harvested green, with the figure for Monymusk ‘negligible’ (European Union Delegation in Jamaica, 2009, p. 66). Green cane harvesting, however, has huge environmental benefits. The huge volume of trash it generates can be used for mulching, a practice that retains soil moisture and suppresses the growth of weed. Green cane processed at the factory is much cleaner, demanding less water for washing, and produce reduced volume of wastewater, and better-quality effluent. Water Quality in the Monymusk SDA Contamination of surface water has been identified by both the Strategic Environmental Assessment of the JCS (2010), and the Environmental Audit of the Six (6) Government Estates (2008), as a major negative impact of the sugar industry on the environment, and consequently on sugar dependent areas (SDAs). This impact arises from run-off of chemicals and fertilizers used in the production of cane, as well as the release of improperly treated waste water from the washing of sugar cane in the Monymusk factory, as well as dunder generated from the production of rum in the adjoining Clarendon Distillers Limited. NEPA routinely conducts water quality tests under its National Water Quality Monitoring Programme in all 28 watershed management units (WMU) into which Jamaica is divided. The Monymusk SDA lies in the Rio Minho Watershed Management Unit and has an area of 865.7

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Km2 (NEPA, 2014). NEPA’s report (2014) further indicated that this watershed was severely degraded (see Fig. 7.1). According to NEPA (2014), under its National Water Quality Monitoring Programme, NEPA routinely monitors some 12 sites comprising both freshwater and marine water bodies in this watershed. The parameters monitored include nitrate, phosphate, biochemical oxygen demand (BOD), total dissolved solids (TDS), total suspended solids (TSS) and pH levels. From water samples collected, tests are conducted for these six parameters and the results compared with the 2009 Ambient Water Standards of the NRCA, as well as the 1995 Trade Effluent Standards. The specific sites at which NEPA collected water samples in the 2008–2010 baseline period are indicated in Fig. 7.2. The parameters monitored by NEPA in its National Water Quality Monitoring Programme are highly relevant for assessing the impact of the sugar industry on water quality: Phosphate – is found in abundant quantities in the natural environment. However, in the cultivation of sugar cane, phosphorous is also provided to the plant through inorganic fertilizers, which can be leached into ground water or enter into surface water bodies through run-offs. When in excess amount in water, phosphorous can cause eutrophication, contributing to the rapid and prolific growth of algae. This excess growth, in turn, leads to de-oxygenation, thereby robbing organisms in the water bodies of oxygen, resulting in mortality. In addition, excess growth of algae impacts the aesthetics of water bodies. Nitrate – Nitrogen occurs naturally in the environment, as the atmosphere is composed of 78% nitrogen. Nitrate is introduced into soils through urea or sulphate of ammonia fertilizers. As is the case with phosphorous, excess nitrate in the water bodies through run-off, similarly causes eutrophication. Biochemical Oxygen Demand – is a measure of the quantum of oxygen required to decompose organic matter in water bodies. The higher the amount of organic matter introduced in freshwater bodies, the more oxygen demanded to breakdown (oxidize) this organic matter, and the less oxygen available to living organisms in the water for breathing. Nitrates and phosphates in improperly treated water from the industry can increase BOD levels in water.

Fig. 7.1 Jamaica—Watershed Management Units Ranked by Level of Degradation (Source NEPA)

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Fig. 7.2 Water quality sampling sites used by NEPA 2008/2010 and 2016/2017 Clarendon, Jamaica

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Total Suspended Solids – suspended solids represent solid particles washed into surface water. These particles remain suspended while water is turbulent but settles in water during calmer times. Suspended solids in water increases the turbidity of water and renders such water murky, discoloured and expensive to treat for drinking purpose. The settlement of these solids causes sedimentation and these particulate matters in water can affect aquatic life, such as clogging of fish gills. The washing of the sugar cane before processing into sugar, causes dirt from harvested sugar cane to be released through waste water into river channels, increasing the levels of total suspended solids. Total Dissolved Solids – organic and inorganic matter released into water bodies may be dissolved into the water, increasing the concentration of these elements in the water. The increased concentration of these matters in water channels can be injurious to aquatic life, which have defined levels of tolerance to these dissolved solids. pH – refers to the level of acidity or alkalinity of a solution and ranges from 0 to 14. Aquatic organisms have ideal pH levels at which they are able to function optimally. Release of effluent from the industry into water bodies can change the pH of such bodies and affect the survival of living organisms in the water.

NEPA indicated that in the baseline period 2008–1010, all methods used were taken from the Standard Methods for the Examination of Water and Waste Water—22nd Edition. The water quality tests conducted during the 2008–2010 period were done sporadically in July and October 2008, June and October 2009 and March and June 2010. The results of these tests reveal no major issue with water quality, as all the parameters were well below the trade effluent standard, except for total dissolved solids, which exceeded the standard on all occasion. In the next chapter, these baseline results will be compared to the results of water quality tests conducted in the 2016/2017 on similar parameters, to measure the impact of the implementation of JCS on water quality in the Monymusk SDA.

Conclusion While it is commendable that the Adaptation Strategy (JCS) of the Government has a specific objective of improving the economic, social, and environmental sustainability of sugar dependent communities, it is

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unfortunate that it took the EU reform of its sugar regime to elicit this focus on the social issues plaguing SDAs for decades. The baseline analysis of conditions in the sugar parishes of Jamaica, and in the Monymusk SDA specifically in 2008/2010 period, reveals a picture of chronic poverty and severe social dependence on the Monymusk Estate. This social neglect and dependency are entirely consistent with the features of the Plantation Economy Theory, as well as with the observation of Richardson (2009) across the ACP, in respect of the sugar estate supporting socially entire communities. In a sense, it is not surprising that the Government prioritized social intervention in respect to the allocation and use of the accompanying measures resources. Indeed, apart from the pressing imperative of addressing the social neglect, it was crucial that the Government relieve the estates of the onerous social burden they were carrying, if it hoped for a successful divestment. Whether a one off initiative, such as the Sugar Transformation Programme, could address in its entirety such deepseated, pervasive, multifaceted and structurally entrenched social issues, and within such a relatively short time span (2006–2015), is of course a totally different question. The baseline survey of the sugar industry generally, and within the Monymusk SDA specifically, showed an industry extracting considerable natural resources, inflicting serious arm to the environment, whilst largely ignoring overtures from the fledgling environmental regulatory authority to remedy past breaches and come into compliance. While this did not augur well for a completely privatized industry, divestment could have provided the opportunity to cultivate and nurture a new ethos of good environmental stewardship in the industry. Of course much will depend on the will and stridency of the environmental regulator to create a culture of enforcement and compliance. Government policies and action will also be critical in facilitating the development of the industry’s potential to produce renewable energy, which would have a positive impact on the environment.

References European Union Delegation in Jamaica. (2009). Strategic environmental assessment (SEA) of the implementation of the multi-annual adaptation strategy 2006–2015 of Jamaica. Kingston.

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Government of Jamaica. (2001). Initial communication to the United Nations framework convention on climate change (UNFCCC). Kingston. Government of Jamaica. (2009). Jamaica’s national energy policy, 2009–2030. Kingston: Ministry of Energy and Mining. National Environmental Planning Agency. (2011). State of the environment report 2010. Kingston. National Environmental Planning Agency. (2014). Sugar company environmental compliance audit update. Kingston. National Resources Conservation Authority Act. The NRCA Act (1991). Jamaica: Ministry of Justice. Planning Institute of Jamaica. (2012). Jamaica Survey of Living Conditions. Kingston: Planning Institute of Jamaica and the Statistical Institute of Jamaica. Richardson, B. (2009). Sugar: Refined power in a global regime. Palgrave MacMillan. Richardson, B. (2015). Sugar. Polity Press. Statistical Institute of Jamaica. (2008). 2007 Census of Agriculture. Kingston. Thompson, E. T. (1957). The plantation: A bibliography. Pan American Union. Water Resources Act. Water Resources Act. (1995). Jamaica: Ministry of Justice.

CHAPTER 8

The Impact

Introduction The Planning Institute of Jamaica, having responded with some alacrity to the Prime Minister’s urgent call to formulate the Jamaica Country Strategy for the Adaptation of the Sugar Industry, turned over the said Strategy to the Ministry of Agriculture for implementation in 2006. There was naturally some break in the momentum, as the Ministry of Agriculture was in no shape or form structured to implement the 86 million euros programme, the single largest programme the Ministry has ever implemented in its history. Furthermore, under the last few years of P.J. Patterson’s tenure as Prime Minister, which ended with his resignation on March 30, 2006, for some inexplicable reason, the sugar portfolio, with the exception of the industry’s regulator—the Sugar Industry Authority, was placed under the Ministry of Finance and Planning. At that time the Government through the Sugar Company of Jamaica (SCJ), owned and operated the St. Thomas, Bernard Lodge, Monymusk, Frome, Long Pond and Hampdem Sugar Factories, representing 70% of the sugar industry. The SCJ was returned to the Ministry of Agriculture in April 2006, at the same time basically that the Ministry was mandated to implement

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_8

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the JCS. This mandate of course included the divestment of the assets of the SCJ, which started in earnest in 2005, when the Government established within the Development Bank of Jamaica the Sugar Enterprize Team to manage the divestment process. The Ministry therefore had to quickly set about the establishment of an implementation mechanism for the JCS by setting up the Sugar Transformation Unit (STU), in July 2007. Between April 2006 and July 2007, the Ministry was focused on putting in some semblance of new management in SCJ and navigating all the financial hurdles to get a cash-strapped, loss making SCJ sufficient funds to commence preparations for and completion of the harvesting of the 2006/2007 crop. At the same time, by 2006 the process of preparing these factories for divestment was in full swing. This process included the identification of every single parcel of land owned by SCJ, ensuring that those parcels which had registered titles were not encumbered, that surveys were conducted for those parcels without registered titles to establish boundaries and commence the titling process, doing an inventory of all non-land assets, and conducting valuation of all assets. This was an extraordinarily arduous process, headed by the Sugar Enterprize Team. The Enterprize team invited investors to submit bids for pre-qualification in May 2006, to which 8 entities responded in June 2007, after 2 extensions to the time for submission of pre-qualification bids. In parallel with overseeing the operation of SCJ factories and the preparation for divestment, the Ministry in partnership with the Planning Institute of Jamaica and the Ministry of Finance and Planning were engaged with the Delegation of the European Union in negotiating and finalizing the Financing Agreement relative to Jamaica’s allocation of 5 million euros of the initial tranche of 40 million euros, allocated by the EU in 2006 to ACP countries under the accompanying measures. It will be recalled that the JCS has three distinct objectives: • to create an economically sustainable, diversified private sector led sugar industry, through divestment of government’s holdings in the industry • to improve the economic diversification, social resilience and environmental sustainability of sugar dependent areas • to maintain progress towards macroeconomic stability.

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Notwithstanding these clear objectives, the divestment and the social transformation objectives were not at the inception of the STU, pursued with equal vigour and intensity. By the time of the establishment of the STU in July 2007, and with pre-qualification bids for the divestment of the sugar assets received by the Sugar Enterprize Team in June 2007, the immediate focus of the STU was to superintend the redundancy programme, which was a pre-condition for privatization and to lend support to the divestment process, being spearheaded by the Enterprize team. The new Bruce Golding led Jamaica Labour Party Government which came to power in September 2007 was not prepared to continue to carry the accumulated losses of SCJ much longer, and the Government’s insistence at relieving the national budget of the financial burden of SCJ lent considerable impetus to the divestment process. At the time the accumulated losses of SCJ stood at a staggering $35.5 billion dollars, according to Ministry Paper 20/12 (2012), and like Air Jamaica, the national airline, the Government accorded the highest priority to accelerating the completion of the divestment of Government’s sugar holdings, commenced by the previous government. No doubt the government’s anxiety to accelerate the divestment of its sugar holdings would have been greatly influenced by the neoliberal dictates of IMF, with which the new JLP government was negotiating a Standby Agreement, which was eventually approved by the IMF Board on February 4, 2010. Consistent, with this clear policy intent by the new Government, the Cabinet in October 2007 approved the 8 pre-qualified bids received under the previous Government and appointed a Sugar Negotiating Team to finalize negotiations with those entities, which would return concrete bids, having done their due diligence. Pre-qualified bidders were expected to purchase the Information Memorandum, which was ready at the end of Decembers 2007, and which would have assisted them in formulating their bids. Four of the pre-qualified firms purchased the Information Memorandum, but only one, Infinity Bio-Energy Inc. of Brazil, returned a bid at the close of the process on February 18, 2007. Negotiations commenced with that entity on March 11, 2008. The bid was for the entire portfolio of Government’s sugar assets, with proposals to produce both sugar and ethanol, and the Government maintaining a 25% stake in the divested entity for at least 3 years. This bid was approved by the Cabinet and a Heads of Agreement signed on June 27, 2008. The sugar

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assets were to be handed over to Infinity Bio-Energy Inc. by September 30, 2008. In the meanwhile, with an agreement for divestment struck with Infinity Bio-Energy, the STU intensified its efforts to make the over 7500 workers employed by the SCJ in its 6 factories redundant, as a critical precondition for divestment. The redundancy payment to which these workers were entitled by law, was the first call on the EU accompanying measures resources. For most of 2008 the Ministry and the STU were engaged with the three trade unions in the SCJ to carefully compute each worker’s severance pay, serve the appropriate notice and execute the redundancy exercise without any industrial unrest in the sector. This feat was accomplished in late December 2008—7500 workers made redundant, costing the Government $1.9 billion. So pressing was the mandate to effect the redundancy, that the exercise was completed before any of the factories was divested. Infinity Bio-Energy missed the September 30, 2008 deadline to meet all the conditions to assume ownership and operations of the 6 governmentowned factories, as well as 2 further deadlines. They cited difficulty in mobilizing the necessary capital associated with the 2008 global financial crisis. On January 30, 2009, Government announced the suspension of the Heads of Agreement with Infinity Bio-Energy Inc. The Government re-engaged the divestment process immediately, inviting news bids in March 2009. The first 3 factories were divested in July 2009, St. Thomas Sugar Company to the Seprod Group to form the Golden Grove Sugar Company, and Long Pond and Hampdem factories to Hussey family to form the Everglades Farm Limited. Many of the workers made redundant were therefore re-hired immediately thereafter by SCJ, which continued to operate all six factories until August 2009. Frome, Monymusk and Bernard Lodge were divested after a third re-opening of the bidding process in early 2010. Four entities submitted bids by the July 2, 2010 deadline, and after evaluation of bids, the Cabinet approved the divestment of the three estates in mid-July 2010 to the Chinese company COMPLANT. COMPLANT would later acquire the business name of Pan Caribbean Sugar Company, under which it carried out its operations. With redundancy out of the way and the divestment framework formulated, the STU could turn its attention to implementing the second objective of the JCS in earnest in early 2009. With only very broad objectives set by the JCS in respect to its second objective of

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social, economic and environmental transformation of the sugar dependent areas, the STU, through studies and consultations had to formulate a concrete programme to achieve this objective. The Sugar Area Development Programme (SADP), which drove the social and economic transformation programme of SDAs was only formulated in 2008. This chapter will detail the various initiatives undertaken by the STU under its Sugar Transformation Programme (STP) and analyse the impact of these intervention on the Monymusk SDA.

Accounting for the Interventions As previously indicated, the major source of funding for the implementation of the JCS was the 86 million euros allocated to the Government of Jamaica by the EU under the accompanying measures resources. Basically, the Government was responsible for funding the redundancy payments associated with the divestment of its six estates, as well as funding the execution of a number of programmes to address long-standing social issues in SDAs, under specially designed SADPs. The SADPs were intended to cushion the negative effects of the redundancy programme on the most vulnerable and channel them into alternative livelihoods. This, with a view to ensure continued access by SDAs to education, health services, and other social services, formerly provided by the divested entities; to improve and or install critical amenities and infrastructure in SDAs; to improve the quality of life; and to expand economic opportunities for entrepreneurship through skills training and economic diversification. The Government was also responsible for funding critical infrastructure of a public goods nature, which were essential to achieving the goal of a strong and viable private sector led sugar industry. Such infrastructure included irrigation systems, cane roads improvement, and cleaning of regional drains. The private sector on the other hand was expected, through the divestment process, to finance the overhaul and rehabilitation of fields and factories and provide the managerial skills necessary for improving the efficiency of the industry, promoting new technologies of production, and effecting the diversification of the product base and markets. Through the attainment of Objectives 1 and 2 above, SDAs were expected to achieve a significant level of transformation. An economically viable and strong private sector led sugar industry would maintain employment in traditional sugar related jobs and expand opportunities for

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new jobs created by the diversification of the product base. Additionally, if the sugar industry remained strong, SDAs would be able to participate as cane farmers and providers of auxiliary services to the industry, and a strong industry was expected to have a significant multiplier effect on the local economies of SDAs. In turn, by implementing the SADPs, SDAs were expected to be more resilient, be equipped with the amenities and infrastructure that would make urban migration less alluring, and which would facilitate opportunities for expanded economic activities through diversification. Consistent with this rationale, the STU implemented a number of projects across all sugar dependent areas between 2009 and 2015. These projects are summarized in Table 8.1. The projects were diverse and not only required skill sets and competencies not normally resident in a Ministry of Agriculture, but required significant partnerships with other agencies of Government, non-governmental organizations and the private sector. The whole STP was implemented using the budget support mechanism of the European Union, rather than the project approach. Under the budget support approach, specific targets were agreed with the EU, to be achieved within a particular timeline. Once the targets and timeline were achieved, the EU released the funding to the Ministry of Finance. Using this mode of programme implementation, the Government had considerable autonomy in the implementation process, but had to fund the programme upfront and obtain reimbursement once the targets were achieved. In contrast, the project method would have required that EU rules and guidelines be used in procurement of goods and services.

Social Impact Assessment Having substantially implemented all the activities of the Adaptation Strategy, as outlined in Table 8.1, in May 2016 two surveys were conducted to assess the impact of the programme on two layers of the Monymusk SDA, that is, the people who were living on and accessed critical social services from the estate, and former employees of the estate who were made redundant in December 2008. In order to capture the impact of the JCS on the wider Monymusk SDA and to gauge popular opinion and reaction to the divestment of the Monymusk Estate to the Chinese firm Pan Caribbean Sugar Company in August 2009, a case study was also conducted in the area in June 2016.

Grants of Between $120,000 and $170,000 were disbursed to 5258 Vulnerable workers after the December 2008 Redundancy exercise

The STP funded the $620,632,000.00 development of 4 Agro Parks in the cane growing parishes of St. Thomas, St Catherine, Clarendon and Westmoreland

Monetary Grants to Vulnerable Redundant Workers

Development of Agro Parks (6)

$692,000,000.00

Description of intervention Total cost of intervention

Cost of intervention in the Monymusk SDA

$176,000,000.00 1171 grants were disbursed to vulnerable workers in the Monymusk SDA, ranging from J$120,000 to J$170,000 The Ebony Park $299,200,000.00 Agro Park in the Monymusk SDA on approximately 2000 acres of land. (8)

Description of intervention in the Monymusk SDA

Social interventions undertaken under the adaptation strategy (JCS), 2007–2016

Type of intervention

Table 8.1

(continued)

48.2

25.4

Cost of intervention in Monymusk SDA as a percentage of total cost, %

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Grant of $279,937,743 was provided by the STP to rehabilitate 15 sporting facilities across all SDAs Some 237 km of cane roads were rehabilitated in all SDAs to facilitate more efficient transport of farmers’ cane and improve living conditions of residents Cane Expansion Fund was created to provide subsidized loans to some 1312 cane farmers in all SDAs

Rehabilitation of Sporting Facilities

Cane Expansion Fund

Rehabilitation of Cane Roads

Skills training and certification targeting people in SDAs affected by divestment to channel them into alternative employment/livelihoods. 858 people enrolled

$2,231,239,308.28

$1,803,530,913

$279,937,743

$159,200,000

Description of intervention Total cost of intervention

(continued)

Training

Type of intervention

Table 8.1 Cost of intervention in the Monymusk SDA

$288,819,747 Several Km of roads were rehabilitated in the Monymusk SDA in Comfort, Gravel Hill, Rhymesbury, Gimme-me-bit Some 230 cane $595,096,018.87 farmers benefitted in the Monymusk SDA

$24,500,000 186 people enrolled in the Momymusk SDA including 31 males and 155 females in housekeeping and commercial food preparation Monymusk SDA $55,427,743 benefitted from 2 facilities in Water Well and Toll Gate

Description of intervention in the Monymusk SDA

26.7

16

19.8

15.4

Cost of intervention in Monymusk SDA as a percentage of total cost, %

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Total

Small Projects

Some 24 small projects completed in the Monymusk SDA

$1,349,493,400

$9,352,963,616.28

88 new houses constructed in Springfield

400 new houses constructed for families who were living in deplorable sugar barracks in 2008 Some 131 small projects completed in all SDAs covering school expansion, improvement of clinics, libraries, community centres, rural electrification and improved water supplies

Barrack Relocation Programme

Description of intervention in the Monymusk SDA

$2,216,930,252

Description of intervention Total cost of intervention

Type of intervention

$2,238,645,944.87

$319,336,185

$480,266,251

Cost of intervention in the Monymusk SDA

23.9

23.7

21.7

Cost of intervention in Monymusk SDA as a percentage of total cost, %

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In respect to the residents of the Monymusk Estate, from a population of the 1000 residing on the estate in 2010, a sample of 187 residents were surveyed, and from the 1171 employees deemed vulnerable and who were made redundant from the Monymusk Estate in 2008 and subsequently received monetary grants, a sample of 412 were surveyed in May 2016. The surveys were structured to capture data on gender, employment and educational status, access to critical utilities/social amenities, as well as feedback on their knowledge and use of benefits and programmes under the STP and their perception of how their lives changed since the implementation of the programme. The analysis of the findings are highlighted below. Assessment of the Impact of the JCS on Grant Recipients General Profile of Grant Recipients From the sample of grant beneficiaries surveyed 67% were male and 33% female, 42% employed and 58% unemployed. Recall that at the time of the baseline survey in 2008, as recorded in Chapter 7, only 29% of those made redundant had found employment, translating to an unemployment rate of 71%. This 71% would have been unusually high and reflected the fact that when the 2008 survey was conducted most of the respondents had already received notice of redundancy, and not yet been re-employed. The 58% unemployed in this survey would suggest some improvement in this indicator, though it is significantly above the national unemployment rate, which the Statistical Institute of Jamaica reported to be 13.7% in July 2016. At any rate, this 58% unemployment rate is consistent with the 42.3% and 52% unemployment in 2014 recorded by the Social Development Commission (SDC)1 in the development area profiles for the Lionel Town and Milk River development areas, which constitute the Monymusk SDA. Unemployment, therefore, seemingly remains a critical socio-economic issue in SDAs, notwithstanding the interventions of the JCS. In terms of educational attainment, the 2016 Survey shows 56.6% of the respondents attaining primary/all-age education, 30.6% attaining secondary level education and 4.5% with vocational or tertiary education. Only 9.3% of grant recipients surveyed were living on the estates and 1 The SDC is a statutory agency of the Government, with a mandate of community development.

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70.5% of those living on the estate were between the ages of 36 and 65, that is, people within their working age, still dependent on the estates for housing. Benefits Received from the STP and the Use of These Benefits The monetary grants received by beneficiaries were disbursed in several ways based on the needs and choices of recipients. The grants could either be received as monthly/fortnightly cash payments through a financial institution, as equipment and inputs to start new businesses, as animals/animal feed to start chicken or goat rearing projects, through contribution to mortgage payments and in some instances for the payment of children’s tuition fees. 91% of respondents (Fig. 8.1) received their grants through periodic cash payments through a credit union or bank, followed by 6.1% who used their grants to contribute to their mortgage payments. A mere 3% used their grants to acquire inputs and equipment to bolster existing or start new enterprises. All things being equal, there is a greater propensity to use cash to satisfy basic needs such as food, medication, and so on, than to invest in enterprises that can generate new income, and hence self-sustaining. This raises the question therefore as to the extent that these grants assisted in channelling recipients into new livelihoods.

Fig. 8.1 Type of assistance received

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In addition to the grants received, the recipients were questioned in relation to their awareness of and/or their receipt of other benefits from the STP. Only 11% of the respondents acknowledged receiving any other benefit from the STP and a mere 3% were beneficiaries of STP sponsored training programme administered by the HEART Trust/NTA2 and the 4-H Clubs.3 It will be recalled that the STP invested some $159 million to train some 858 people across all SDAs, 15.4% of which was expended in the Monymusk SDA. The low level of uptake of these training opportunities for grant recipients who were deemed most vulnerable, is not altogether unexpected, given the age profile of this group and the relatively low levels of educational attainment. Over 73% of recipients were over 46 years old and only 30.6% attained any level of secondary education, which would have been a prerequisite to matriculate for these courses. Interviews with the management of the STU revealed that deliberate and strenuous efforts had to be made to find eligible candidates for these courses. The truth is more customized training courses would have been more appropriate to meet the needs of this targeted group, however this would have taken more time than agreed with the E.U. to achieve this target under the financing agreement with the E.U., and hence jeopardize the Government accessing the portion of the EU funding relating to this target.4 In terms of the general awareness of other STP interventions, there was a general lack of awareness of the programmes (see Fig. 8.2). This level of awareness of STP’s interventions is disproportionate to the range of interventions implemented and the quantum of resources expended, as outlined in Table 7.1. Although the interventions could be impactful without people being aware of the source of funding for the interventions, the low level of awareness probably speaks to the general lack of wide consultations in devising the interventions. The management of the STP for instance, confirmed that roads slated for rehabilitation

2 The Human Employment and Resource Training/National Training Agency (HEART/NTA), is a statutory agency of the Government, engaged in technical and vocational skills training and certification. 3 The Jamaica 4-H Clubs is a statutory agency of Government, responsible for development of youths in agriculture. 4 Under the financing agreement between the GOJ and the EU, funding for the implementation of the JCS was released in tranches, subject to attainment of previously agreed targets.

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Fig. 8.2 Awareness of programmes offered by the STP

were proposed by the Harvesting Committee of each factory and infrastructure projects were basically proposed by local committees without any consultations with the wider public. The question arises as to the extent to which these committees were even representative of the wider communities, and the extent to which their choices reflect the real and most pressing needs of the communities. Clearly, recipients of grants were not specifically targeted for consultation, nor were they sufficiently represented in the committees selecting the projects. This constitutes a major implementation flaw. Perception of Impact In response to the question as to whether life was better for the respondents compared to when they worked on the estates, that is, before the redundancy, 48% indicated that they were worse off, 21% saying that they were better off, and 31% saying life has been the same (see Fig. 8.3). There are theoretically many factors that could impact one’s quality of life. For the purposes of this survey however, what was explored in order to measure quality of life was one’s ability to take care of one’s self and family, and the extent to which the grants contributed to that capacity. The following questions were therefore posed to the respondents: “Are you able to support yourself?”, “Are you able to support your family?”, and “Are you currently able to meet your daily need?”. In response to these questions, over 57% of respondents suggested that they could take care of themselves, 50% could take care of their families and 69% asserted that they could meet their basic needs. Therefore, despite only 21% of respondents indicating that they were better off since cease working on the estates (after redundancy), the majority attested

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Fig. 8.3 Perception of current quality of life, May 2016

that they could take care of their basic needs and support themselves and families. The Role of the Grants in Assisting Recipients to Meet Their Needs Having established that the majority of the respondents were able to meet their basic needs, take care of themselves and family, it was then ascertained how the benefits (grants) the respondents received from the STP contributed to that ability. Generally, more people believed that the grants did not make their lives better, that is, they were worse off or their condition remained the same, in response to the question: “To what extent would you agree or disagree with the following statement: the money (equipment and supplies and animal feeds) I received made my life better.” However, this perception varies with the kind of benefit received, with 43% of those receiving monetary grants, 38% of those receiving equipment and supplies and 60 of those receiving animals/animal feeds agreeing that their lives were better. Cleary, the 1.1% of respondents who received grants in the form of animals and feeds had the greatest perception of a positive impact, demonstrating the more sustainable nature of this benefit. Interestingly, when asked if the grants impacted their ability to support themselves and/or families, the responses were far more

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favourable over all categories of benefits, except those receiving equipment and supplies. Again, the respondents receiving animal feed had the most favourable perception of impact (see Figs. 8.4 and 8.5). Respondents in receipt of equipment and supplies were not very successful in their business ventures. Generally, more new ventures fail than succeed, and providing capital for new ventures without commensurate training and business counselling does not augur well for success. Small scale rearing of goats and chicken is very popular in rural Jamaica, because these enterprises require minimal land space and there is a high turnover and demand for these products. It is instructive that this survey shows that as much as 46% of respondents engage in farming activities on their properties. This 1.1% of recipients who opted for animals/animals feeds would quite likely had been familiar with the rearing of chicken and goats.

Fig. 8.4 Assistance and ability to support one’s self

Fig. 8.5 Assistance and the ability to take care of one’s family

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A further investigation of the perception of the impact of JCS’ interventions on the quality of life and the capacity to support one’s self and family was conducted along age, gender, education, and social class lines. The results show clearly that perceptions differ based on these variables. In terms of the perceived impact of the grants on improved quality of life, more females (46 versus 41.1% for male), believed that the support they received assisted in improving the quality of their lives. At the same time fewer respondents from the lower socio-economic strata had an unfavourable perception of the contribution of their grants in improving their lives and the less educated generally had a more favourable perception of the contribution of the STP grants to improving their lives. The more favourable perception by women might be attributed to the fact that women were given grants of $170,000, as against the $150,000 received by males. The rationale for this discrimination, as explained by the management of the STP, was that women tend to be more reliable and responsible in using their resources to improve their lives and their families. In terms of the ability to support one’s self, slightly fewer females had a favourable perception of the impact of the support than males. There was a distinct correlation between age and perception of the impact of the grants to support one’s self, with favourability decreasing with advancing age. This is understandable, as younger people had fewer responsibilities to family, and may probably have lived with families, which took care of their housing, utilities and food, thus enabling them to use their grants to take care of their personal needs. Based on social class, the lower and middle classes had a more favourable perception. It must be noted though, that overall the perception of the contribution of the grants to assist respondents to support themselves are generally more favourable than respondents’ perception of the contribution of the said grants to make their life better. In terms of the impact of the grants in supporting one’s family, the trends are analogous to those seen for the role of the grants in supporting one’s self. Generally, while the majority of the respondents considered their quality of life worse off or unchanged since the commencement of the implementation of the JCS, and that the JCS interventions did not improve their quality of life, they nonetheless acknowledged that they were in May 2016 able to meet their basic needs and support themselves and family. Furthermore, the majority of the recipients acknowledged the positive contribution of the STP’s grants in assisting them to

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support themselves and their families, particularly those recipients that received animals and feeds. Younger people and respondents in the lower socio-economic classes were more positive in their assessment. It seems reasonable therefore to conclude that the grants, while assisting recipients to meet the temporary needs of themselves and families, did not have an enduring impact. This is not surprising, as 91% of the respondents received their grants in the form of periodic cash payments, which are more likely to be used for short-term recurring needs, such as food and medication, rent etc., rather than being invested in businesses that can provide a sustained source of income. In this regard, it is instructive that the recipients of animals (chickens and goats) was the only group which thought their lives were in fact better. Those who received equipment and supplies fared the worst, presumably because of failing business. This speaks to the need for business training, mentorship, and counselling, which was not sufficiently engaged in the implementation process, as critical pre-requisites for enhancing the prospects of success of business ventures. Other Indicators of Quality of Life Quality of life is not defined solely by one’s ability to meet one’s basic needs and to take care of one’s self and family. Access to critical amenities such as water, sanitation, health care, and land ownership also help to define quality of life. Although land tenure and access to basic amenities were not specifically measured for this population (grant recipients) in the baseline survey, these indicators in the May 2016 survey provide some commentary on the quality of life of this group, and the results will be compared to national figures from the Jamaica Survey of Living Conditions. The survey results (Fig. 8.6), show that 76.2% of the sample had access to piped water, with 16.9% accessing water from community stand pipes. While piped water coverage compares favourably with the national average of 70% (Planning Institute of Jamaica, 2012), the percentage of respondents accessing water from public stand pipes was almost three times the national figure of 6.2%. What is even more alarming, is the fact that some 6% of the respondents were accessing water from rivers, making them susceptible to various water borne illnesses. Although there is no baseline figure for this indicator, so that the impact of the STP initiatives could be properly measured, the STP implemented at least two water supply systems in the Westmoreland and Trelawny SDAs, through its

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Fig. 8.6 Types of access to water by grant recipients

Fig. 8.7 Types of bathroom facility used by grant recipients

small projects sub programme, at a cost of $28.8 million. No water and sanitation projects were implemented in the Monymusk SDA. In relation to sanitation, 53% of the grant recipients had indoor plumbing, while 45% use pit latrines. Access to indoor plumbing (water closet) is below the national level of 73.8%, and the prevalence of pit latrines is higher than the national figure of 26% (Planning Institute of Jamaica, 2012) (see Fig. 8.7). In terms of land tenure, 65% of the respondents indicated that they owned the land on which their dwellings are located. This percentage compares favourably with the national figure of 60.2%. Although there

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is no comparable baseline figure for this indicator relative to the grant recipients, the STP expended some $2.2 billion to construct some 400 houses for former residents of sugar barracks to enjoy free of charge. An additional 12665 housing solutions have been developed by the SCJ Holdings Limited for residents living on estate properties in Westmoreland, Clarendon, St. Thomas and Trelawny and were sold at a subsidized price to these residents. Both these lots and houses have been outfitted with water supply, sewerage, and electricity. Notwithstanding, these developments in the provision of housing, there still remained a serious housing deficit in SDAs, considering SCJ Holding’s 2010 survey, which showed that over 10,000 families (comprising 30,000–40,000 persons) were living on estate lands across 6 government owned estates, of which only 2256 families were entitled to live in those spaces. This chronic social condition will be revisited in the next chapter. Coping Strategies It has already been established that the majority of the grant recipients considered their lives to be either worse or remaining the same. Although employment increased compared with the baseline period, the unemployment rate was still alarmingly high in May 2016. The fact that 91% of the recipients received periodic cash grants over a one-year period, meant that although the cash assisted them to take care of themselves and families, while it lasted, as at 2016, most recipients saw their lives as not having been improved. It was important therefore to investigate the coping strategies of this group. Some 27% indicated that they were in receipt of social benefits under varying social protection programmes of the Government such as the National Insurance Scheme (NIS), Programme of Advancement through Health and Education (PATH) and the Jamaica Drug for the Elderly Programme (JADEP). A slightly lower percentage (21%) indicated that they received support from families in Jamaica and 18% were in receipt of support from relatives overseas. These general levels of external support were higher than reported in the baseline survey (see Chapter 7), thus confirming that the quality of life of this population worsened compared to the pre-divestment period.

5 As reported by the CEO of SCJ Holdings Limited in email dated 2016 November 9.

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Assessment of Impact on Residents of the Monymusk Estate As previously stated in Chapter 7, there were over 30 communities existing on the six government owned estates, prior to divestment, hosting over 10,000 families and comprising 30,000–40,000 people. These residents were basically workers on the estates who were provided houses, as well as descendants of workers or former workers, who over the years had not vacated these houses, even though they no longer had any formal (employment) ties with the estates. Over time, as well, other people came onto estate lands to live informally and some of these settlements have grown into full blown communities. Part of the commitment of the Government prior to the divestment of the estates was to resettle some of these people and/or regularize some of these communities, particularly where they occupied houses and lands to be included in the divestment portfolio. SCJ Holdings was designated the agency of the State to undertake this responsibility. It was SCJ Holdings that surveyed a sample of these residents in 2010, that is, the 2256 families which were deemed legitimate residents of all SDAs, and which were characterized in the baseline assessment in Chapter 7. That survey showed that 30–40% of those residents were unemployed, and of those employed, most were not employed to the estates, and a significant portion of them had never been employed to the estate, particularly in Monymusk and Frome. They were also not paying rent and relied significantly on the estates for basic amenities. In other words, the estates were carrying a heavy social burden of sustaining hundreds of people who were not any longer nor in many instances ever employed to them. This underlines the deep dependency of these residents and communities on the estates. Obviously, privately owned estates could not be saddled with this social burden and be expected to make profits. The 2016 survey of a sample of 187 of the 1000 legitimate residents of the Monymusk Estate in 2010, showed that 69.8% were male and 30.2% female. The educational profile (Fig. 8.8) reveals that 4.9% had no formal education, approximately 50% attained some level of secondary education as their highest level of educational attainment, and only 5.7% had any vocational/tertiary. The survey further shows that 52.5% of the respondents were employed in 2016, with 47.5% unemployed. The employment situation was worse in 2016 than obtained in the 2010 survey, when the employment rate was 69.6% among residents on the Monymusk estates. The

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Fig. 8.8 Educational profile of residents of Monymusk Estate Housing, 2016

deteriorating employment situation is not unexpected as the new owners of the Monymusk factory made hundreds of workers redundant in preparation for the Government to temporarily take over the operation of the factory in the 2016/2017 crop year (see case study report). In terms of educational profile and employment status, this segment of the SDA was not dissimilar to the profile of the grant recipients, and indeed, that of the wider Monymusk SDA, as per the development area profiles of the SDC. From all indications, therefore, people in the Monymusk SDA so far as employment is concerned, were faring far worse than what obtained nationally, as national unemployment in 2016 was reported by STATIN to be 13.7% in July 2016. The question arises, what impact the economic diversification programmes and the skills training initiatives of the JCS had on the Monymusk SDA and its residents? Although some $299.2 million was expended by the STP and the Agricultural Competitiveness Programme (ACP), to develop two agro parks in the Monymusk SDA (see Table 8.1), this had not impacted the residents of the SDA in any meaningful way, particularly the most vulnerable (grant recipients and residents of the estates). A review of the list of beneficiaries6 of agro park 6 As reported by the CEO of Agro Invest Corporation, the statutory body responsible for the management of Agro Parks, via email dated 2016 September 20.

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lands across these agro parks showed that none of these former sugar workers were beneficiaries. This is not surprising as the capital requirement, the agricultural acumen, and marketing savvy needed to operate in these agro parks, representing the “new agriculture”, would not be in the reach of either grant recipients or estate residents. Smaller scaled, less sophisticated agricultural enterprises such as goat and chicken rearing seem to be more suitable for this segment of the SDA, attested to by the positive feedback of those grant recipients who were in receipt of animals and feed. Unfortunately, only 1.1% of these grant recipients opted for this form of assistance. The survey indicates that only 50% of respondents were living on the estate in 2016. This is a major development, as in 2010 these 50% of the sample would have been living on the estates. A 50% attrition from the estates, (of the 1000 legitimate residents on Monymusk Estate), over six years is a fundamental shift in terms of dependency on the estates. This movement might not necessarily reflect solely the initiative of the residents themselves, as indeed the SCJ Holdings provided some 1266 housing solutions up to 2016 to these residents on all former government-owned estates, in addition to the 400 houses provided by the STP under the Barrack Relocation Programme. In fact, the housing solutions provided by the SCJ Holdings Limited might have impacted the illegal settlers on estate lands outside of the 1000 deemed legitimate residents in 2010, as the solutions created by the SCJ Holdings were not sold solely to the legitimate residents, even though they might have had the first preference. At any rate, the SCJ Holdings indicated in 2016 that they were in the process of developing another 3000 housing solutions in partnership with private developers and the National Housing Trust, to be delivered over the next three years. In addition to the 1266 solutions already delivered, the 3000 would definitely further impact residents in communities on estate lands. Perception of Change in Quality of Life The majority of respondents (84%), considered their lives to be either worse or unchanged compared to 2010 (see Fig. 8.9). Notwithstanding this perception, 76% of the respondents indicated that they could meet their basic needs and 67% said that they were able to support their families. This trend is analogous to the findings for grant recipients. Again, it appears that the ability to meet one’s basic needs and support one’s family are not the sole indicators of quality of life.

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Fig. 8.9 Perception of quality of life by residents of estate housing 2016

Fig. 8.10 Type of bathroom facility used by residents of estate housing, 2016

In terms of other indicators of quality of life, 61% of respondents had access to indoor plumbing and 37% used pit latrines (see Fig. 8.10). This is significantly better than the 2010 baseline figures, where access to indoor plumbing was 30% in the Monymusk SDA. Similarly, the use of pit latrines decreased in relation to the baseline, where 41.7% of the

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residents were using pit latrines. This is a positive development and relates to the housing initiatives undertaken by the STP and the SCJ Holdings limited. In relation to land tenure, a significant 75% of the respondents indicated that they owned the land their houses occupied. Not only was this way above the national average (60.2% per PIOJ, 2012), but this confirms the movement from largely free estate houses to independent living outside of the estates (see Fig. 8.11). This is not surprising, given the over 400 houses provided free of cost to former residents of the barracks, in addition to over one thousand housing solutions provided to sugar workers at subsidized prices by SCJ Holdings Limited. Given the worsening employment situation and the very strong perception on the worsening quality of life, what were the coping mechanisms for these residents? Some 12% indicated that they were in receipt of government welfare/social support such as NIS, PATH, and JADEP, 9% were receiving support from family in Jamaica, and 10% were receiving support from family overseas. The survey showed that 45% had farms on their property, although 71% of these farms were less than one acre.

Fig. 8.11 Land tenure of residents of estate housing, 2016

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Environmental Impact Assessment Overview As discussed in Chapter 7, before the implementation of the JCS, the sugar industry in general and the Monymusk Sugar Estate in particular, were having a negative impact on the environment. This has been evidenced by the strategic environmental assessment of the JCS commissioned by the European Union Delegation in 2010, the environmental audit of the 6 estates conducted by the SIA in 2008 in preparation for their divestment, and the more general reports on the state of the environment in Jamaica in the 2008–2010 period, conducted by NEPA. These reports identified such issues as pressure on water resources, land use changes, contamination of ground and surface water through untreated waste water and agricultural run offs, as well as discharge of pollutants in atmosphere, as critical impacts of the sugar industry on the natural environment. The implementation of the JCS over the period 2006–2015 was expected to reduce the environmental footprint of the sugar industry, and through the expansion of cane production and introduction of the production of ethanol and cogeneration make a positive contribution to the environment, by creating a greater carbon sink and reducing reliance on fossil fuels. The implementation of the JCS was expected to increase cane and sugar production, as well as the production of ethanol. The expanded production of these mix of products would certainly put greater strain on water resources, generate greater volumes of effluent and agricultural run offs, contributing to pollution of ground and surface water. However, the JCS envisioned that these potential negative impacts would have been mitigated by greater compliance with environmental regulations requiring tertiary treatment of effluent, re-use of treated effluent, greater efficiency in water usage through widespread use of drip irrigation and overall greater control of emissions. Additionally, the Government undertook to remedy all pre-existing environmental breaches in its 6 estates slated for divestment, so as to hand over to new owners a clear slate, and thereby foster a new culture of environmental compliance in the industry. This new ethos of environmental compliance was not expected to be altruistic, as many of the proposed environmental practices were expected to have a positive impact on the bottom line of the new owners. Drip irrigation for instance has been

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proven to increase crop yields in a substantial way, cogeneration of electricity from burning bagasse would not only reduce the electricity and fuel expenditure of the factories, but provide new streams of revenue through sale of excess electricity to the national grid. Overall Compliance of the Monymusk Estate with the Action Plan Agreed with NEPA in 2011 The Monymusk Estate along with the Bernard Lodge and Frome Estates were divested to the Chinese company COMPLANT International Sugar Company Limited, in 2010. COMPLANT, trading as Pan Caribbean Sugar Company Limited (PCSC), by agreement, requested the SCJ Holdings Limited, which operated the estates on behalf of the Government between 2008 and 2010, to continue operating the Estate for the 2010/2011 crop year. PCSC, therefore, assumed operations in August 2011. In preparation for the divestment of the six government owned estates, the SCJ Holdings Limited formulated and submitted action plans to NEPA for all six estates between 2010 and 2011, indicating the specific actions that would be undertaken to bring each estate into compliance with all the necessary regulatory requirements. The action plan for Monymusk was submitted on May 5, 2011. Under this action plan, and as per Agreement for Sale and Purchase between the Government and COMPLANT, the Government undertook to remedy all the breaches identified by NEPA occurring before divestment, and the new owners—Pan Caribbean was responsible for applying for all necessary licences and permits under the NRCA Act by June 30, 2011. According to a NEPA report dated February 10, 2014 entitled Sugar Company Environmental Compliance Audit Update (2014b, p. 2), “SCJH had completed all the physical works associated with the plan by December 2011”. These physical works included: 1. Cleaning of blocked waste water streams. 2. Installation of grease straps on all drains. 3. Repair and replacement of all non-functional grease straps. 4. Undertaking remedial works on bunds, as well as construction of bunds where necessary. 5. Institution of a proper solid waste disposal system in collaboration with the NSWMA. 6. Installation of adequate storage for oils and chemicals.

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In addition to the above, SCJ Holdings Limited was responsible for implementing a number of systems for monitoring and testing of certain environmental parameters to ensure compliance with regulatory standards. NEPA (2014b, pp. 2–3) concluded that “SCJH has done its part in completing a number of physical infrastructure works that would have ensured the environmental damage which would have been caused during operation of the facilities was minimized”. This represents a significant shift in the environmental management of the industry, as the Government through the expenditure of significant financial resources remedied important breaches incurred during its tenure as owners and managers of 70% of the industry. This signalled a willingness to give the new owners a clean slate with respect to environmental management of these estates and set a new bar for the then existing private players in the industry, that is, Appleton and Worthy Park Estates, in terms of responsible environmental management. Despite the Government’s effort in addressing agreed actions in the Action Plan, NEPA (2014b, p. 3) indicated that “the new owners have, however, failed to address the permit and licence requirements of the NRCA. The new owners have also not addressed many of the operational, monitoring, and maintenance procedures and programmes that ensure good environmental stewardship and continuous compliance.” Although Pan Caribbean Sugar Company should have applied for air pollutant discharge and trade effluent discharge licences since June 2011, according to NEPA (2014b, p. 6), they only obtained Air Pollutant Licence in 2013, and according to NEPA (2016) this company had still not applied for the necessary trade effluent licence in 2016. Although Pan Caribbean Sugar Company Limited has been in receipt of an Air Pollutant Discharge Licence since 2013, in respect of its Monymusk Estate, NEPA (2016) identified a number of issues with non-compliance with the conditions of the Licence. According to NEPA (2016, pp. 7–8), Pan Caribbean was still not properly managing fugitive emissions, in terms of properly storing bagasse and periodically wetting the grounds to reduce dust nuisance, consistent with the fugitive emission control plan submitted to NEPA in 2014 by the Estate. The report further states that in contravention of the conditions of the Licence, Pan Caribbean was not carrying out opacity readings and reporting as prescribed, and maps showing location of stacks and load stations were non-existent. Meteorological parameters such as wind speed direction, rainfall, temperature, and pressure were not being measured and reported.

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Stack/source testing was not being carried out and the entity had failed to report to NEPA on air emissions, as well as on heavy metal and lead contents in the recycled oil they used in their boilers. On the positive side, NEPA (2016, p. 7) reported that Pan Caribbean was issued in 2014 with a permit “for the construction and operation of a power generation facility.” This was to facilitate generation of electricity from the burning of bagasse, which would improve the cost efficiency of the entity, provide a new stream of revenue from the sale of excess electricity to the national grid, and overall reduce the nation’s carbon footprint, while enhancing Jamaica’s energy security. Up to 2016 however, this cogeneration operation had not commenced, as Pan Caribbean had not, to that time, secured a power purchase agreement from the utility company—Jamaica Public Service Company Limited (JPSCo). The potential benefit of this development therefore had not been realized. In relation to waste water disposal, NEPA (2016, p. 11) stated that “the facility is operating without an environmental permit or licence.” However, the said report indicated that the neighbouring Clarendon Distillers Limited was in possession of a Trade Effluent Discharge Licence. The impact of the discharge of effluent in water ways will be dealt further on in this chapter. General State of Environmental Management in the Sugar Industry Since the Implementation of the JCS The issues of land degradation and pressure on water resources identified in the SEA were predicated on the planned doubling of sugar cane production in the JCS, from 1.74 million tonnes in 2006 to 3.5 million tonnes by 2015 to satisfy the mix of products contemplated—sugar, molasses, rum, ethanol, and cogeneration (European Union Delegation in Jamaica, 2009). This would have required a significant increase in the quantum of water used by the industry, particularly in the Monymusk SDA, which has the most available lands for sugar cane expansion. Concomitantly, this would have aggravated the problem of saline intrusion in this area, a situation that was already being compounded by sea level rise, brought on by climate change. These concerns, however, might not have materialized, as divestment since 2010 had not resulted in the increase in sugar cane or sugar production as contemplated by the JCS.

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Sugar cane production by the PCSC on their Monymusk Estate declined from 219,892 tonnes in the last year (2011) before Pan Caribbean assumed operational control of the Estate to 85,569 tonnes in 2015, even though they leased from Government some 18 thousand hectares of land. Small independent farmers, however, who had restricted access to land and generally operated on areas below 5 hectares, recorded a significant increase in sugar cane production from 89,431 tonnes in 2011 to 167,842 tonnes in 2015. These small independent farmers made good use of the loan resources provided under the Cane Expansion Fund, funded by the accompanying measure resources from the EU. The management of the Cane Expansion Fund indicated that as at June 12, 2017 some 2100 loans were approved to establish 12,428 hectares of sugar cane. The expansion of sugar cane production by independent farmers would not have impacted water resources as badly as would have obtained before the JCS’s implementation, as through the Cane Expansion Fund, drip irrigation was heavily promoted and implemented. According to the Cane Expansion Fund, 706 hectares of new sugar cane were established in the Monymusk SDA under drip irrigation. Although the overall reduction of sugar cane production in the Monymusk SDA would have eased the pressure on ground water resources and land degradation, there remained serious concerns regarding water usage in this area even after the JCS implementation. The reduction in water production by the National Irrigation Commission (NIC), from 125 million m3 in 2009/2010 to 84.5 million m3 in the 2014/15 year is consistent with the reduction in overall sugar cane production over the same period. Notwithstanding the reduction in cane production, however, there remained serious issues with irrigation efficiency, reflected in the declining amount of water being produced per pumping hour. If in 2008/9 one hour of pumping produced 1195 cubic metre of water, by 2014/15 within the same one hour of pumping, only 702 cubic metres of water was produced. In other words, the NIC was using more and more pumping hours to produce less and less water between 2008/9 and 2014/15. This situation related to prolonged droughts which plagued Jamaica annually between 2014 and 2016. Considering that expensive oil was being used to operate these pumps using expensive electricity from the JPSCo, then this must have had a devastating impact on the NIC’s bottom line.

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The ratio of water sold to water produced is a proxy for irrigation efficiency. The difference between water produced and water sold provides a commentary on the extent of transmission losses. In this regard, the NIC had not been doing well. From 78% in 2009/10, the last financial year before divestment of the government estates, the percentage of water sold of the total water produced declined to 54% in 2012/13, building up back to 68% by 2014/15. Therefore, since the introduction of the JCS, water production had been reduced and the efficiency of water production and utilization had similarly declined. The arresting of transmission losses was therefore a serious imperative for the NIC. Based on figures supplied by the NIC, since the JCS, that is, between 2012 and 2016, only a mere $19 million had been spent to line approximately 1.7 km of earthen canals, compared with an estimate of $1.34 billion required to line canals, replace leaking pipes, and generally stem water losses. The resources provided to the NIC therefore did not match the commitment of the JCS to double sugar cane production in Jamaica, and raise issues about the Government’s own commitment to very JCS it promulgated. The burning of cane represented one of the most serious sources of air pollution in the Monymusk SDA, and the practice also has a negative impact on soil structure and fertility, as well as water usage for washing of cane in the factory, and consequently on the quality of effluent generated by the factory. Although Jamaica had commitments under the Stockholm Convention to eliminate this practice, which releases persistent organic pollutants into the atmosphere, the sugar industry had not yet come into compliance up to 2016. Shortage of equipment for mechanical harvesting, the prohibitive cost of these equipment for small farmers, and the configuration of the fields of small farmers, which preclude the use of mechanical harvesters, had all militated against the elimination of cane burning in Jamaica. Part of the remit of the Sugar Transformation Programme under the JCS was the promotion of green cane harvesting as part of the efforts to improve the environmental sustainability of the industry. The Sugar Transformation Programme provided support to select farmers to reap their fields green. This support merely covered the cost of reaping, rather than providing additional capacity through the provision of more equipment to ensure that the practice was sustained. According to reports from the Sugar Transformation Programme, some 510 hectares of green cane had been harvested. This of course was a minute percentage of the over

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25,000 hectares of cane in Jamaica. In this respect therefore, the JCS had not made a significant impact on the environmental management of the industry. Water Quality Impact Assessment In order to assess changes in water quality in the Monymusk SDA since the implementation of the JCS, results of water quality tests carried out by NEPA and the Sugar Industry Research Institute (SIRI) in the period May 2016 to March 2017 will be compared to results of NEPA’s tests carried out between 2008 and 2010, and highlighted in Chapter 7. In addition to the six parameters tested in 2008–2010 period—phosphates, nitrate, BOD, TSS, TDS and pH, for the 2016–2017 period other parameters such as sodium, electrical conductivity, potassium, chlorine, chemical oxygen demand (COD), zinc, iron, copper, manganese, boron and salinity were also tested. It is important to note that only one site coincided with the sites used by NEPA in the baseline period, that is, Alley Bridge. This site is significant, in that, it was the closest site of impact, being the nearest point to which the factory discharged its effluent in the river. In the 2016–2017 period, sites outside of the Rio Minho watershed area, such as Milk River and Savannah Gully, were also included to allow for comparison, as well as sites upstream and downstream the point of impact (Alley Bridge), to facilitate a longitudinal analysis of the impact. Methodology Samples were collected by a NEPA/SIRI team at nine sampling sites within the Monymusk SDA viz: Alley Bridge, Milk River, Rio Minho/New Yarmouth, Rio Minho Mouth, Riverside Pump # 1, Rocky Point, Sand Mine, Savannah Gully, and Water Lane. Samples were collected at each site monthly for the period May 2016 to March 2017 by hand and by boat using Wheaton clear glass BOD bottle and Nalgene bottle for nutrient analysis. After appropriately labelling and securing the bottles, the samples were sent to NEPA and SIRI laboratories respectively. The NEPA laboratory conducted BOD and salinity tests, while the SIRI laboratory conducted all the other tests (Table 8.2).

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Table 8.2 Methods used to test water samples, May 2016 to March 2017

Parameter

Methods

BOD

BOD Five-day Method HACH Method 8000 HACH Method 8039 HACH Method 8114 SM Method 2540D Electromometric Gravimetric Flame photometry Flame photometry Electrometric Silver Nitrate Titration Atomic Absorption Spectrometry Atomic Absorption Spectrometry Atomic Absorption Spectrometry Colorimetric

COD Nitrate Phosphate Total Suspended Solids Conductivity Total Dissolved Solids Sodium Potassium pH Chloride Zinc Iron Manganese Boron

All tests were conducted using methods contained in the “Standard Methods for the Examination of Water and Waste Water—22nd Edition”

Comparison of 2016/17 Parameters with 2008/10 Parameters Comparing the levels of the six parameters over the two periods, reveals that for every parameter with the exception of pH, the levels in the 2016/17 exceeded those of the 2008/10 period at the Alley Bridge site. Additionally, there was a greater level of variability in the levels of the parameters in the 2016/17 period. The episodic behaviour in the parameters in the 2016/17 period suggests management issues at the Monymusk factory in consistently controlling these parameters. One tailed paired t-tests were conducted on the data obtained, to determine if there were significant differences in the level of the parameters between the two periods. One tailed tests were used as the empirical data show higher levels of these parameters through-out the 2016/2017 period. Based on these tests, the differences are significant for TDS and

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nitrates at the 95% confidence level. It seems this significance in the difference in the levels of these parameters over the two periods could be attributed to poorer levels of environmental management of both field and factory operations at Monymusk Estate since privatization in 2010. This conclusion is based on the development area profiles of the SDC, referred to in Chapter 7, as well as census data from STATIN, which indicate that there had been no significant change in the population nor economic/industrial profile of the Monymusk SDA that could have explained significantly higher levels of TDS and nitrates. In relation to the NEPA’s trade effluent standards, extracted from the Jamaica National Trade Effluent Standard 1995, TDS exceeded the standard both in the baseline and the 2016/17 period, though at higher levels and with greater variability in the later period. TSS, phosphates and nitrate, while within the trade effluent standard range throughout the baseline periods, exceeded the standard range on occasion in the 2016/17 period. Both BOD and pH were well within the trade effluent standard range in both periods. The levels of five parameters—nitrates, phosphates, BOD, TSS and TDS, were compared at the Alley Bridge site, the nearest site to where the Monymusk Factory discharged its effluent, to the Milk River Site, not impacted directly by the factory discharge, to obtain some insight as to the direct impact of the factory on water quality in the Monymusk SDA. The analysis showed that for TDS, TSS and BOD the levels at Alley River were largely higher, while the levels of nitrate and phosphates were generally higher at Milk River. This is probably related to the fact that although the Monymusk Factory is in close proximity to the Alley Bridge site, most of the cane production in the Monymusk SDA occurred on the western Milk River side of the SDA. The higher levels of nitrate and phosphates therefore could be related to the greater usage and hence run-off of fertilizers containing these compounds. A t-test however, conducted at the 95% confidence level to assess the significance in the difference in the levels of these five parameters at the two sites, showed that only the difference in TDS was significant. The findings of this study in relation to the six parameters (which spanned both periods), were consistent with NEPA’s own findings as per Rio Minho Watershed Quality Status for Marine and Fresh Water Bodies 2014, conducted under its National Water Quality Monitoring Programme. According to NEPA (2014a), using its own routine sampling and testing, as well as results reported by Clarendon Distillers Limited,

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the Alley Bridge location showed high levels of TDS, significantly above the trade effluent standard in the period 2011–2013. In terms of BOD, while the recorded levels in the 2011–2013 period were below the trade effluent standard, an increasing trend was observed. Based on NEPA’s report (2014a) though, nitrate and phosphate levels were below the trade effluent standard, though erratic, consistent with the findings of this research. Generally, it appears that the major parameter of concern is the TDS, which had not been meeting either the ambient nor trade effluent standards in both periods, and whose level was consistently higher in 2016/17 period, and with a greater level of fluctuation, as indicated by higher means and standard deviation, that is a mean of 13,327.33 mgl-1 in 2016/17 versus 2900.29 mgl-1 in 2008/10 and standard deviation of 10,160.16 mgl-1 versus 522.24 mgl-1 over the same period. According to NEPA (2014a, p. 6), the high levels of TDS relates to saline intrusion which “is known to occur in the Rio Minho”. While saline intrusion is a plausible explanation for the high levels of this parameter, these levels were stable in the 2008/10 period. Their even higher levels, and the episodic behaviour of this parameter in the 2016/17 period will be examined below, in tandem with the behaviour of such parameters as Na, K, Cl, salinity, and electrical conductivity to provide some commentary on the impact of the management of the factory on the levels of this indicator. TSS, nitrate, and phosphates in the 2016/17 period exceeded the trade effluent standard on occasions, but not in a sustained manner. According to NEPA (2014a, p. 6), with nitrate and phosphates concentrations at the Alley Bridge consistently below the trade effluent standard in the 2010/13 period, “there is no nutrient loading problem within the Rio Minho River.” What seems to be concerning, however, was the episodic behaviour of these parameters in the 2010/13 period, according NEPA (2014a, and the fact that in the 2016/17 period according to the tests results reported earlier, these indicators on occasion exceeded the standard. What is even more concerning, is the significant rise in the levels of TSS, nitrate, phosphates and TDS, and often above the trade effluent standard, at a time when cane and sugar production in the Monymusk SDA and by the Monymusk factory respectively, drastically declined. This speaks volumes to the environmental management of the factory since divestment.

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Performance of the Other Parameters at Alley Bridge As previously indicated, during the 2016/17 period, water quality tests carried out by NEPA and SIRI under this research, included additional parameters to the six—BOD, nitrates, phosphates, pH, TDS and TSS, routinely tested for by NEPA in its water quality monitoring programme. In contrast to the baseline period of 2008/10 therefore, NEPA and SIRI also tested for sodium, chlorides, potassium, COD, zinc, boron, iron, copper, manganese, salinity and electrical conductivity. It was essential to include these parameters, given the well-established phenomenon of saline intrusion in the eastern side of the Monymusk SDA, associated with massive over pumping of wells to support significant expansion of sugarcane production in the late 1950s into mid-1960s. As a result of saline intrusion, over 5000 hectares of cane lands have been abandoned since the 1970s. Heightened levels of these inorganic elements provide some evidence of saline intrusion. To the extent that these additional parameters were not tested in the baseline period, it was not possible to compare the levels of these parameters over the two periods. However, by comparing their levels at the Alley Bridge (the nearest sample site to where the Monymusk factory discharged its effluent in the Rio Minho River) to the Milk River site, which is furthest site west of the factory, one can obtain some insight as to the contribution or otherwise of the factory to the observed levels. It has already been established that there was a statistical significant difference between TDS levels in the 2008/10 baseline period and the 2016/17 period at the Alley Bridge site, as well as between levels at the Alley Bridge and Milk River sites. TDS can be regarded as a sort of composite parameter, as it reflects the concentration of organic and inorganic compounds/elements in the water. Concentration of sodium and chloride ions in water increases its salinity, and the greater concentration of these ions in water similarly increases its conductivity. It is not surprising therefore that TDS, chlorides, sodium, and electrical conductivity, had a similar pattern of variation over the period May 2016 to March 2017 (Fig. 8.12). It should also be noted that salinity and potassium also exhibited a similar pattern of variation. The lowest level of these parameters in October 2016, relates to the dilution effect of the unprecedented level of rainfall in that month associated with the impacts of Hurricane Matthew. The Meteorological Office of Jamaica confirmed that the rainfall of October 2016, exceeded the 30-year (1971–2000) mean rainfall of

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Fig. 8.12 EC, TDS, Na, and Cl levels at Alley Bridge, 2016–2017

235 mm. Not only did the levels of sodium, chlorides and TDS significantly exceed the trade effluent standards, and electrical conductivity and potassium exceeded the ambient water standards significantly; the level of these parameters at the 95% confidence interval, were significant different at the Alley Bridge site in comparison to the Milk River site. The variability in the levels of these parameters over the period of May 2016 to March 2017, and their significantly higher levels compared to the levels at Milk River site speak to the management of these parameters at the Monymusk factory over the period. In relation to the other parameters, COD exceeded the trade effluent standard a few times, with a peak in December 2016, while boron, zinc, manganese and iron levels were well within the ambient water standard. None of these parameters were deemed statistically significant in the difference of their levels between Alley Bridge and Milk River sites. Rio Minho River Longitudinal Comparisons Water samples were collected at eight points along the Rio Minho River, as well as at the Milk River, which is in the neighbouring watershed, for

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comparison. The Alley Bridge, which as stated before was the nearest point to which the factory discharged its effluent, lies in the middle of these nine collection points (see Chapter 7, Fig. 7.2). The level of each of the 17 parameters examined were depicted on bar charts, with each bar representing the level at each sample site, and error bars superimposed on each bar. Error bars were used to depict the variability as measured by the standard error. The level of overlap between error bars provides a commentary on the significance of the difference between the levels of the parameters at different locations. Where there is no overlap, it is an indication that the difference may be significant and not due to random variation associated with the sampling process. The behaviour of the 17 parameters from upstream to downstream in terms of their levels, provides an indication as to the source of pollution. See Fig. 8.13 in respect to manganese for example. Among the 17 parameters, the Monymusk Factory seemed to have been the point source of pollution in relation to phosphates, zinc and manganese, based on the spike in the levels of these parameters at Alley Bridge, compared to their levels upstream and downstream, and at Milk River. With respect to zinc, studies conducted in India have found that the long-term use of sugar industrial effluent, such as dunder for irrigation, may increase the concentration of heavy metals, including zinc in surface soils, which eventually wash into water channels (Suresh et al., 2015). It is instructive that the Monymusk Estate had been using treated dunder from the neighbouring Clarendon Distillers Limited, for years, for fertigation purposes. This may therefore explain the source of high levels of zinc at the Alley Bridge.

Fig. 8.13 Concentration of manganese at various sample points 2016–2017

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In terms of manganese, the absence of overlaps in the error bars between Alley Bridge and the other sampling sites, could be pointing to a possible significant difference between the level of manganese at that location and the other sites. T-test at the 95% confidence interval between the level of this parameter at Alley Bridge and Milk River for example, did not confirm statistical significance. The data with respect to the parameters of potassium, chloride, iron, copper, electrical conductivity, sodium, COD and boron show an interesting pattern of behaviour. Moving from Rocky Point, where the Rio Minho River empties into the Caribbean Sea, to upstream, the concentration/level of each of these parameters were highest at Rocky Point, gradually decreasing moving up stream. Chloride, sodium and electrical conductivity are associated with high salinity, and based on this pattern of behaviour of these parameters, it could be concluded that either saline intrusion and or tidal action was pushing sea water upstream. Interesting, saline intrusion seems not to have been an issue at Milk River, as the level of these parameters at that location was comparable with the levels upstream the Rio Minho River. The very high concentration of all of these elements at Rocky Point and the gradual decline moving upstream, was of course consistent with the behaviour of TDS. While high levels of chloride, salinity, sodium and electrical conductivity would be expected at Rocky Point, being a marine environment, characterized by salted water, it would seem that there were some localized anthropogenic factors at work in Rocky Point, accounting for the high concentrations of the heavy metals—copper and iron. Being a fishing beach, there is usually a significant level of human activities near this site, including commerce, repairs to vessels and nets, servicing and loading of vessels etc. In relation to BOD, the Monymusk factory/Clarendon Distillers Ltd. seems not to be a significant source, as the level of this indicator is relatively low compared to the other sample points. In fact, the levels are significantly higher in Milk River and Savannah Gully. The fact that the Clarendon Distillers Ltd. treats its dunder in ponds and subsequently uses it for fertigation may account for the relatively low levels of BOD at Alley Bridge. All in all, the Monymusk factory seem to be a significant source of pollution in relation to phosphate, zinc, and manganese, and to a lesser extent, nitrates, and these impacts seemed to be localized. The issue of greater concern is the seeming tidal action and saline intrusion pushing

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salt water upstream the Rio Minho from Rocky Point. Given the incidence of tidal action/saline intrusion, further investigation needs to be done to ascertain how the concentrated levels of a number of parameters are affecting aquatic life in the Rio Minho, and what has been the impact on biodiversity. If this trend is sustained, is there an issue of heavy metal poisoning of fishes in the river? This could have an impact on food security and livelihoods for those who depend on the river for survival.

The Case Study Report---Community’s Perspective on Privatization Purpose of the Case Study The two impact assessments described above were focused on the grant beneficiaries and direct residents of the sugar estates. These two populations have been characterized quantitatively and the impact of the JCS implementation on them measured. However, the quantitative indicators are necessary, but not sufficient to describe the reach and depth of the JCS impact. How had the JCS impacted the wider SDA beyond the direct grant beneficiaries and the estate residents? The level of dependence of SDAs on the estates for instance, cannot be measured solely by the number of residents who lived or worked on the estates, or who depended on the estates for utilities and other social services. The dependency on the estates transcends the immediate stakeholders, with school attendance, the viability of local businesses, the vibrancy of the transport sector, etc., being closely linked to the fortunes of the estates. Also, how has the implementation of the JCS affected the physical environment and people’s health? What were the negative environmental impacts and how were these affecting livelihoods? It was therefore necessary to go into the wider Monymusk SDA and interact with groups of stakeholders beyond residents of estate housing and estate workers and cane farmers to get a more in-depth insight of how the JCS and post divestment developments in the sugar industry were affecting ordinary people, businesses, and the way of life of the wider communities. Profile of the Monymusk SDA The Ministry of Agriculture and Fisheries in its Sugar Area Development Programme Social Infrastructure Projects Manual defines a SDA as

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“those geographic areas which shared long-term dependent relationship with the sugar estates and whose economies are directly influenced by the latter” (Ministry of Agriculture & Fisheries, 2011, 164). Based on this definition, the Monymusk SDA would basically comprise the communities of the Vere Plains in Southern Clarendon. The SDC has divided the communities of the Vere Plains in two development areas (DAs)—Lionel Town and Milk River. These two DAs comprise some 13 communities— Lionel Town, Alley, Hayes, Mitchell Town, Portland Cottage, Salt River, Rocky Point, Halse Hall, Gravel Hill, Longwood, Milk River, Gimmeme-bit, and Race Course. These 13 communities in turn comprise some 80 districts. These two DAs essentially constitute the Monymusk SDA. At the heart of the Monymusk SDA is the Monymusk Sugar Factory, situated near Lionel Town in South Clarendon. According to the David Crossbourne in his 2015 book “Journey of the Jamaica Sugar Cane Industry 1494–2012”, the Monymusk Sugar Factory started operations over 300 years ago. Crossbourne (2015, p. 75) asserted that “Monymusk Sugar Factory entered the twentieth century with over two hundred years of operational experience in sugar and rum production.” The SDC in its 2014 “Development Profile for the Lionel Town Development Area” indicated that in 1901 the factory was owned and operated by one Colonel C.J. Ward (Social Development Commission, 2014a, 22). There was a series of changes in ownership between 1916 and 1937, when the West Indies Sugar Company (WISCo), a subsidiary of Tate and Lyle in the UK, assumed ownership. WISCo was to operate the Monymusk factory until it was assumed by the Government in 1976 under the state owned National Sugar Company. The series of changes in ownership between 1916 and 1937 are basically corroborated by Crossbourne (2015). Recall that the Monymusk Estate was owned by private interests up to 1971, when Booker/Tate sold the cane lands to the Government but retained the factory. The cane lands were then leased to the cane farmers’ cooperative up to 1981, while the Government through the National Sugar Company took over the factory. The entire estate was then privatized in 1994, with Government resuming control in 1998. The Government retained ownership and management until the most recent divestment to the Pan Caribbean Sugar Company (PCSC), in 2010. According to data obtained from the SCJ Holdings Limited, the Monymusk Estate now owned by PCSC currently comprise 18,895.09 hectares, which in fact makes it the largest sugar estate in Jamaica in terms of land. The SDC’s Development Area Profiles for Lionel Town

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and Milk River estimate the population of the Monymusk SDA to be 45,785 people, of which approximately 52% are females (SDC, 2014a, b). There are some 11,235 dwellings, equating to approximately 4.1 persons per household (SDC, 2014a, b). Most of the Monymusk SDA, including the factory, lies in the Portland Bight Protected Area. Both the Lionel Town and the Milk River Development Area Profiles identify the sugar industry as the major economic activity in this area. According to the SDC (2014a, p. 52), “within the Lionel Town DA, there are several industries from which the residents earn a decent living including the manufacturing, fishing, and bauxite industries. However, the bread and butter of the majority is enrooted in the sugar industry.” Similarly, the SDC publication (2014b, p. 15), asserted that the “Milk River DA falls within the ‘sugar cane belt’ of Clarendon.” Table 8.3 provides critical social indicators for these two DAs. Essentially the profile of the Monymusk SDA is one characterized by a high level of unemployment (42.3% in the Lionel Town DA and 52% in the Milk River DA) and low levels of educational attainment (only 51.6% of household heads attained secondary education in Lionel Town DA Table 8.3 Social indicators for Lionel Town and Milk River Development Areas Indicators

Lionel Town DA

Milk River DA

National average

Average size of Household (persons) Unemployment (%) Household heads with highest level of education (%) Primary All Age Secondary Tertiary Ownership of land on which dwelling is situated (%) Water supply and sanitation coverage (%) Piped water in dwelling Access from standpipes Use of pit latrines

4.08

4.04

3.1

42.3

52

13.7

25.3 8.5 51.6 4.3 48

31 22 38 4 54.7

N/A N/A N/A N/A 60.2

34 24 41.2

42.7 3.4 53.6

70 6.2 26

Sources SDC Profiles of Development Areas 2014, Jamaica Survey of Living Conditions 2012 and Statistical Institute of Jamaica 2016

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and 38% in the Milk River DA). In respect to land tenure, in both DAs the percentage of households owning the land they lived on in 2014 was below the national average of 60.2%, with the figures for the Lionel Town and Milk River DAs being 48 and 54.7% respectively (Planning Institute of Jamaica, 2012). This is clearly related to the predominance of sugar cane growing in the area by the Monymusk Estate, which owns most of the lands in Vere, Clarendon. Piped water and sanitation coverage were also lower than the national average in both DAs. In the Lionel Town DA, 34% of households had piped water access in their dwellings/yards, with 24% accessing water from stand pipes, compared to the national average of 6.2% of households accessing water from stand pipes. For the Milk River DA, only 42.7% had piped water in their dwellings. Both DAs depended heavily on pit latrines, that is, 41.2% in the Lionel Town DA and 53.6% in the Milk River DA, compared to the national average of 26%. Methodology In total, fifty (50) persons in five (5) focus group sessions were interviewed; each comprising ten (10) participants. The interviews were conducted over a one-month period and all the participants were chosen from communities situated on the Vere Plain and that are deemed highly sugar-dependent such as Lionel Town, Gibb Town, Kemps Hill, Mitchell Town, Alley, Gayle, Water Lane, Salt River, Rocky Point, and Hayes. Given constraints largely related to time, distance, and accessibility of participants, a focus group was pre-determined to be the best-suited instrument for allowing researcher to garner, in a relatively short period of time, multiple perspectives simultaneously through a free-flowing dialectic exchange among participants. Additionally, a focus group is useful for uncovering information, which cannot be adequately captured in most other data collection methods, about individuals’ values, attitudes, and deep feelings in relation to a particular phenomenon. The purposive sampling technique was used to determine the participants based on the intention to capture the emotional responses of individuals who resided in the vicinity of the Monymusk Estate and who have all been connected to the Estate to varying degrees. To ensure that the sample size used was fairly representative, the participants were chosen from five demographic/socio- economic segments of communities that are both significantly dependent on and located close to the Monymusk Estate (Table 8.4).

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Table 8.4 Focus groups composition Focus group

Composition

Description

1

Former employees and residents who live in communities close to the Monymusk Estate

2

Teachers

3

Vendors/small business operators

4

Farmers

5

Wives and spouses of former and current estate employees

Mixed group (equal distribution of male and female). All have been affected by the estate directly or indirectly Mixed group comprising teachers from at least three basic and primary schools in targeted communities Mixed group comprising higglers, operators of corner shops and cookshops, persons who sell clothing and household items and other self-employed residents Mixed group of small-scale farmers; some of whom have been dislocated as a result of the recent divestment of the MME; others who took farming after losing their jobs at the MME and others whose livelihoods have been lifelong farmers Group comprised housewives, parents and breadwinners whose households have been directly impacted by the divestment of the MME

Findings and Analysis Monymusk Estate—the Centre of the Monymusk SDA In response to the questions: “which sugar estate were you connected with?” and “how and in what ways were you connected to this estate?”, there was an almost universal connection to the estate, save and except for the grouping of teachers, where only one respondent indicated an indirect connection with Monymusk Estate. Not only were the connections almost universal, but they were also deep. Most respondents would have either worked at Monymusk Estate or had spouses, relatives, and family members working or have worked there. In fact, one particular respondent indicated that his family’s connection with the estate spanned over five generations. Throughout the focus group discussions, the theme of the Monymusk Estate being the mainstay of the economy of the Vere

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Plains in Clarendon was both dominant and recurring. The Monymusk Estate was identified as the main source of employment in the Vere area, and for those who worked there, it was the only source of income for the family. Many of the respondents would have worked on the estate as field workers, cane cutters, boiler operators, irrigators, welders, fertilizing fields, field managers, electrical engineers, payroll clerks, and watermen. The ties to the Estate for the Monymusk SDA, however, transcend direct employment. The Estate was identified as playing a major role in the life of the wider community, through the provision of critical social services. These services include the operation of the Monymusk prep school and subsidizing its students’ school fees, supporting other schools in the SDA, maintaining sporting facilities, operating a sports club, providing trucked water to communities, operating a clinic, supporting workers in bereavement, and operating a credit scheme. Beyond the provision of social services to the communities, the respondents recognized and confirmed the significant multiplier impact of the operation of the estate. Employment with the estate provided the purchasing power to support businesses in the communities such as supermarkets, shops, food vendors, fisher folks, farmers, and other purveyors of goods and services. Fortnightly pay day would have coincided with a heightened level of business activities in the towns, especially Lionel Town. This multiplier effect is seen not only in business and commercial activities, but also enabled those employed, as well as others to support entertainment events, school events, and school attendance. Socio-Economic Impact of the Privatization of the Monymusk Estate on the SDA As part of the JCS and in pursuit of the objective of creating an “economically viable private sector led sugar industry”, the Monymusk Estate was divested by the Government of Jamaica in August 2010 to the Chinese company COMPLANT International Sugar Company. COMPLANT, however, requested the SCJ Holdings Limited, which was operating the estate, to continue the operation of the estate on its behalf, until it assumed operation in August 2011, under the trading name Pan Caribbean Sugar Company (PCSC). There was an overwhelming consensus among all respondents across all five focus groups that the social and economic conditions in the Monymusk SDA had gotten worse as a result of the divestment.

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In the first instance, the divestment was accompanied by loss of jobs, as the PCSC retained fewer workers than the SCJ Holdings employed during its year of operating the estate. The respondents also contended that the PCSC used a significant number of Chinese workers compared to locals. It was further asserted that the PCSS paid locals working on the Estate less than their Chinese counterpart. This, however, had not been independently verified, and appears unlikely, as the unions would have no doubt mounted a challenge to this. It was also pointed out by the respondents that the PCSC terminated the outsourcing of such auxiliary services as tractor and transport and began to provide those services themselves. This effectively rendered the previous providers of these services from the community unemployed. An examination of the Sale and Purchase Agreement signed between the Government and the COMPLANT reveals liberal provisions for the suspension of import duties on a very wide range of production inputs and machinery, thus providing a significant incentive for the PCSC to import tractors and trucks to provide these services for themselves. The owners of the other sugar estates in Jamaica have frequently and publicly complained of this unfair advantage afforded the Chinese by the Government and have called for a levelling of the playing field. The long-standing practice of residents grazing livestock on estate lands was significantly curtailed by the Chinese by cutting off access to its leased lands by residents, and vigorously enforced this prohibition. This had the impact of even further destabilizing the income of community members. The net economic impact of reduced direct employment with the Estate, reduced outsourcing of auxiliary services to community members, and reduced independent farming by community members because of restricted access to estate lands, significantly eroded the purchasing power of community members. This had a negative impact on business and commerce in the SDA, including supermarkets, shops, bars, farming enterprises, fishing, cook shops, etc. Many respondents pointed to a downturn in their businesses, inability to replenish stocks, slow sales, closure of shops and bars, and the exit of the National Commercial Bank and the Republican Bank of Trinidad and Tobago from Lionel Town. On the social side, the withdrawal by the PCSC of social services previously provided by the Estate, has been a major blow to the Monymusk SDA. Perhaps the greatest impact has been on the education

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system. The withdrawal of subsidy from children attending the Monymusk Prep School resulted in many of these pupils being transferred to nearby government owned primary schools. The general economic malaise caused by loss of jobs associated with divestment has seen school attendance being significantly impacted. Early childhood institutions (basic schools), run by community and church groups, where parents had to pay school fees, had been most impacted. Teachers pointed to reduced attendance and increased incidence of children coming to school without lunch and bus fare, and parents unable to pay school fees. At the primary level, the teachers indicated that schools have been forced to expand their breakfast programmes. The social impact has also been evident in reduced numbers of entertainment events in the communities, reduced support for sports, and a marked rise in criminal activities, notably praedial larceny. The issue of increased incidence of praedial larceny was a recurring theme in the focus group discussions. This phenomenon was presented as both the impact of loss of employment and the general economic stagnation in the Monymusk SDA, as well as a deterrent to those who wanted to engage in and or expand their farming activities to help themselves. The PCSC also often complained of theft of their equipment, fertilizer, oil, etc. The respondents, however, indicated that the increased levels of theft on the Estate was due to the fact that locals were no longer protective of estate’s property as before, since they no longer feel they had a stake. It is interesting that no less a person than the Commissioner of Police, Dr. Carl Williams, in a speech to business leaders, carried in The Gleaner newspaper of September 29, 2016, made an association between the spike in criminal activities in Clarendon and Westmoreland to the decline in sugar. In that speech, the Commissioner said: … we have seen in St. James, in Westmoreland, in Clarendon the decline of sugar. Particularly in Westmoreland and Clarendon, which were once the sugar belt, sugar is on the decline and crime is on the rise. There has to be some correlation there. We have also seen where the lottery scam has come to replace some of the decreasing income.

In addition to crime, at least one respondent pointed to her husband taking on drinking, since he lost his job. The impact of the privatization on the Monymusk SDA has been made that much more acute by the significant level of dependence of the entire

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SDA on the Estate. In fact, one respondent has so tied the fortunes of the Monymusk SDA with that of the Estate, so as to lament that the Chinese “mash up the whole system”. The picture of this economic decline of the SDA has largely been corroborated by the SDC Development Area Profile referred to earlier. The dramatic impact of the divestment and consequent loss of jobs underline the lack of economic diversification in the SDA and the inability of residents to engage in other economic activities due to limited skills and the lack of capacity to be trained. The SADP was meant to address these realities with appropriate interventions to train people, create other economic opportunities and ensure continued access to social services, previously provided by the estates. Obviously, the SADP had not achieved that objective. Any objective assessment of this dependency would concede that it would have been unreasonable for PCSC, which acquired the Estate to make profits in the first place, to be expected to carry such a heavy social burden of supporting these communities to the extent that the Government supported them when it operated the estates. In fact, even under public ownership, no economic enterprise should have been made to carry such a social burden. The situation before divestment represents the failure of successive governments to fulfil the legitimate expectations of the residents for critical social services. That the situation worsened after divestment is as much a failure of privatization, as it was a failure of government sponsored programmes under the JCS to satisfy the SDA’s basic socio-economic needs. This reality further lays bare the fallacy of the neoliberal assumption of the Government that the so-called benefits of privatization would trickle down to the people of the SDA. Awareness of SADP Interventions It is reasonable to assume that the rationale for the Government to include as one of the objectives of the JCS, the addressing of social, economic and environmental issues in the SDAs, was an acknowledgement of the high level of dependence of the SDAs on the sugar estates. The interventions of the SADP were designed to break that dependency, create more resilient communities, diversify the local economy and equip residents with the skills, financial resources, and other enablement to engage in other economic activities. Table 8.1 outlines the gamut of interventions and the significant quantities of monies expended. What has been the impact? What was the level of awareness of these programmes?

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On being questioned about awareness of the SADP, the overwhelming majority of the respondents claimed total unfamiliarity with the SADP. This was the case across all the five focus groups. On prompting and explanation by the moderator of the discussions, a few conceded to hearing about the SADP. It is significant, however, that almost all the respondents who conceded hearing of the SADP, associated it solely with the grants programme. This is consistent with the responses in the survey of grant recipients, who knew very little of the other elements of the SADP. As Table 8.1 shows, some $2.238 billion in total was expended in the Monymusk SDA, covering skills training, rehabilitation of cane roads, construction of 88 houses in Springfield, 230 cane farmers obtaining highly subsidized loans, two agro parks established consisting of nearly 2000 acres, as well, as over 24 small projects with a value of $322 million. Without a doubt, the SADP was the largest both in terms of scope and intensity, social programme ever to be implemented in the Monymusk SDA. That so few people knew of these initiatives or connect them to the Sugar Transformation Programme, is a major cause for reflection in the future design of social programmes. There is no doubt that the physical infrastructure programmes such as housing, schools upgrade, sporting facilities upgrade, roads, and clinic/hospital upgrade would benefit a wide cross section of the people who will use them, regardless of whether they make the connection of these facilities with the SADP. However, the initiatives that could have had a more direct, personal, and life changing impact on people’s wellbeing and livelihood, seem not to be as effective. These initiatives include the skills training and the agro parks. The survey of grant recipients across all SDAs reveal that only 3% of the respondents accessed the training and grant beneficiaries and estate residents were not participants in the agro parks. In fact, in the Ebony Park and Spring Plain agro parks in 2016, most of the participants were from outside of Monymusk SDA, predominantly professionals from Kingston, for whom the engagement with the agro parks was a secondary endeavour. This reality ought to have some implication for the future design and implementation of such programmes. Given the above realities, it is not surprising that most of the participants in the case study regarded even the grants as insufficient, as it did not improve their well-being in the long-run. This is not unexpected, as based on the survey of grant recipients, 91% of the recipients opted

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for cash, as against equipment or other inputs for businesses. The respondents, therefore, concluded that the grants were unsustainable, and hence did not improve their lives in any meaningful way. In fact, they insisted that their lives were worse off compared to pre-privatization. Perspectives on Privatization As previously noted, the Monymusk Estate was divested to PCSC in August 2010, with the company effectively assuming operational control in August 2011. PCSC from day one only retained a percentage of the complement of workers used by the SCJ Holdings Limited to operate the estate between 2010 and 2011. From the very commencement of operations, the relations between PCSC’s management and the workers were rocky and at times acrimonious. The unemployment situation was aggravated by PCSC pursuing a business model in which they undertook themselves a number of auxiliary functions, such as tractor and transport, facilitated by the generous provisions of the Sale and Purchase Agreement, under which the Government allowed them to import a long list of production inputs and machinery duty free. This effectively rendered the previous providers of these services from the community unemployed. PCSC also took an aggressive posture in relation to the use of their leased lands by residents who grazed their cattle and goats on the vast acreages of unoccupied lands. It should be noted that although the Monymusk Estate comprises over 18,000 hectares, less than 3000 hectares were in effective cane production in 2016. The under-utilization of these leased lands must be viewed against the modest lease payment of US$35 per hectare per annum in COMPLANT’s Sale and Purchase Agreement with the Government and their commitment to rehabilitate the cane fields they inherited over 3 years, and even to acquire more lands for cane production. The SCJ Holdings Limited, the agency of the State responsible for monitoring post divestment activities in the sugar industry, confirmed that Pan Caribbean invested over US$200 million in factory upgrade and in building two new cogeneration plants at Monymusk and Frome. PCSC had not, however, distinguished themselves in field operations, with glaring evidence of neglect of a number of their fields—not fertilized, inadequately irrigated and overrun with weeds. By September 2015, the Pan Caribbean officials indicated to the Government that due to high operational costs, theft, and low cane supply, all culminating in continuing financial losses and compounded

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by low export prices in the 2015/2016 crop, they would be suspending operations of the Monymusk Estate for the 2016/2017 crop. It is interesting to note that although PCSC pointed to low cane supply as a reason for their financial losses and hence their decision to suspend operations, between 2011 and 2015, independent farmers’ supply of cane to the Monymusk Factory increased from 69,431 tonnes to 167,842 tonnes, while Pan Caribbean’s own cane production declined from 219,892 tonnes to 85,569 tonnes over the same period. Again, this dismal performance with respect to cane production must be viewed against commitments given to increase both cane and sugar production. In relation to low export prices for sugar, this was also due to decisions taken by Pan Caribbean’s management. Having assumed operational control over its 3 factories in 2011, Pan Caribbean it withdrew from the Jamaica Cane Product Sales (JCPS) Limited, when it obtained its own agency agreement from the Sugar Industry Authority in May 2012. At that point, JCPS had secured from 2011 a 4 year contract to export on behalf of all the factories, Jamaican sugar, to Tate and Lyle of the UK, at the best prices for prevailing in the entire ACP for sugar exports. By withdrawing from JCPS, Pan Caribbean opted to market their own sugar, supposing they could have obtained better prices. This did not materialize, resulting in lower revenues to PCSC. Additionally, PCSC was forced to pay their independent cane suppliers at the same rate which obtained in the rest of the industry. Having taken the decision to suspend operations, in February 2016 Pan Caribbean laid off all their field workers and on June 22, 2016 they made the factory workers redundant. In response, the Government was forced to assume operations of the Monymusk Estate for the 2016/2017 crop year. The residents of the Monymusk SDA were acutely aware of all the above developments, as borne out in the focus group discussions. All the participants were not only keenly aware that their fortunes were inextricably linked to that of the Monymusk Estate but were closely following developments on the Estate. Many times, in the discussions, participants alluded to the declining production at the Monymusk Estate and proffered suggestions as to the cause of the decline. The farmers’ group for instance, was specific in their diagnosis, pointing to the fact that PCSC did not understand sugar cultivation practices, evidenced by the lack of irrigation and the fields being allowed to be overrun with ‘oil nut’ plants. Based on this neglect of the fields, some respondents concluded that PCSC was

8

Table 8.5 Production of sugar and cane milled, Monymusk Estate, 2010–2016

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Year

Cane milled, tonnes

Sugar produced, tonnes

2010 2011 2012 2013 2014 2015 2016

237,206 313,607 297,314 221,017 270,177 253,415 242,165

17,004 28,668 26,329 18,501 23,091 19,175 16,985

Compiled from data from Sugar Industry Authority

not interested in sugar and cane growing. The participants’ observation of the decline in production is confirmed by the production figures in Table 8.5. The PCSC had not surpassed the production of 28,668 tonnes of sugar produced in 2011, before SCJ Holdings handed over operations to PCSC. There had been a general decline in both cane and sugar production since the divestment, with a record low production of 16, 985 tonnes in 2016, in a factory with the capacity of over 80,000 tonnes. Significantly also, PCSC did not realize their commitment in the Sale and Purchase Agreement to produce refined sugar and ethanol, which would have required a substantial expansion in cane production. The respondents further pointed to PCSC’s lack of effort to be integrated into the wider community and that their generally poor treatment of workers did not engender any sense of loyalty on the part of workers and the wider community. The participants also felt that the PCSC was distrustful of workers. As a result of this lack of harmonious relationship between workers and citizens of the Monymusk SDA on the one hand, and Chinese management on the other hand, locals felt that they didn’t have a stake in that great enterprise. Overall, the residents viewed the privatization as a failure evidenced by the widespread loss of employment, reduced production of sugar at the Monymusk Factory, with consequential reduction in business activities in the locale, contributing to all kinds of social ills in the Vere area. They therefore asserted that the Chinese “mash up the whole system” and “wreck” Vere. The residents equally blamed the Government for the divestment debacle, citing lack of consultations with the citizens of Vere before privatization. The Government clearly was powerless in holding

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the PCSC to their commitment in the Sales and Purchase Agreement, as while there were targets for investment and production, there was no mechanism for sanctions in the Agreement. The management of PCSC and their poor production and financial results again raise the issue as to whether privatization has or can improve economic results in the sugar industry or raise standards of living. It will be recalled, that in the JCS, divestment was identified as Government’s principal strategy to turn around the economic fortunes of the ailing sugar industry. This had, however, proven to be an abject failure, not unlike Government’s previous attempt at privatization in 1994, and the failed experiment with cooperatives in the 1970s. The dismal performance of the PCSC and their almost abandonment of Monymusk when they handed back the estate to Government for temporary operation in 2016 also bring into focus concerns raised by Springett and Redclift (2015) and Sage (2015) in relation to “land grabbing” in the South by China and some Gulf states. With over 18,000 hectares of flat, mechanizable, fertile lands in the Monymusk/Bernard Lodge area, the PCSC was effectively in control of the best agricultural lands in the country, obtained at some very low lease rates. According to Ministry Paper 20/12 (2012), while COMPLANT was paying US$35 per hectare for what is regarded as the most fertile lands in Jamaica, the Seprod Group and Everglades Farm Limited were paying US$53 and US$40 per hectare per annum. Their mismanagement of said lands was a threat to the nation’s food security. Health and Environmental Impact Although most of the respondents did not indicate experiencing any health issue as a result of the activities of the Estate (save and except the grandson of one respondent having respiratory problems attributed to smog emitted from the factory), most of them pointed to a range of environmental impacts. They indicated that there were increased complaints from some residents whose livelihoods were being negatively impacted by discharge of dunder in the Rio Minho River. The pollution of the Rio Minho River by dunder discharge has been deteriorating water quality, causing fish kills, and preventing residents from partaking in such recreational activities as swimming. They also complained about a foul odour from the factory and a horrible and sometimes unbearable stench of the dunder.

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The participants also pointed to the impact of cane burning for harvesting on the general health of the community, manifesting in eye irritation and respiratory difficulties. Cane burning, they asserted generate a thick smog, engulfing the community and causing residents to lock themselves indoors, as well as preventing them from hanging clothes on outdoor lines. They also identified the potential hazard of overloaded trucks transporting cane to the factory, which could topple, damaging lives and property. The residents were, however, objective in admitting that many of these environmental hazards preceded the privatization. Notwithstanding, based on the JCS, the overall environmental situation was expected to improve. Perspective on the Future Notwithstanding the debacle of the privatization process and its negative socio-economic and environmental impact, there was a general consensus among participants in the focus group discussions that the Monymusk Estate should remain open, but under better management. This insistence by the residents is born of their acknowledgement of the deep-rooted connection between the sugar industry and the socio-economic life of the entire Monymusk SDA. The residents accept that the dominance of sugar in their local economy, the lack of economic diversification, and the low levels of skills and education in the SDA, as well as the unemployability of many citizens in other industries outside of sugar, made it imperative for the sugar industry to remain in Vere. Citing the need for better management, implying that the PCSC’s management was ineffective, a number of residents called for the Government to retake control of the Estate. The residents put forward suggestions for better management, including the Government consulting and involving experienced former sugar cultivation experts in the future management of the enterprise. They also advocated for more skills training to usher people into new ventures and enterprises. Significantly, the citizens were calling for an arrangement in which some of the estate lands be made available to small farmers to carry out among other things cattle and goat rearing. The plea by community members for the Government to resume control of the management of the Estate must be viewed against the background of developments in 2016, when the PCSC literally ceased all field operations and laid off the field workers in February 2016. By June 2016, all factory workers were made redundant, a clear signal to the community

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that PCSC was serious about terminating operations for the 2016/2017 crop year. This would not only have affected the workers, who would have faced their second redundancy in five years, but independent cane farmers who would have had nowhere to sell their cane, and further killed all kinds of commerce and business activities in the Monymusk SDA, with devastating social impacts. It would seem that the thinking of the citizens and the Government converged, as on June 7, 2016, the Hon. Karl Samuda, the Minister of Industry, Commerce, Agriculture and Fisheries announced in his presentation in the Sectoral Debate in the House of Parliament, that the Government would be operating the Monymusk Estate for the 2016/2017 crop year. Samuda (2016, 7), explained the rationale of the Government in taking this extraordinary step to ensure “the preservation of jobs and the livelihood of independent farmers, as well as the local economy of southern Clarendon”. Samuda (2016, p. 7) went on to underline the deep-rooted dependency of the communities on the Monymusk Estate: “the reality is that, as struggling as the sugar industry is, we have not yet nor will we in the near future find any economic activity, of the scale of the sugar industry to sustain life in the southern Clarendon belt.” While this gave the Monymusk SDA a temporary reprieve, the longterm sustainability of the Monymusk Estate remained a major concern for the SDA. Conclusion of the Case Study The case study clearly confirms the centrality of the Monymusk Estate to the socio-economic life of the entire Vere Plains. The residents of the Monymusk SDA were keenly aware of this high level of dependence on the estate. The privatization of the Monymusk Estate in 2010, and the subsequent handing over of the operations to Chinese company Pan Caribbean in 2011, marked the beginning of an almost continuous decline in the production of sugar, accompanied by layoffs and redundancies. The PCSC had not exerted sufficient effort to build a relationship with the communities and withdrew support to the community, through terminating social services, previously provided by the Estate. Additionally, the new owners terminated the outsourcing of auxiliary services, resulting in the further reduction of employment in the SDA. There was also a curtailment of access by the communities to estate lands to graze their livestock.

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While the Chinese as private investors could not have been expected to continue to carry the social burden of the SDA, beyond what reasonably accords with corporate social responsibility, and while they were entitled to enforce property rights and terminate outsourcing of auxiliary services, the sudden withdrawal of these facilities was bound to have had a devastating blow on the communities. The Government should have known this before divestment, and hence more closely align and tailor their interventions to meet the pressing socio-economic needs of the SDA. The poor record of the PCSC management of the estate manifested in declining production, near neglect of cane fields and lack of integration with the SDA, dealt a severe blow to the SDA in terms of increased unemployment, a sharp reduction in commerce and business activities, occasioned by reduced purchasing power. Additionally, school attendance was negatively impacted and there has been a rise in criminal activities, especially praedial larceny. The net impact of these developments was the deterioration of the quality of life of the SDA residents. In this regard, the principal objective of the JCS to create an economically viable private sector led sugar industry, had not been achieved in the Monymusk SDA. Despite significant expenditure in the SDA in the form of grants, rehabilitation of cane roads, installation of critical infrastructure, continued provision of social services and training, the people’s quality of life did not change in any profound way. These resources did not transform the lives of the residents in terms of channelling people into alternative livelihoods that would support them in a sustainable way. The Government, therefore, has to revisit how programmes of this nature are designed and executed in the future.

Conclusion Although the Government was quick to promulgate the JCS, the twin objectives of privatization to maintain the viability of the industry, and social and environmental transformation of sugar dependent areas were not pursued in the initial stages of implementation of the Strategy with equal vigour and intensity. The divestment of Government’s six estates, comprising 70% of the industry was clearly the priority. Not only were the privatization targets clearly defined in the JCS, but preparation for divestment commenced from 2005, even before the establishment of

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the Sugar Transformation Unit in the Ministry of Agriculture. Notwithstanding the early start of the divestment process, it was fraught with delays and missteps, rendering the process protracted. The Government however, driven by the desire to off load a loss making and inefficient enterprize, remained focussed it its divestment drive, with all six factories divested by July 2010 after three rounds of divestment. The programme for social transformation of SDAs commenced in earnest in early 2009, following the development of the Sugar Area Development Programme in 2008. Under this programme, the Government expended over $9.3 billion in all the SDAs in Jamaica, including over $2.2B in the Monymusk SDA in grants to vulnerable redundant workers, housing development, cane road expansion, development of Agro Parks, skills training, rehabilitation of sporting facilities, loans for cane expansion and a variety of small infrastructure programmes. The SADP represented the most extensive in terms of scope and intensive in terms of the period of implementation, socio-economic programme ever implemented in the Monymusk SDA. The evidence from the survey of grant recipients and of the residents of the Monymusk Estates, as well as the case study of the wider Monymusk SDA indicate that SDA residents did not perceive their quality of life as having been improved. The survey of grant recipients and residents of the estates further indicates that despite their quality of life having worsened, they were nonetheless able to meet their basic needs, take care of themselves, as well as their families. They conceded, however, that the grants, for those who were recipients, assisted them, particularly those who received animals and feeds. The grants had not enhanced their earning capacity in a sustainable manner. This is related to the fact that some 91% of grants were disbursed in the form of periodic cash payments over a period of 12 months. The initiatives of the SADP, which were intended to achieve economic diversification, improved social resilience and environmental sustainability of SDAs, did not in the main meet this objective. Although there is evidence of huge expenditure, most residents were not aware of the SADP interventions. Further, the initiatives themselves, though beneficial, did not strike at the heart of the people’s greatest need, that is, to be empowered and enabled to migrate into more sustainable livelihoods. In fact, those initiatives which could have achieved this objective, that is, the agro

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parks and the skills training, were not accessible to the ordinary citizens of the SDAs. This failure to create new employment opportunities, coupled with declining sugar production post divestment and layoffs and redundancies from the sugar estates, resulted in unemployment in the SDAs higher than the national level and worse than before privatization. This not only speaks to the failure of the privatization exercise to effect social and economic transformation, but of the very interventions of the State, which were intended to mitigate the impact of divestment. The most enduring contribution of the SADP appears to be the provision of housing solutions, enabling 75% of estate residents owning their own land/house, with better access to potable water and sanitation, than obtained before the divestment, and above the national average. Aligned to this was the significant development of nearly 50% of former residents of the estates moving from the estates to independent living. This seems to be the major evidence of some sort of a break in the dependence on the estates, doubtless aided by the provision of housing solutions by the SADP. Among grant recipients also, land tenure indicators were also above the national average. Given the extremely high level of dependence of SDAs on the sugar estates, both in social and economic terms, it seems the likelihood of improving the quality of life of SDA residents must be tied, in the first place, to a robust and economically sustainable sugar industry. To the extent that this has not been achieved through the divestment of the Monymusk Estate, then it is not surprising that the SDAs were experiencing economic stagnation. Economic transformation in the areas can only be achieved by making the estates viable and by implementing a targeted programme of economic diversification, perhaps even with affirmative action in favour of the most vulnerable in these communities. On the environmental side, privatization did not result in better management of the environment by the new owners of the factory. This was evidenced by their failure to comply with relevant regulatory requirements, and the higher levels and variability of certain parameters of water quality, compared with the pre-divestment period, and attributable to the management of the Monymusk Factory. This worsening situation occurred even whilst cane and sugar production dramatically declined. The promised environmental benefit of cogeneration and ethanol production were also not realized, due partially by inaction on the part of

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the Government. The issue of saline intrusion in the Monymusk SDA, though not a direct impact of the activities of the factory in the postdivestment period requires urgent investigation and attention, given its potential impact on biodiversity in the Rio Minho River, livelihoods and food security. The failure of the privatization in turn speaks to deficiencies in the divestment process itself. The whole process seemed to have been driven almost exclusively by a desperation to relieve the national budget of the $35.5 billion debt burden of the Government owned Estates, without sufficient safeguards and legal provisions to hold the new entities to performance. Apart from clearly articulating production goals, a cohesive set of policies to encourage the diversification of the product base of the industry was not formulated. The fiscal incentives required for the take-off of cogeneration and ethanol production remain non-existent. Articulating an E-10 mandate and an Energy Policy which favours alternative energy was necessary, but not sufficient. Finally, the Government’s tacit reliance on the fallacious neoliberal trickle down policy of private sector led growth to stimulate employment and social development was an abject failure.

References Crossbourne, D. J. (2015). Journey of the Jamaica sugar cane industry 1494– 2012. David J Crossbourne. European Union Delegation in Jamaica. (2009). Strategic environmental assessment (SEA) of the implementation of the multi-annual adaptation strategy 2006–2015 of Jamaica. Kingston. Ministry of Agriculture and Fisheries. (2011). Sugar area development programme social infrastructure projects manual. Ministry of Agriculture and Fisheries. Ministry of Agriculture and Fisheries. (2012). Report on the sugar divestment exercise of the Government of Jamaica (Ministry Paper 20/12: Ministry of Agriculture and Fisheries). National Environmental and Planning Agency. (1995). Jamaica national trade effluent standards. Kingston. National Environmental and Planning Agency. (2014a). Rio Minho watershed quality status for marine and fresh water basins. Kingston. National Environmental and Planning Agency. (2014b). Sugar company environmental compliance audit update. Kingston. National Environmental Planning Agency. (2016). Compliance audit report. Kingston

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Planning Institute of Jamaica. (2012). Jamaica survey of living conditions. Planning Institute of Jamaica and the Statistical Institute of Jamaica. Samuda, K. (2016). Growth through production. In The sectoral debate at the House of Parliament. Kingston. Social Development Commission. (2014a). Development area profile Lionel Town, Clarendon. Clarendon. Social Development Commission. (2014b). Development area profile Milk River, Clarendon. Clarendon. Suresh, B., Sudhakar, G., & Damodharam, T. (2015). Determination of heavy metals in sugar industry effluent. International Journal of Modern Engineering Research, 5(4), 180–183.

CHAPTER 9

The Current State of the Sugar Industry

Introduction The performance of the Monymusk Estate in terms of production and productivity since privatization, as well as critical social and environmental indicators of the Monymusk SDA, as measured by the empirical work of this research, show that up to 2015/16, the objectives of Government of Jamaica’s Strategy for the Adaptation of the Sugar Industry, 2006–2015, were largely not realized. The Monymusk Estate though, as well as the Monymusk SDA, are not the sum total of the sugar industry. It is also the case that the sugar industry continues to the present day, beyond the time horizon of the empirical work reported in Chapters 7 and 8. The question is how has the industry fared on the whole since privatization commenced in 2010? Were the events in the Monymusk SDA typical of the entire industry? Has the privatization experiment been a dismal failure all round? What is the state of the industry at the present time? The JCS relied on privatization as the sole means of injecting new capital and management in the Government’s seventy percent ownership of the industry. There was absolutely no contemplation of Government’s continued ownership in any form in the industry, although a small stake was carved out for Government in the ill-fated first attempt to divest Frome, Monymusk and Bernard Lodge Estates to the Brazilian company Infinity Bio-Energy Inc in 2008. Not only was Government clear on © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0_9

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privatization as a sort of panacea to place the industry on a financially sound and sustainable footing, the Government was anxious to quickly rid itself of the industry, prodded no doubt by the IMF, and desperate to stem the drain of the industry debts on the national budget. When the privatization process started in 2005, then Minister of Finance and Planning, Dr. Omar Davies, was very clear on the criteria for selection of a successful bid. The Minister publicly declared that the successful bidder must possess “deep pockets”, expertise in the industry and “a reputation to protect”. With this clear mandate, a formidable Enterprize Team was assembled to undertake this most important task, headed by eminent former banker Mr. Aubyn Hill. Notwithstanding the criterion of “deep pocket”, in the actual divestment which was completed in 2010, the Government seemed to have been no longer driven by revenue concerns, as according to Ministry Paper 20/12 of February 14, 2012, up to that time only Jamaican $1.03 billion was realized from the divestment of 6 six sugar factories and lands surrounding them, and lease payment from over 40,000 hectares of land. Of the $1.03 billion, $960 million were proceeds from sale of the assets, and the rest represents lease payments collected up to that time. The “deep pocket” probably related to the promised investments of the successful bidders/new owners, with a reported $10.7 billion expenditure by the new owners up to February 2012, inclusive of the establishment of 1659 hectares of cane. When the proceeds of sale of assets and expenditure by the new owners are juxtaposed to the total valuation of assets of $14.4 billion, the whole divestment exercise would appear to have had an auspicious start, auguring well for a promising future, particularly given the decrepit state of the infrastructure inherited by the new owners. The promise however began to disappear quickly. By the 2010/2011 crop year, only one year after assuming ownership, the Everglades Farm Limited closed the Long Pond Factory for rehabilitation, significantly impacting the farmers in the Trelawny area who supplied that factory. By 2015/16 crop year the Government had to operate the Long Pond Factory, which was the subject of major investment in rehabilitation by Everglades Farm Limited in 2010/2011. Since 2015/16, this factory has not been operated. In the case of the Monynusk Factory, the PCSC decided to close the factory in the 2016/17 crop year, forcing the Government to lease back the factory for that year in order to process the 176,000 tonnes of cane that was at stake. The PCSC eventually mothballed the Monymusk Factory in the 2018/19 crop year. The Golden

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Grove estate in St. Thomas, on the other hand, continued operations up to the 2018/19. The Appleton Sugar Estate, famous for the world renowned Appleton Rum, closed its doors in 2020. This Estate was however, always privately owned. Overall, since Government divested its interest in the sugar industry over the 2009/2010, period, sugar cane and sugar production have declined precipitously. According to data from the SIA, if in 2010 some 1,395,100 tonnes of cane were reaped from 27,595 hectares to produce some 122,104 tonnes of sugar in 7 factories, then in 2020 519,070 tonnes of cane were reaped from 11,423 hectares to produce 43,947 tonnes of sugar from four estates. Correspondingly, cane and sugar productivity declined from 50.56 T/Ha and 4.42 T/Ha respectively in 2010 to 45.44 T/Ha and 3.85 T/Ha respectively in 2020. The decline in production and productivity however, does not tell the full story of the decline of the industry and the impact of this on dependent communities around the estates. The closure of Monymusk, Everglades Farms Limited, Appleton and Golden Grove Sugar Company would have had a massive impact on the surrounding communities, where in the main sugar was the only industry in these areas. There has been a massive attrition of independent cane farmers from the industry. This is supported by data from the SIA, which show that between 2010 and 2020 the number of registered cane farmers declined from 6882 to 2735 farmers. This would have had a serious impact on the livelihoods of cane farmers, many of whom possess no other skill that would help them to transition into alternative livelihoods. The empirical work in Chapter 8 already established that these cane farmers have not been absorbed in Agro Parks established in SDAs as part of the JCS, and there was a low take up of training opportunities. With the area of lands in sugar cane production declining from 27,595 hectares to 11,423 hectares, some 16,172 hectares of Jamaica’s most productive lands, outfitted in the main with irrigation infrastructure, would have been left idle. Little of these lands have been put into other productive use and the vast area of idle lands are steadily falling prey to housing development. Privatization was expected to pump new investments in field and factory operations in order to improve production and productivity and give the industry a chance to survive. This massive decline in production and productivity occurred at a time when there was reported billions of dollars in investment in factory rehabilitation, establishment of over 12,000 hectares of cane through the Cane Expansion Fund and an

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increase in price paid to farmers from $3500 per tonne cane in 2011 to over $5000 per tonne in 2020. In fact, industry experts have indicated that the Jamaican industry enjoys one of the highest price for sugar cane in the world. What then went wrong with the privatization exercise? This chapter will take a factory by factory look at what exactly transpired on individual estates, based on available data and expert interviews with owners/senior managers of these estates, as well all examine Government actions during this period and offer some perspective on what is now the future of Jamaica’s sugar industry.

Developments in the Industry Post 2016/17 Divestment of Government’s holdings in the sugar industry, which was effected between 2009 and 2010, brought new optimism to the industry in the immediate years following the 2009/2010 period. After the failure to divest the sugar assets in 2008, when Infinity Bio- Energy Inc. failed to raise money on the international capital market to make good their Memorandum of Understanding with the Government, the sugar industry interests and the country in general, were impressed with the swiftness with which the Government reaped positive results in the second attempt at divestment in 2009. By July/August 2009, the Government announced the successful divestment of the St. Thomas Sugar Estate to a consortium comprising the Seprod Group and Fred M. Jones Farms; and the divestment of the Long Pond and Hampdem Estates in Trelawny to the Hussey family. The quick recovery of the divestment process was as reassuring as the reputation of the private interests which took over these estates. The Seprod Group was a large conglomerate prominent in the food manufacturing and distribution business in Jamaica, with a long and distinguished history of efficient and profitable operations. Fred M. Jones Farms Limited was at the time the largest independent cane farmer in Jamaica. The combination of Fred M. Jones’ competence and history in cane growing, with the industrial experience of the Seprod Group was felt to be a winning combination. The Husseys was a prominent family with diverse business interests spanning hotel/hospitality, horse breeding, pharmaceutical operation and gambling. It was felt that their success in such a wide array of businesses could be easily be translated to the sugar business. While much was not known about COMPLANT’s experience and success in the sugar business, save and except that they had

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a few estates in East Africa, they were perceived as having long pockets. Their plans for diversification into refined sugar, ethanol and cogeneration inspired considerable hope for the sugar industry. This new hope for the sugar industry, which divestment ushered, was further bolstered by the industry securing through the Jamaica Cane Products Sales (JCPS), a three year supply contract with Tate and Lyle for the supply of raw sugar from Jamaica at the highest prices per tonne ever realized by the Jamaican Industry. Viewed against the 36% reduction in our export price in the EU between 2006 and 2009, and the general loss of guaranteed prices in that market, the contract with Tate and Lyle in 2012 was a significant ‘shot in the arm’ for the industry. There was clear evidence of investments by all new owners in the industry, not only in factory rehabilitation, but in the case of PCSC and Golden Grove Sugar Company in St. Thomas, there were investments in a cogeneration plant in Frome and Monymusk, and the design of one in St. Thomas. By 2014, Golden Grove and Everglades Farms Limited, the two new owners which came on board in 2009, both created production records, Golden Grove for recording the highest production of sugar in its history, and Everglades for achieving the most improved performance in sugar production in that year. The circle of hope was completed by Golden Grove obtaining its own licence from the SIA to market its own sugar in 2016 and the corresponding large investment this factory made in packaging and distribution of sugar in Jamaica and the Caribbean, signalling a clear break from the aged old practice of exporting raw sugar in bulk to the EU. This initiative confirmed that not only was diversification possible, but it was certainly more profitable. By the 2016/17 crop year however, things began to change for the worse, and hope began to fade and despair set in. What was the situation with individual factories? The Pan Caribbean Sugar Company—Monymusk and Frome Factories As previously stated, the Sales and Purchase Agreement between and COMPLANT and the Government of Jamaica, in respect of the divestment of the Frome, Monymusk and Bernard Lodge Sugar Estates, was executed on July 30, 2010. Under the Agreement, the three factories and the lands in the immediate vicinity of the factories were sold for US$9 million, and some 30,000 hectares of land leased to COMPLANT

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at a rate of US$35 per hectare per annum for 50 year, with a possibility of renewal for another 25 years. COMPLANT committed to invest immediately some US$127 million in field and factory rehabilitation. COMPLANT further committed to conduct a feasibility study to guide its intention to build a sugar refinery and initiate the production of ethanol. If feasibility is established, the plan was to invest some US$221 million to refine some 200,000 tonnes of raw sugar. The activation of refined sugar and the production of ethanol were expected to have a positive impact on the entire industry, as COMPLANT’s two factories did not have the capacity to produce 200,000 of raw sugar. Furthermore, this ambitious plan would require substantial expansion of sugar cane production, from which independent cane farmers would benefit. Optimism was high and no less a person than then Prime Minister Bruce Golding captured that optimism and the potential impact of this divestment on rural development, when he said at the signing of the Agreement: We have faith that this industry can succeed. We have faith that with new technology, with new equipment and by expanding the boundaries today outside of our reach this can once again become a solid pillar on which we can build an economic future, particularly for rural communities.1

There were good grounds for this optimism. Frome, Monymusk and Bernard Lodge represented the greatest potential of all the six government owned estates which were up for divestment. Frome and Monymusk were the two largest factories in Jamaica in terms of production capacity. With over 18,000 hectares of flat irrigated lands in Bernard Lodge and Monymusk, there was abundant capacity for cane expansion. Frome the largest estate in Jamaica, had good annual rainfall, so that sugar cane can be grown in that area without expensive irrigation systems. COMPLANT, trading as Pan Caribbean Sugar Company, (PCSC), took effective control of the Frome, Monymusk and Bernard Lodge in August 2011, having contracted the government owned SCJ Holdings Limited to operate these estates for the period August 2010 to August 2011. With respect to the promised investment in rehabilitation of the Monymusk and Frome Factories, there is no doubt that some investments were made. In Ministry Paper 20/12 of March 5, 2012, then Minister 1 Retrieved from jm.chineseembassy.org/eng/xw/t721339.htm.

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Roger Clarke reported investments of some $6.3 billion by PCSC, inclusive of 949 hectares of new cane planted. Also evident was Chinese made equipment such as trucks, tractors and other machinery. NEPA, the environmental agency also reported that PCSC obtained a permit for the construction and operation of a power generation facility, which were in fact built at both Frome and Monymusk. The intention was that the facility in Monymusk would supply power for the factory operations and to power the large number of irrigation pumps in the area. For Frome, the cogeneration facility was intended to power the factory operations, with the excess to be sold to the national grid. The huge investment by PCSC was no doubt facilitated by the generous provisions of the Sale and Purchase Agreement for waiver of import duties and General Consumption Tax. In the area of sugar cane growing however, PCSC did not distinguish itself. Within a short time of their assumption of the operations of the three estates, there was overwhelming physical evidence of the neglect of many cane fields. Most of the 949 hectares of new cane established by PCSC, was in fact done during the one year period between August 2010 and August 2011, when SCJ Holdings operated the estates on PCSC’s behalf. It was in the area of field operations that the Chinese managers at Monymusk Estate demonstrated their utter lack of knowledge of the agronomy of cane production. For instance, after a while, the management as part of some cost saving economy decided to operate irrigation pumps only between Mondays and Fridays, between the hours of 9 a.m. and 5 p.m.! These kinds of management decisions were not surprising, coming from the first manager of PCSC, who was in fact the Interpreter used by COMPLANT during the negotiations for the divestment. The neglect of field operations was clearly manifested in the decline in cane production by the Estate, with cane production from the Monymusk Estate declining from 231,574.9 tonnes in 2012 to 85,599 tonnes in 2015. The claims by participants in the case study reported in Chapter 8 regarding cane fields in Monymusk Estate overrun by bushes, were certainly not exaggerated. In contrast to the Estate, independent cane farmers, buoyed by the early promise of divestment, and in response to the early visible investments on the factory side of the operations, increased their own cane production from 65,739 tonnes in 2012 to 167,842 tonnes in 2015. Notwithstanding, the commendable performance by the independent farmers, sugar production by the Monymusk Factory declined from

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26,329 tonnes in 2012 to 19,775.4 tonnes in 2015, attributable to the dismal performance of the Estate’s cane production. The Monymusk factory never recovered, with sugar production continued to decline to 8104.65 tonnes in 2018, the last year of Monymusk’s operation. At the same time, the performance of PCSC in Frome was no better. Production declined from 32,784.8 tonnes of sugar in 2015 to a dismal production of 11,167.75 tonnes in 2020, in a factory with a rated capacity of 100,000 tonnes of sugar. The seemingly uneven attention paid to field and factory operation by PCSC reveals a fundamental lack of understanding of the symbiotic relationship between field and factory operations. The profitability of any sugar enterprize is highly dependent on what occurs in the fields. Indeed, as they say in the industry, ‘sugar is made in the field’. No matter how a factory is sophisticated and efficient, profitability is dependent on good quality cane in terms of juice, and an abundant and consistent supply of cane. Indeed, as Mr. Karl James, Chairman of the Sugar Association of the Caribbean (SAC), remarked in an article in the Gleaner newspaper of November 1, 2019, “you can’t produce sugar without cane”. Given the huge overheads associated with the sugar business, it is imperative that a factory has sufficient and consistent supply of cane to maximise its level of utilization. Notwithstanding the demonstrated investment in factory operations, the management of the factory was clearly an issue reflected in the poor indices of factory efficiency at both Monymusk and Frome. Date from the SIA show that the factory recovery index (FRI), at Monymusk declined steadily from 91.85 in 2011 to 70.67 in 2018. For Frome, the FRI hovered between 81 and 74 during the period 2014 to 2019. The industry’s standard at which all factories are required to pay cane farmers for cane delivered to factories, is 91. One can well imagine the massive losses experienced by PCSC as a result of inefficient farm and factory operations. In addition to the inefficient operations at both field and factory levels at the PCSC, relations between the Chinese management and the Jamaicans at all levels were less than cordial, characterised by mistrust, tension and in some cases downright acrimonious. Clearly, no estate could have continued to provide the level of social support to whole communities, as obtained for decades in the sugar industry. However, the case study reported in Chapter 8 speaks to considerable tensions in relations between workers and community members on the one hand, and the Chinese management on the other hand. The tensions in relationship between

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Chinese managers and local workers and people has been admitted by George Hong Guo, Deputy Chief Executive Officer of PCSC, who in the Gleaner of November 21, 2017 was quoted as saying: We have employed different strategies to improve relations between Chinese and locals, but it will take some time before we are able to relate at an acceptable level. It is easy to say hello, but not easy to understand the culture …

Independent cane farmers complained for instance that the curtailment of irrigation services to Monday to Friday within working hours significantly impacted their own production, as they depended on the factory for water, for which they committed to pay. These were the very farmers the factory depended on for cane supply. In Frome, the tension in relations was manifested in widespread cane fires outside the harvesting period, resulting in significant losses to the factory. In April 2016 in a meeting with the Ministry of Agriculture, PCSC reported that in one single day alone they lost 30,000 tonnes of cane due to illicit cane fires. Given all of the above circumstances, from late 2015 the management of PCSC began to signal to the Government that they were experiencing a range of difficulties that impacted their operations. In April 2016, in a meeting with the new Minister of Agriculture Karl Samuda, PCSC indicated that they would not be operating the Monymusk factory for the 2016/17 crop year. They indicated that despite their investment of US$200 million up to that point, they had racked up considerable losses attributable to drought in Monymusk and Bernard Lodge, their inability to secure a Power Purchase Agreement (PPA), from the Government/JPSCo despite their investment in two cogeneration facilities, and their mistake in withdrawing from the JCPS, the marketing agency for the industry, at a time when JCPC secured the best supply contract ever in history of the industry. The then management of PCSC felt that somehow they could obtain better prices for the sugar that they produced. This obviously did not materialize, and even though PCSC was obtaining a lower price for their sugar in relation to the other factories that were a part of JCPS, they were obliged to pay their independent farmers at the same rate as JCPS factories pay their farmers for cane supplied to the factories. The situation with PCSC at the time of the April 13, 2016 meeting with Minister Samuda was dire. They explained that COMPLANT’s

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equity in purchasing the Government’s sugar assets in 2010 was US$60 million and the rest of the cost of acquisition was funded by short term loans. The accumulated losses since 2010 up to that point severely eroded their equity. As a listed company on the Hong Kong Stock Exchange, investors were certainly looking for a return. To avoid bankruptcy, the management explained that they were closing Monymusk factory for the upcoming 2016/17 crop year, in order to arrest their losses and restructure with the inclusion of new equity partners, in order to return stronger in the 2017/18 crop year. In the meanwhile, PCSC sought to engage large independent cane farmers, on a sub-lease basis, to grow cane for them in the Bernard Lodge region. This of course was reminiscent of previous attempts by Tate and Lyle in the early 1970s to pass off the most uneconomic part of the sugar business to farmers, whilst they held on to the more lucrative manufacturing aspect. The announcement by the management of PCSC of the temporary closure of the Monymusk factory was like a death knell both to the Minister and people of the Monymusk SDA, given the longstanding dependency of those communities, workers and independent farmers on the estate. As a consequence, despite the Minister’s disappointment, the decision was made almost immediately for the Government to operate the Monymusk Estate for the 2016/17 year, through the now default operator, the SCJ Holding Limited. Figures from the Ministry of Agriculture reveal that this intervention cost the Government some $250 million. The PCSC resumed management of the Monymusk Estate in the 2017/18, but that was in fact the last year of the operation of the factory. Since the 2018/19 crop year, the Monymusk factory has been closed, and all the canes reaped by independent farmers since have been sent to the Worthy Park factory in the neighbouring parish of St.Catherine, as well as the Appleton factory some distance away in St. Elizabeth. The Government provided a transportation subsidy to independent farmers to cushion the high transportation costs involved in moving canes over such long distances. In 2019 PCSC formally returned to the Government of Jamaica some 18,000 hectares of lands under lease. Since the closure of the Monymusk Factory in the 2018/19 crop year, there have been reports of different groups of investors showing some interest in the Monymusk Factory, but nothing serious has since materialized. It is instructive that while the Monymusk factory has been effectively mothballed, PCSC continues to cling closely to the Frome factory, doubtless due to the comparatively cheaper cost of operating Frome, which

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is a rain fed area. PCSC has concentrated all their resources at Frome, however the results from Frome continue to be disastrous, as reported earlier. Producing just over 11,000 tonnes of sugar in a 100,000 tonnes capacity factory is clearly unsustainable. Unless something dramatically happens to reverse the declining cane production trend at Frome, it will only be a matter of time before that factory is also closed. In fairness to PCSC, their plans with respect to refined sugar, cogeneration and ethanol, were contingent on policy action at the Government and CARICOM level. This however will be addressed further on in this chapter. PCSC however, cannot escape responsibility for some of the impetuous, questionable and even absurd decisions they took at Monymusk. Their commendable investments on the factory side of the operations while ignoring good agronomic practices in the field, coupled with their disastrous factory efficiency indicators underscore their basic lack of understanding of how to manage a sugar enterprise. PCSC might have satisfied Dr. Omar Davies’ criterion of having ‘long pockets’, evidenced by their investments in the factory, but they failed miserably in relation to knowledge and expertise of the industry. The Golden Grove Sugar Company—St. Thomas The St. Thomas Sugar Company, situated in the eastern parish of St. Thomas was divested to a consortium comprising the Seprod Group and Fred M. Jones Estates Limited on July 16, 2009. Under the Sale and Purchase Agreement, the factory and some 10.5 hectares of land in the immediate environs of the factory were sold for US$500,000. Cane lands owned by the Government were leased to the new owners at a rate of US$53 per hectare per annum for 50 years, renewable for another 25 years. The new owners renamed the factory the Golden Grove Sugar Company. The divestment of the St. Thomas Sugar factory represented new hope for the often neglected parish of St. Thomas. In the eastern section of the parish, the St. Thomas Sugar Factory was the only industry and the dependence of the communities on this factory deepened when the Eastern Banana Company ceased operations in 2008, after being decimated by the impact of a series of hurricanes in the mid-2000s. The general expectation was that the new Golden Grove Sugar Company would leverage the tremendous cane growing expertise of Fred M. Jones Estates Limited and the demonstrated industrial prowess of the Seprod

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Group to make the enterprise a success and breathe new life in the economy of St. Thomas. The Golden Grove Sugar Company started immediately to rehabilitate the factory and expand cane production. By 2015, Seprod Group’s CEO in the Gleaner of July 8, 2015, reported investments of over $3 billion. These investments include upgrade of the factory, acquisition of critical equipment for field and factory and expansion of cane production. In Ministry Paper 20/12, Minister Roger Clarke reported Golden Grove Sugar Company establishing some 284 hectares of cane. The expansion of sugar cane growing was visible in St. Thomas, unfortunately even on lands not quite suitable for cane growing, with sugar cane being planted on lands cleared of mangroves. The factory attracted significant criticism from environmental groups for this unsustainable practice. These investments in field and factory upgrade in the first few years paid good dividends in the form of production increases from 12,587 tonnes in 2010 to an all-time record for the factory of 19,403 tonnes in 2014. The most exciting aspect of Golden Grove’s investments however, was the installation of a modern bagging line to facilitate the packaging of sugar for the retail and distributive trade, as well as for exports. The management of Golden Grove, no doubt inspired by the manufacturing experience of the Seprod Group, correctly realized that the sustainability of their enterprise lies in diversification of their product base and moving up the sugar value chain, rather than simply exporting raw sugar in the hull of a ship to the UK. Based on this vision, and having invested in a modern bagging facility in 2012, the management of the Seprod Group by 2015 began to ramp up their advocacy for a licence from the SIA to market their sugar. This necessitated a pulling out of Golden Grove from the JCPS, which was the main marketing agent of the SIA to facilitate individual factories to pool their raw sugar for export to the EU. Recall, PCSC insisted and obtained their own marketing licence in 2012. Golden Grove Sugar Company obtained its licence to market its own sugar from the SIA in September 2015. The withdrawal of Golden Grove from the JCPS created a fire storm in the industry. The other factories in the JCPS, namely Worthy Park, Everglades Farm Limited and Appleton, not only felt betrayed, but asserted that Golden Grove’s withdrawal jeopardized the JCPS’ commitment to export a certain quantum of raw sugar to the EU in the 2015/16 crop year. So sharp was the reaction of the JCPS, that that entity threatened to sue Golden Grove for breach of contract. The truth is, the withdrawal

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of Golden Grove from the JCPS represented the final unravelling of that entity, after the withdrawal of PCSC in 2012. JCPS clearly had outlived its purpose. It was set up in 1984 as an agent of the SIA to sell Jamaican sugar to the UK, under the Sugar Protocol of the EU, which was essentially an agreement between the Government of Jamaica and the receiving Government. JCPS made perfect sense in the era of exporting bulk sugar, since there was no product differentiation and none of the factories had the storage nor possessed the acumen for shipping logistics to sell their raw sugar individually to the UK. It was instructive that up to that time, the JCPS rather that seeing this initiative as a wakeup call to diversify and move into the lucrative packaging sugar market in Jamaica and the region, saw it rather as a threat to the status quo, they were desperately holding onto, despite the erosion of preferences in the EU market. Armed with its own licence from the SIA, and on the strength of the distribution network of its parent company Seprod Limited, Golden Grove shipped its first 125 tonnes of packaged sugar to Barbados in early March 2016. In an interview on April 4, 2021, CEO of Seprod Group Richard Pandohie confirmed that Golden Grove Sugar Company did very well in exporting branded sugar to Barbados, Trinidad and the rest of the Caribbean. He confirmed that the margins on the exports of branded sugar to the Caribbean were much healthier than exporting bulk sugar to the UK. Hence, the company shifted from bulk sugar exports to exports of packaged sugar, which as a stand-alone business was quite profitable. Despite the unqualified success of the package sugar exports, the Golden Grove Sugar Company experienced huge losses from the very beginning. In 2015 the company, as reported in the Gleaner newspaper of July 8, 2015, had a working capital deficit of $1.3 billion, following losses in 2013 and 2014 of $522 million and $400 million respectively. Efforts in 2015 to outsource the cane production side of the business to independent farmers did not arrest the losses. According to the CEO of the Seprod Group, despite the huge investments made in the business, the factory was dogged with a persistent low supply of cane and low levels of efficiency in factory and fields, with the Estate’s conversion of cane to sugar consistently below the industry average. Again this underscores Mr. Karl James’ point that ‘you can’t make sugar without cane’. The CEO also admitted that some of the decisions in terms of cane expansion did not make sense. There were also issues with theft of fertilizer and other inputs from the farms, as well as sabotage, reflected for instance in the scrapping of a brand new harvester, procured at great cost but scrapped with less

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than 200 hours of usage. The persistent bad publicity of certain environmental NGOs was tarnishing the image of the Seprod Group, which traded all over the world, and could in the long run be injurious to the brand. Against the background of perennial losses, the Seprod Group decided to close the Golden Grove factor in 2019 and exit the sugar business. On refection, the CEO indicated that the major motivation for Seprod venturing into the sugar business was not primarily for sugar, but to exploit the energy potential of the industry. The intention was to produce energy from cogeneration at the factory in St. Thomas, which would then be ‘wheeled’ to other entities in the group of companies. To this end, the CEO confirmed that Golden Grove spent some ‘good money’ in designing a cogeneration plant. This initiative was however abandoned due to the tardiness of Government to promulgate a wheeling policy. The failure of the Golden Grove Sugar Company to produce positive financial results and stimulate the economy of St. Thomas in the process was related above all to lack of expertise in the sugar industry. This case demonstrates that investments in fields and factory are necessary, but not sufficient—management and know-how matter. And of course, size matters. With the closure of the factory, the company is still engaged in the growing of cane, which is harvested earlier than usual and used as animal feed at the Serge Island Dairy, also owned by Seprod and situated in Western St. Thomas. With the closure of the factory, Eastern Thomas communities are once again ghost towns. Notwithstanding the pay out of the relevant redundancy entitlements to the over 152 factory and 540 field workers, there have been frequent reports in the news media of residents of the area bemoaning their poverty. There have been many reports of sugar workers’ protests for sugar lands to carry on farming activities. In April 2021 there were reports of the Seprod group losing nearly a thousand acres of cane valued at $150 million due to illicit fires. This speaks to continued tensions and disgruntlement in a sugar dependent community that the promise and hope of the prosperity of privatization have eluded. Everglades Farms Limited The assets of the Trelawny Sugar Company comprising the Long Pond Sugar Factory, the Hampden Factory and Distillery, Great Houses and 33.8 hectares of land in the immediate environs of the factories were sold

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to the Everglades Farms Limited on July 20, 2009 for US$1.5 million. At the time of the divestment the Long Pond Factory was in operation, but Hampden was not. Some 8000 hectares of cane lands were also leased to Everglades Farm Limited at a rate of US$40 per annum per hectare for 50 years renewable for an additional 25 years. The lease payments were however differed until July 2012 and Everglades Farms Limited was required to have 60% of these lands in effective production within 10 years. Everglades Farms Limited from the very beginning of their operations was faced with challenges. The 2010 crop, representing the harvesting and processing of canes inherited at the point of divestment in July 2009, was disastrous, with production of a mere 1457 tonnes of sugar. According to Andrew Hussey, Managing Director for Everglades Farms Limited, in an interview on January 5, 2021, from as early as six months into the operations, the family realized that the venture, which was driven primarily by the interest of his father, was a mistake. Andrew Hussey admitted that “in hindsight proper due diligence was not done”. Despite this realization Hussey explained that it was difficult to exit at that time due to the family’s investment of loans and equity. Following the low production of 2010, the owners of Everglades Farms Limited decided to close the factory for the 2010/2011 crop year for refurbishment. Some US$20 million was spent on refurbishing the factory including refurbishment of boilers, overhaul of turbines and mills, installation of generators and repairs to conveyor system and sugar bin. The investment also included the planting of some 426 hectares of new cane, according to Ministry Paper 20/12. Andrew Hussey indicated that 10% the US$20 million investment involved rehabilitation works at the Hampden Distillery. The above investments enabled the Long Pond Sugar Factory to be reopened for the 2011/2012 crop. The factory made steady progress moving from a production of 3984 tonnes of sugar in 2012 to 6674 tonnes in 2013 and peaking at 11,724 tonnes in 2014. By 2015, the factory’s production dipped to 11,103 tonnes. Towards the end of 2015, the owners of Everglades Farms Limited indicated to the Government that they would not be operating the factory in 2016, due to massive losses accumulated since the acquisition of the assets in 2009, and mounting debts. Andrew Hussey indicated that their plan was to invest US$6.5 million in 5 years, but investments ended up being in excess of US$20 million,

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a significant portion of which was loans. In addition to the mounting debts, some of which were short term loans, the sugar venture was haemorrhaging the other aspects of the family business—hotel, pharmacy, horse breeding and gambling, which had to subsidize the loss making sugar enterprize. By his reckoning, the factory needed to produce at least 20,000 tonnes of sugar to break even. This of course was compounded by low levels of field and factory efficiencies, reflected in high tonnes cane to tonnes sugar conversion ratios and below industry standard factory recovery indices. Interestingly, Mr. Hussey pointed to the loss of guaranteed high prices in the EU market as a contributing factor to the disastrous financial results. However, this fact would have been known at the point of acquisition of the assets. In fact, it was the loss of Jamaica’s preferential prices in the EU, triggered by the reform of its sugar regime, which precipitated the divestment in the first instance. In summary, Hussey characterized the family’s foray into the sugar business as “horrific” and a “bitter pill to swallow”. In response to Everglades Farms Limited’s announced closure for the 2016 crop, the newly elected Government took the decision within its first 100 days to operate the Long Pond Sugar Factory for 3 months, through the SCJ Holdings Limited. On March 29, 2016, Minister Karl Samuda announced the decision in Parliament, and explained that the motivation for the Government action was to rescue some 95,000 tonnes of independent farmers’ cane which was at stake. Typically, with the closure of the Long Pond factory, the Government would have provided a transportation subsidy to the independent farmers in the area to move their canes to the Appleton Factory, approximate 160 kilometres away in St. Elizabeth, and or to the Worthy Park Factory, which was at a slightly shorter distance in St. Catherine. Unfortunately, in the 2015/16 crop year the Appleton factory was also closed, and it was far too late in the crop to move all the 95,000 tonnes of cane to Worthy Park. Given the typical heavy dependency of the surrounding communities on the factory, the Government was also anxious to avoid social fall out. SCJ Holding’s efforts produced only 3016 tonnes of sugar in 2016, and the Long Pond Factory has not operated since. Apart from the persistent challenges of low cane and sugar production, mounting debts and huge financial losses on the part of the investor, the divestment of Government’s sugar assets in Trelawny presented some unique challenges not seen in the other divestments. In the first instance, this divestment was the only one for which lease payments was differed

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for 3 years. It was the only one where a stipulation was made in the Sales and Purchase Agreement for at least 60% of the nearly 8000 hectares of lands leased to be in cane production within 10 years. This would suggest an implicit admission from the very onset of the divestment transaction that low cane supply in relation to the vast acreages available in the area was not only a challenge, but a critical success factor for the venture. At its peak production in 2014, only 3068 hectares of cane were in production, 77% of which was reaped. Clearly, despite the reported establishment of some 426 hectares of cane by the new owners, after 6 years of ownership, they were some way off the 60% cane utilization target within 10 years from 2009. This again underlines the preponderance among new owners of divested entities of factory investments over investments in the field. Again the injunction of Mr. Karl James is appropriate: sugar cannot be made without cane. The vast acreage of lands leased to Everglades proved as well to be a persistent source of tension between them and the SCJ Holdings, the entity of the State in which all Government’s sugar lands were vested, and which was responsible for preparing the assets for divestment. There was a long running battle between Everglades Farms Limited and SCJ Holdings limited over non-payment of the former of lease due to the Government. While the quantum of lease payments due to the Government was known, there was a long running dispute with respect to sums due to Everglades Farms Limited covering rental by SCJ Housing of houses from Everglades Farms Limited, monies spent by Everglades Farms Limited on behalf of SCJ Holdings Limited to correct some environmental breaches and payment for the temporary lease back of the Long Pond factory for operation by SCJ Holdings in 2016. The idea was that sums due to Everglades Farms Limited would have been set off against outstanding lease payments. The reconciliation proved contentious, warranting several interventions by the Ministry. After failure of mediation and a demand letter served on Everglades Farm Limited in 2017, the matter was reportedly resolved in June 2019, resulting in Everglades Farm Limited returning the nearly 8000 hectares to the Government, except for 200 hectares around the Long Pond Factory. The tension between Everglades Farms and the SCJ Holdings in respect collection of lease payments and reconciling balance due to each other was unique in the entire divestment experience. The issue of the Long Pond lands however generated other tensions involving independent cane farmers, with the All Island Jamaica Cane

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Farmers Association at the centre of persistent lobby for cane farmers’ access to those vast acreages of lands. The tensions ranged from the rate at which Everglade Farms sub-leased lands to independent farmers in the early days of the privatization, to claims by Everglades Farms Limited of farmers encroaching on lands retained by it after the June 2019 agreement to hand over the leased lands to the Government. These tensions were widely reported in the local media. Since 2021 the issue with the Long Ponds lands has taken a new twist, with reports of the Government’s Housing Agency of Jamaica plans to build houses on a portion of these lands. This has re-ignited the longstanding debate on the conversion of agricultural lands for housing and its negative implication for the nation’s food security. In the meanwhile, Everglades Farm Limited has been pursuing a number of initiatives to reopen the Long Pond Factory, but on the basis of diversification to other cane based products. In 2017, the principals of Everglades Farm Limited shared with the Minister of Agriculture their plans to use the Long Pond factory to produce energy from a 14.2 megawatt biomass to energy cogeneration plant to produce electric and steam power, in partnership with the American Arrakis—Everglades Power Limited. The success of this venture however hinged on obtaining a power purchase agreement from the electricity utility, the JPSCo. After 3 years of negotiations the parties could not agree on the price JPSCo would pay per kilowatt/hour of energy. The price offered would not make the venture profitable and Everglades Farms Limited believe that the Government did not sufficiently facilitate the process, nor was the Government sufficiently aggressive or proactive in setting the appropriate policy framework to facilitate diversification. The most recent initiative to put the Long Pond factory in operation, as reported in the Financial Gleaner of December 4, 2020, is a plan by the Husseys to convert the facility to a rum manufacturing enterprize. It is interesting to note that the Hampden Distillery which was part of the 2009 divestment, has been operating largely without issues, in contrast to failure of the sugar side of the business. In fact, according to the Financial Gleaner, the Hampden Distillery was undergoing a US$1.5 million upgrade involving the transition to the use of liquefied natural gas for fuel. Perhaps, the Husseys can translate the relative success of the Hampden Distillery to the planned production of rum at a revamped Long Pond factory.

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The experience of the Husseys with respect to the divestment of the Trelawny Sugar Company again highlights a scenario in which considerable investments were made in the rehabilitation of the factory operations without commensurate attention being paid to increasing cane production and supply to the factory, and without a corresponding increase in factory efficiency. The business of growing cane and producing sugar is highly technical, and both processes are complementary and must work synchronously for optimal results. The failure of such huge investments to generate a more favourable outcome underscores the lack of technical expertise, experience and astute management required for successful divestment. Although experience and expertise in the sugar industry were identified as critical criteria for divestment by the Government, clearly this requirement was trumped by the over-riding fiscal considerations. The issue of Government’s failure to create an enabling environment for the growth and development of the energy potential of the sugar cane industry again arises in relation to this divestment. This will be addressed more fulsomely further in this chapter, as well as the issue of how cane lands are managed post- divestment. Appleton Estates Limited Appleton Estates Limited, manufacturer of the world renowned Appleton Rum, was founded in 1655 by Caleb and Ezekiel Dickenson, with all the trappings of slavery. The Appleton Estates has been in continuous operation since. Nestled in the Nassau Valley at the base of the Cockpit Country in St. Elizabeth and watered by the Black River, the Estate commenced the production of its famous Appleton Rum in 1749. Over time ownership of the Estate changed hands many times, with J. Wray and Nephew Limited assuming ownership in 1912. J. Wray and Nephew Limited later became a fully owned subsidiary of Lascelles deMercado Limited, which itself was taken over by Angostura Holdings of Trinidad and Tobago in 2007 and finally by Gruppo Campari of Italy in 2012. Over time Wray and Nephew became owners of the New Yarmouth Estates in Clarendon and through lease, the Holland Estates lands in South Western St. Elizabeth. The New Yarmouth Estates ceased sugar production in 1994, but retained the operation of its distillery, with the sugar cane produced at that Estate transported to Appleton Sugar Factory

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for processing. The Holland Estates was taken over by the Government in the 1970s, and its cane lands leased to the Wray and Nephew subsequently. The Appleton Estates Limited has never been the subject of a Government takeover, and has remained in private hands to this day. This Estate was perhaps one of the most diversified sugar estate in Jamaica, producing sugar and rum, along with a strong agro-tourism offering, with its famous rum tour. Without a doubt, its rum manufacturing operation was the strongest pillar of this enterprize. Like all other sugar estates in Jamaica, Appleton produced a portion of the cane it processed and relied on independent farmers to supply the rest. It has been an active part of all the important institutions in the industry viz: JCPS, SMCJ and Spirit Pools Limited. By the time of the beginning of the last wave of divestment in the sugar industry in 2009, Appleton Estate was one of the top performers in the industry, producing 31,625 tonnes or 25% of Jamaica’s sugar production, with factory efficiency indicators second only to the Worthy Park Estate. However, with a factory capacity of 50,000 tonnes, a production of 31,000, representing just above 60% of capacity, clearly danger was lurking. Production of sugar continued to average around 30,000 tonnes up 2014. In 2015, the Appleton Estate was to face one of its most serious challenges in its modern history, when an inland fishery establishment located not far from the factory, obtained a court injunction forbidding Appleton from opening the factory for the 2015/16 crop. The reason for the court action was the alleged contamination of water in the company’s fish ponds by waste from the Appleton Sugar Factory and Distillery. By the time Appleton sorted the legal challenge and resumed production in the 2016/17 crop year, it could not attain pre 2015 production levels, with production of 18,926, 16,480 and 10,925 tonnes in 2017, 2018 and 2019 respectively. The one year closure would have resulted in a significant attrition of independent farmers. Appleton’s production challenges would have also been impacted by the dwindling supplies of cane from its New Yarmouth Estate in Clarendon and the horrendous cost of transporting cane over such a long distance. In 2018 the management of Appleton returned the Holland lands, then under lease, to the Government, citing the astronomical cost of draining those lands, which are below sea level. The principals of Gruppo Campari, on taking over the Appleton operations in 2012, clearly indicated that even then the cane growing and

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sugar manufacturing aspects of the business were loss making, and their primary motivation in acquiring the Appleton Estates was the famous Appleton Rum brand. Clearly, the rum manufacturing aspect of the business was for a long time subsidizing the cane growing and sugar aspects of the enterprize. Given these realities, it was not surprizing in July 2020, when the management of the Wray and Nephew group announced the closure of the sugar factory. The Gleaner of July 30, 2020 quoted Mr. Jimmy Lawrence, Chairman of the Group, as saying that over the last decade the sugar operations would have chalked up losses of US$12 million. Predictably, the lucrative rum manufacturing side of the business continues, as well as the rum tours. The company has reportedly made arrangements with an independent entity to carry on the cane growing side of the business, with the harvested canes to be transported to the Frome Estate, in the neighbouring parish of Westmoreland. The 370 workers employed in the field and factory operations were reportedly paid reasonably good redundancy packages, and some of the workers would be re-employed by the independent entity carrying on the cane growing operations. Independent farmers are said to be receiving support from the Wray and Nephew group to subsidize the transportation of their cane to Frome for a finite period. The closure of the Appleton Sugar Factor after nearly four centuries of continuous operation showed once again that despite the efficiency of a factory, low cane supply can bankrupt any sugar operation. The entire structure of Appleton’s operation raises an issue that operatives in the sugar industry simply don’t like raised, that is, how the spoils of the products further up in in the value chain are shared among the different players in the industry. Clearly, cane growing has long proven to be unprofitable unless certain levels of productivity can be attained. However, even in the face of loss at the cane production and to a lesser extent the sugar production level, the rum business remains profitable. Notwithstanding this, the cane growers never get a portion of the profits in the rum business. Rum manufacturers argue that cane farmers are paid for the molasses from which the rum is manufactured. Yet in Jamaica in the sugar industry there has long been discontent as to the fairness and transparency with the mechanism for determining the price for molasses. Any system in which the distribution of the gains from the final product totally omits the producer of the raw material upon which the whole enterprise rests, cannot be sustainable.

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The Worthy Park Sugar Estate The Worthy Park Estates, situated in the beautiful valley of Lluidas Vale in Northern St. Catherine, in literally the middle of Jamaica, has been in continuous operation since 1670. According to Craton and Walvin (1970), the name “Worthy Park” was patented by Lieutenant Francis Price in 1670 and commenced commercial sugar production in 1720. Throughout its 350 years history, only three families owned Worthy Park Estate, with the current owners, the Clarke family acquiring the Estate in 1918. The Estate in its development would have been shaped and influenced by all the phenomena characterising the development of sugar in Jamaica—slavery, absentee ownership, trade liberalization in Britain in the mid to late nineteenth century and the long reign of preferential arrangements for sugar exports to Britain and later the EU from 1929 into the early years of the twenty-first century. The Worthy Park Estate has also been privately owned and typically managed by the family owning it. Though small in size with a capacity to process only 275,000 tonnes of cane, astute management of the Estate has compensated for the inherent disadvantage of its small size. In an interview with Mr. Robert Clarke, Managing Director of Worthy Park Estate on December 29, 2020, Mr. Clarke credited the sustained success and longevity of the Estate to “wise decisions”, which are sometimes “painful”, and to strong generational connection. Over the last 50 years, according to data from the SIA, Worthy Park Estate has consistently been the industry leader in terms of all the major indicators of efficiency— tonnes cane to tonnes sugar, tonnes sugar per hectare and the factory recovery index. These outcomes Mr. Clarke contends have been the result of employing consistently good agronomic practices, careful handling of harvested cane given its perishability and a well maintained factory. At the commencement of the divestment of Government’s holdings in the sugar industry in 2009, Worthy Park produced 21,685 tonnes of sugar or 17.2% of the island’s total sugar production, with the best indicators of efficiency throughout the industry. For the next four years, Worthy Park would maintain an average annual production of approximately 21,000 tonnes, but soared to an all-time record production of 27,650 tonnes in 2014. From the peak production of 2014, the Estate’s production reduced incrementally to a production of 22,319 tonnes in 2020, doubtless due to the challenge of dwindling cane supplies. Worthy Park’s fairly steady production of sugar in the last five years, averaging

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approximately 23,000 tonnes, has benefitted significantly from the closure of Long Pond, Monymusk and Appleton factories, since cane from these factory areas was transported to Worthy Park. The question arises: how has Worthy Park been able to better its sugar output relative to the pre-divestment period notwithstanding the loss of preferential prices in the EU, dwindling cane supplies, bouts of drought and the general malaise that has been afflicting all its competitors? According to Robert Clarke, Worthy Park has been strategic, aggressive and deliberate in continually securing new supplies of cane. During the divestment, it wanted to purchase the Inswood lands, then part of the Bernard Lodge Estate. This request was denied on the basis that it constituted cherry picking. Today the Inswood lands largely lay waste, except for housing developments. Worthy Park has however managed to secure through lease, 300 hectares of the Caymanas lands on a year to year renewal basis, yielding 18,000–20,000 tonnes of cane annually. This lease is under constant threat, as the lands are slated for industrial development, and are being significantly undermined by illegal sand mining. The company has also purchased nearly 260 hectares of land in the Bog Walk area and leased another 230 hectares of private lands, and is on the verge of leasing another 180 acres of Government property. Clearly, Worthy Park understands that cane is required to make sugar! Apart from securing its cane supply, which is basic for any sugar operation, and practising good agronomic management, since the reform of the EU sugar regime and the consequential divestment of Government’s sugar assets, Worthy Park has taken additional steps to bolster the viability of its operation and its profitability. The Estate’s strategy for survival was diversification of its product base. Consistent with this strategy, the company in 2005, commenced the construction of a brand new modern distillery, in order to resume its long tradition of distillery, started in 1741 and discontinued in 1962 by agreement with Spirit Pools Association of Jamaica, due to the overproduction of rum in Jamaica at the time. This was a US$8 million dollar investment which was made on the eve of the EU reforms, in order to mitigate the impact of the loss of preferential prices in the EU. The company also decided to enter the bagging and packaging aspect of the sugar business in order to capture a portion of the retail market for sugar locally and in the CARICOM region. Before the EU reforms all of Jamaica’s raw sugar production from all the factories would be consolidated and shipped to the EU and United States markets to take advantage

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of the highly concessional prices in these markets. The local market would be served by imports of cheap world market sugar, over which JCPS had exclusive rights. This imported raw sugar would then enter the retail trade in bulk, and then packaged at retail outlets, without any branding or packaging standard. This sugar would be sold at the retail level at prices more expensive than what EU consumers pay for a kilogram of sugar! JCPS would make good profits from this, which would go into a pool from which local sugar producers are paid. In this way, the local retail market was always the most attractive segment of the sugar market in terms of price, but the industry placed more emphasis on exporting bulk sugar, and through expropriating the profits from selling imported sugar to the local retail trade without investing in proper packaging. With the loss of preferential prices in the EU market, suddenly the local retail market became a prize to contend for. It was within this context that Worthy Park Estate invested some $400 million in a bagging and packaging facility, commencing production of bagged sugar (50 kilogrammes) in February 2017 and marketed through JCPS. The company went further to expand its product line to include the packaging of smaller packages of sugar. Significantly, the WISCYNCO, a major food distributor in Jamaica bought a 30% stake in Worthy Park Estate in November 2018, combining WISCYNCO’s strength of distribution and marketing with Worthy Park’s track record of sugar production, to ensure Worthy Park’s dominance for the local sugar retail trade and exports to CARICOM. Mr. Robert Clarke indicated that as at December 29, 2020 (date of interview), Worthy Park controlled 62% of the local market, and had already exported some 600 tonnes of packaged sugar to some 10 CARICOM countries and Cayman Islands. Their recent acquisition in 2019 of the prized Jamaica Gold brand from JCPS will certainly lend some impetus to this endeavour. Based on the performance of the Worthy Park Estate Limited and the strengthening of their position since the EU reforms and divestment, it would seem that this entity above all the players in the industry captured the vision of the first objective of Government’s Adaptation Strategy, that is for a viable private sector led industry, based on diversification of the product base of the sugar cane. Admittedly, all the divested estates were the object of considerable investments, but without the commensurate results in terms of increased production, productivity and diversification. The critical difference is technical expertise in the management of a sugar enterprize and understanding the critical nexus between growing cane

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properly and making sugar. It is significant that one entity has been able to point the way to a sustainable path for the sugar industry, despite the inherent disadvantage of its small size, and despite not being the beneficiary of the handsome tax concessions meted out to the Chinese, to whom some 70% of the industry was divested.

Government’s Role Throughout its long history, Government has always played a critical role in the sugar industry. In the epoch of slavery the role of Government was basically to organize the entire society to support the monoculture of sugar and to ensure that all the benefits from the sugar enterprize were expropriated solely by the planter class and the Crown. In the post emancipation colonial era, the British Government’s support was critical in supporting an ailing imperial sugar industry against the onslaught of trade liberalization and competition from European beet sugar, principally through preferential marketing arrangements. In the modern post war period which coincided with the most rapid growth of the sugar industry in Jamaica, universal adult suffrage, the rise of the trade union movement and independence, the role of the State shifted to creating a policy, institutional and legislative environment to balance the divergent interests in the industry, that of manufacturers, cane farmers and workers, against the background of deep seated mistrust among these three critical players, born of the experiences of slavery and colonialism. Government only became an active participant in the industry, in the form of a producer, in the early 1970s due to the failure of private owners. The JCS, as a response to reform of EU’s sugar regime and the loss of favourable market conditions, was intended to restore the role of the State to that of regulator and facilitator to enable the Private Sector to lead a diversified industry, generating more wealth, supporting the social fibre of rural communities and attaining environmental sustainability. How did the Government execute this role in the post divestment era? Dismantling of the Jamaica Cane Product Sales Limited The most significant impact of divestment on the industry outside of the precipitous drop in production and productivity of cane and sugar, has been the restructuring of the institutional arrangements in the industry.

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With the divestment of Government’s six estates between 2009 and 2010, the new owners, except for Everglades Farm Limited demanded their own agency agreement/licence from the SIA to market their own sugar. The Sugar Industry Control Act of 1970, which gave birth to the SIA, empowers the SIA under Section 6 of the Act, to be the sole marketer of sugar in Jamaica. The SIA executed this function until 1984, when it gave the newly formed JCPS sole agency status to market sugar on its behalf. JCPS was formed as limited liability company, owned jointly by the Sugar Manufacturers Corporation of Jamaica and the All Island Jamaica Cane Farmers of Jamaica. JCPS was a convenient and appropriate vehicle to pool all the sugar produced by all factories and sell it as bulk to the EU (British) refiners, as well as importing all sugar in the island, selling same in bulk to the food manufacturing industry and the retail trade, and distributing the revenue to manufacturers and cane farmers after meeting shipping, logistics, handling and marketing costs. This suited all the manufacturers, few of whom had adequate storage to hold the sugar before shipping, and whose individual volumes of sugar were not economical to justify shipping on their own. With the loss of preferential prices in the EU, selling bulk sugar in the EU was no longer viable. Suddenly the local retail trade and the regional market became attractive, and the new players were quick to identify the local and regional markets as the key to their survival. Hence, in 2012 PCSC demanded and obtained their own agency agreement to market their sugar, followed by Golden Grove Sugar Company in 2015. This marked the beginning of the unravelling of JCPS, which after 2015 only had Worthy Park and Appleton as its two substantive members, as by 2016 Everglades had closed its factory. The diminution of JCPS raised a number of issues for the payment of cane farmers for canes delivered to factories, as cane payment was linked to the declared price for sugar and molasses. Under JCPS there was a transparent and reliable mechanism to determine the price of a tonne of sugar, composed of the export revenue from the US and EU markets, JCPS’ profits from their selling of imported sugar on the local market and the price paid by Caribbean Molasses, which purchased molasses in bulk on behalf of all distillers. With PCSC and Golden Grove having their own marketing arrangement, how would cane farmers be assured of the veracity of the price these entities declare for a tonne of their sugar? These issues were resolved by both entities basically paying whatever price JCPS declared.

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With dwindling production, JCPS became more and more unsustainable, and eventually in the 2018/19 crop year the entity closed its operations. Before ceasing operations however, JCPC experienced serious cash flow problems, resulting in an inability to pay their remaining members the full declared price for sugar in 2018. Worthy Park for instance was paid only 70% of the declared price, and nothing for molasses. This dire financial condition of JCPS might have inspired both Worthy Park and Appleton to obtain their own agency agreements from the SIA in January 2020. The dismantling of the JCPS, though logical and inevitable within the context of the marketing realities, was certainly not foreseen by the JCS. It was however the unintended consequence of the action of the Government, through the SIA, of granting agency status to 2 of the critical new owners of the divested estates, that precipitated the dissolution of JCPS. These unintended actions however helped to place a new value on the local market and ushered in the sale of branded packaged sugar locally produced sugar in Jamaica. This initiative was further strengthened by the promulgation by Minister Karl Samuda, through the Bureau of Standards in December 2016, of mandatory packaging and labelling standards for all sugar in the local retail trade. This supported value added in the industry, improved quality and food safety for consumers, and doubtless more revenue for sugar manufacturers. With the disbanding of JCPS, it became necessary to set up alternative mechanisms to assist the SIA in executing its statutory responsibility of adjudicating between manufacturers and cane growers on issues related to the price paid to cane farmers for cane delivered to factories. The mechanism agreed was a Sugar Prices Committee, comprising equal representation from farmers and marketing agents/manufactures, chaired by the Chairman of the SIA and with the SIA serving as the secretariat. There is a school of thought that prices should be freely negotiated between farmers and factories. The historical distrust between farmers and manufacturers, however, warrants continued government’s intervention, as around the negotiating table the farmers are always at a disadvantage. It should be recalled that such historically entrenched distrust triggered no less than 6 Commissions of Enquiry into the sugar industry in the post war period.

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Rightsizing the Sugar Industry Authority The Sugar Industry Authority, the regulator of the industry, under the Sugar Industry Control Act, is funded by a cess levied on each tonne of sugar produced. In practical terms, on an annual basis the Board of the SIA would sign off on the budget of the entity as well as the estimate of the industry’s production for the upcoming crop and pass on this information to the Minister of Agriculture to promulgate a cess order, determining the quantum of the cess per tonne of sugar in order to fund the budget. As sugar production dwindled in the post divestment period, and as more factories closed their operations, the quantum of cess as a percentage of the industry’s sugar revenue grew larger and larger and the burden shouldered by a smaller number of manufacturers. Between 2009 and 2020 sugar production declined from 125,818 tonnes produced by seven factories to 43,946 tonnes, produced by three factories. Without a cut in the SIA’s budget, the burden of funding SIA from a cess on sugar production would be too onerous on the few manufacturers remaining in the business. Robert Clarke of Worthy Park indicated for instance, that in 2020 Worthy Park paid 62% of the industry’s cess, which was more in quantum than the Estate spent on chemical and fertilizer. In the post divestment period therefore, there was considerable tension between the SIA and manufacturers in relation to the size of SIA’s budget and consequently the amount of cess extracted from the industry. In 2018 the SIA and the SMCJ entered into an agreement to restructure the SIA, resulting in a cut in the SIA’s budget from $505 million to $230 million over two years. The restructuring translated into the closure of SIA’s Kingston office and a consolidation of its operations in Mandeville, the home of its research facility. Forty percent of SIA’s staff was made redundant at a cost of $111 million, funded by outstanding cess owed to the SIA by manufacturers.2 The restructuring of the SIA resulted in the curtailment of a number of services to the industry, such as laboratory testing services for the factories. Notwithstanding this restructuring of the SIA and the halving of its budget, manufacturers are of the view that the regulatory superstructure was still burdensome and wasteful. In fact one manufacturer characterized the SIA as “living the life of Raleigh”. There are even suggestions from manufacturers that the entire SIA operations should be subsumed within 2 Based on interview with Mr. George Callaghan on 2020 December 28.

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the Ministry of Agriculture. While it is critical that the SIA becomes as ‘lean and mean’ as possible, since it is funded by the industry, there will always be a critical minimum cost of executing its statutory functions. SIA need not be in the business of providing extension services to independent small cane farmers, hence this function was transferred to the AIJCFA some years ago. Equally, it should not be in the business of providing laboratory services to factories. Continuous testing and development of new varieties of cane is however critical for SIA, given the small size of Jamaica’s sugar industry. The regulatory functions in terms of adjudicating between cane farmers and manufacturers with respect to price paid to farmers remains a critical function of the SIA. It was precisely the endless disputes and lack of trust between farmers and manufacturers in the post war period that caused the convening of some 6 Commissions of Enquiry into the sugar industry. It was the Mordecai Commission of 1966 that recommended the creation of an independent institution to regulate the industry, which was achieved by the amendment of the Sugar Industry Control Act of 1937 in 1970 to create the SIA. The need for regulation in this regard is no less important, as the marketing of sugar, from which the price for payment of cane is based, has become even more complex. For example, one manufacturer now has a major distributor as one of its shareholder partner. It is not inconceivable that the manufacturer could sell sugar to the distributor at a deliberately low price, and recover its profits from the distribution end of the partnership. In such circumstances, the farmer would suffer from the low declared price of the sugar sold to the distributor, whilst not benefitting from the lucrative distribution side of the business. As long as the sugar industry exists, there will be the need for regulation, due to the peculiar nature of the industry and the quality of relations among its players. However, regulation must be minimised as much as possible. For example, in a liberalized market with all producers marketing their sugar in the local market, there is now no longer any need for the SIA to control the marketing of all sugar in Jamaica and to allocate quotas for the local market. These matters should be determined by the market, which eventually will result in lower sugar price to the consumer. In the past, the monopolistic JCPS would sell imported raw sugar on the local market at prices higher than obtained in Europe. The profit from this endeavour would then be used to add to the export revenue to determine the declared price for sugar, and ultimately the price paid for cane supplied by independent farmers. In this manner, the consumers of Jamaica have

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for years been subsidizing the players in the sugar industry. When the industry had 25,000 cane farmers, and was producing an appreciable quantity of sugar across Jamaica, this might have been justified. Given the current size of the industry and the small number of players, this continued subsidization cannot be justified socially. The price paid for cane in Jamaica is based on the quality of the cane. Hence, every load of cane delivered to the factory is subject to testing through core sampling. Due to the mistrust between manufacturers and cane farmers, the core sampling infrastructure, though situated on the factory premises, were owned and operated by the SIA. Over time, the manufacturers began to operate the whole core sampling apparatus, with the SIA observing the process and taking possession of the data. It is critical that this process remains independent and objective to give farmers the assurance of the accuracy of their payment. In arguing for deregulation of the industry, manufacturers contend that they and cane farmers are mutually dependent. It has to be admitted though, that in this affair, the farmers are in a weakened position. Issues of mistrust will not go away overnight, making regulation indispensable, particularly in light of a much weakened cane farmers association. The challenge is to make this regulation as inexpensive and efficient as possible. Supporting Production One of the primary driving forces behind the Government’s efforts to divest itself of the sugar assets was the tremendous fiscal burden of operating the sugar industry, which at the time of divestment stood at over $30 billion. As burdensome as the weight of these accumulated losses and debts were, this sum did not in a true sense represent real investment in the industry. The Government cleared all the debts and absorbed all the operational losses of its sugar holdings before the 1994 divestment. After receiving the factories debt free in 1994, the private owners gave it back to the Government in 1998 for one cent and with $4 billion in debt. The Government did not invest in the modernization/rehabilitation of these old inefficient factories or in irrigation infrastructure. Hence, every year these Government factories operated at a loss. It was these accumulated losses and debts which comprised the over $30 billion. The objective of the 2009/10 round of privatization was to extricate the Government from a continuing cycle of losses and hand over the assets to experienced people, with money to make the investments

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to make the estates profitable. Contrary to this objective, the Government found itself operating the Long Pond Factory in 2015/16 crop year and the Monymusk factory in the 2016/17 crop year. With the cessation of operations of the Long Pond Factory in 2016 and the Monymusk Factory in 2018, the Government found itself vicariously in the sugar business again, providing transportation subsidies to independent cane farmers to transport their cane to other factories outside of their area. Data provided by the Ministry of Agriculture indicate that between April 2016 and March 2020 some $806 million was expended by the Government on these interventions. In the end these expenditures only provided short term relief, with no enduring impact on the industry. The history of Governments’ intervention in the sugar industry over the years, in terms of expenditure of financial resources, unfortunately, though enormous in quantity, have not result in any fundamental change in the industry, although keeping people employed. It might have been easier to give the workers a direct cash payment on a periodic basis. Truly, Government must stay away from the production aspect of the industry. But how about Government’s policy role? Creating an Enabling Policy Environment While the Government way intervening in the production side of the sugar industry, post divestment, as outlined above, it was somewhat lethargic in creating the policy environment so indispensable for the diversification of the product base of the sugar industry. As outlined in Chapter 6, the JCS articulated a clear vision of a restructured private sector led sugar industry, diversified into a range of sugar and energy products from the sugar cane. Specific targets were set for sugar, molasses and ethanol, with refined sugar and energy from cogeneration in the mix. What the Government seemed to have forgotten is that proactive, deliberate policies were required to support the development of the newer products contemplated in the energy sphere. The Government was spot on in identifying energy products as a critical part of a new industry going forward. A 2005 Study conducted by Loy and Coviello on behalf of UN/ECLAC on the potential of renewable energy in Jamaica, identified Jamaica’s sugar industry as possessing tremendous potential in terms of providing biomass for cogeneration, as well as for the production of ethanol for the local transport industry. The study pointed to the need for expansion in sugar cane production to

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accommodate ethanol production, and investments in modern high pressure boilers to facilitate cogeneration. More importantly Loy and Coviello (2005, 63) pointed to the need for fiscal incentives and the need for a clear regulatory regime as critical prerequisites for these developments: obstacles and deficits exist mainly in the regulatory area and with respect to financial issues. Inexistent or imprecise legal formulations and the lack of financial and fiscal incentives or the lack of economically sound contractual arrangements can jeapordize investor engagement and create incalculable risks.

The authors of this study coordinated closely with the Ministry of Energy and therefore it would have been assumed that the Government would have been guided by its recommendations. The Government promulgated the Energy Policy in 2009, with a goal of increasing the contribution of renewables to Jamaica’s energy consumption to 30% by 2030. However, despite setting specific targets in the JCS, the Government was not deliberate in its actions in enabling the sugar industry to contribute to its renewable energy targets. While the Government promulgated an E-10 mandate to substitute up to 10% of ethanol in gasoline, no deliberate policy action was taken to incentivise the sugar industry to rise to this challenge. This is contrary to the observation of Loy and Coviello (2005, 65), that “subsidies and fiscal benefits can lower the threshold for investments”. Jamaica has long been engaged in the business of dehydrating imported hydrous ethanol imported from the EU and Brazil and export the resultant anhydrous ethanol duty free to the United States under the Caribbean Basin Initiative. It would seem that it was from these sources that the Government intended the E-10 mandate to be met. The players in the sugar industry were never engaged to ascertain what support they required to produce ethanol to respond to this national mandate. In the area of cogeneration, all the sugar factories had long been engaged in cogeneration, using bagasse in order to provide energy for their factories. The potential for cogeneration to produce excess fuel for sale to the national grid could be considerably enhanced with the installation of high pressure boilers. PCSC did exactly that in Frome and Monymusk, while Golden Grove Sugar Company was way down the road in designing a cogeneration plant, with a view to ‘wheel’ energy from the proposed plant in St. Thomas to their other manufacturing entities across

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the island. Everglades Farms Limited also had plans to engage cogeneration using bagasse and another biomass. All these initiatives were stymied by the difficulty to secure an appropriate power purchase agreement from the JPSCO, which had a monopoly in electricity distribution. In Jamaica’s institutional arrangement, the Ministry of Energy/Cabinet deals with policy, the Office of Utilities Regulation (OUR) sets tariffs, and the JPSCO, the national utility, contracts with power producers for purchasing of power for distribution. The OUR insisted that its approach to tariff setting was the use of the avoided cost principle, that is, the tariff to be offered to independent producers of renewable energy must be lower that JPSCO’s own generation cost, so that the consumers will not pay more for electricity. Many countries in the world however promote the use of feed-in tariffs, that is, offering fledgling producers of renewables a tariff sufficient to recoup their investments. Both the Government and the OUR refused to entertain feed-in tariffs. Rather, the argument advanced by the Government is that through competition JPSCO could procure renewables from other sources cheaper. In 2012 the OUR, consistent with Government policy and mandate issued a request for proposal for 115 megawatt of energy from renewable sources. In countries such as Mauritius, where the sugar industry is important, feed-in tariff schemes have been extended to small scale producers of renewables. In 2010 Mauritius offered a feed-in tariff scheme to procure some 2 megawatt of new generation capacity, which was extended to 3 megawatt in 2011. This is consistent with Loy and Coviello (2005, 65) recommendation of subsidies and fiscal benefits to support fledgling producers of renewables. Despite pleas from interests in the sugar industry to have the Government approve some kind of feed-in tariff, this was never acceded to. The Government’s predominant consideration was cheaper electricity to consumers, and therefore would not mandate a higher tariff for the sugar interests, above what JPSCO was offering. Of course there was the issue of the sugar industry not being able to supply electricity uninterruptedly throughout the year because of the seasonal nature of sugar cane harvest and bagasse supply. Again countries like Mauritius have been able to solve this issue by incentivising bagasse storage and the use of other biomass and coal during the sugar industry’s off season. Equally frustrating was the inability of sugar interests to secure a favourable ‘wheeling’ tariff. In fact, OUR only signed off on a methodology for determining wheeling tariffs on March 17, 2020, and although there are now 4 applications

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for wheeling, no licence/PPA has yet been issued. Notwithstanding the Government’s desire to have electricity rates low for consumers, its lack of accommodation of the interests of the sugar industry, in the face of the JCS which promotes diversification of the sugar industry into energy, represents a major case of policy incoherence. The truth is electricity rates have been declining in Jamaica, and theoretically feed-in tariffs could have been set for the sugar industry with built in mechanisms for them to be reduced over time as the industry becomes more efficient in its cogeneration operations. Managing Sugar Lands Post-Divestment While the Government demonstrated considerable foresight in disposing of sugar lands by means of lease, rather than outright sale in the privatization process, it clearly did not have a contingency plan to engage and manage those lands in case of a failure of the divestment. The Government of Hugh Shearer in the 1970 was similarly gripped with inertia when Tate and Lyle exited the cane production segment of the sugar business, and handed over 45,000 hectares of cane lands to the Government. The Michael Manley Government, which assumed power in 1972 hesitated for another 2 years, before it embarked on the cooperativization experiment. The sugar industry however, particularly in the rich alluvial plains of South St. Catherine and Clarendon possesses the most fertile, easily mechanizable lands in Jamaica. In North Trelawny and Central and Western Westmoreland, the industry commands the largest and flattest tracts of lands. The strategic nature of these lands and their criticality to the nation’s food security must never be lost on any Government. Despite the strategic nature of these lands, the Government seems to be at a lost on how to manage and engage these lands once they were handed back to it after the failed divestment exercise. Some 29,000 hectares of lands were handed back to the Government by PCSC in Bernard Lodge and Monymusk areas, and including 8000 hectares by Everglades Farms Limited in Northern Trelawny. The Government has not sought to develop a master plan for the utilization of these lands based on land capability assessment. Instead, what has transpired has been a sort of random and sporadic leasing of small portions of these lands for agricultural production, and large trunks sold to private developers for housing developments. The Prime Minister himself announced in 2018 the proposed development of a new town on some 4677 acres

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of the Bernard Lodge lands, representing some of the most fertile soils in Jamaica, outfitted with irrigation infrastructure. On the agricultural side, 400 acres were leased to the owner of a major supermarket chain in 2018, to produce vegetables in greenhouses and in partnership with small farmers in a sort of mother farm/satellite farm framework. Three year later, not even 10% of these lands have been utilized, no greenhouse is up and running, and the partnership with small farmers seems to have been abandoned. Similarly, in early 2020, the Minister of Agriculture announced with much fanfare the leasing of 3000 acres of Inswood former sugar cane lands to a group led by business mogul Michael Lee Chin to develop a mega farm, using Israeli technology to establish mango orchards and to grow a range of vegetables.3 This enterprize has seemingly been almost abandoned with the growing a very small area of vegetables and irish potatoes. At the same time, there has been numerous and highly publicized protests from small farmers, complaining of efforts to push them off these lands to facilitate housing developments in the Bernard Lodge area. In Inswood, early in 2021 there were similar complaints in the media about former sugar workers forced out of their houses to be relocated to other areas, again to facilitate housing development. In the St. Thomas area, as well as in Trelawny independent cane farmers have similarly protested about lack of access to cane lands and tensions between small farmers and larger farmers for land. At the centre of these tensions has been the SCJ Holdings, which manages these lands on behalf of Government. Clearly, access to lands by sugar workers and farmers remain a big issue in Jamaica nearly 200 years after emancipation. The Government has a moral obligation to right the historical denial of access to lands by those who have toiled for so long in the sugar industry.

Revival of Sugar Industry Possible? Critical Success Factors Pan Caribbean Sugar Company and Everglades Farms Limited, two of the three new players in the sugar industry after the 2009/10 round of divestment, both pointed to the erosion of preferential prices in the EU market as a critical factor in their failure. The fact of the matter is by

3 Per The Gleaner of 2020 February 11.

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the time these players entered the industry the erosion of the preferential prices had already began. While it is true that since September 2017 the EU prices began to approximate the world market price, the writing was clearly on the wall, and it was the very erosion of these price as a result of EU sugar market reforms, which triggered the privatization process in the first instance. Clearly, the loss of preferential prices was bound to affect the industry and its operatives. However, the whole point of the JCS was to restructure the industry through increasing production, productivity, introducing product diversification and activating new streams of revenues. A review of the performance of the industry since divestment reveals that this largely has not happened, despite evidence of significant investments. Can the industry be revived and what are the critical success factors if there is a possibility of revival? According to data from the SIA, since the commencement of privatization in 2009, sugar production declined from 125,818 tonnes from 26,300 hectare and involving 7 factories to 43,947 tonnes from 11,423 hectares involving 3 factories in 2020. Over this 11 years period cane and sugar yields declined from 50.7 T/Ha and 4.78 T/Ha in 2009 to 45.4 T/Ha and 3.85 T/Ha respectively in 2020. At the same time, the number of farmers in the industry has declined by nearly 300%, from 6320 farmers in 2009 to 2735 in 2020. The data clearly show that Jamaica is faced with a serious productivity issue in sugar cane and sugar production. Even before any issue of price, diversification and new markets enters the discourse, the most fundamental issue to be addressed in the sugar industry is the matter of productivity. This was supposed to be a key focus of the new owners of the industry in the aftermath of divestment. As shown from the analysis earlier on in this chapter, the focus of the new owners in terms of investment has overwhelmingly been on rehabilitation of factories, with very little emphasis on cane expansion and improving yields in existing fields. It would seem that new owners somehow expected the independent farmers to supply all the cane, without the commensurate technical extension support to farmers, and sufficient funding for cane expansion. As reported in Chapter 8, while independent farmers in the Monymusk area increased their production of cane from 69,431 tonnes in 2011 to 167,842 tonnes in 2015, the estate’s production declined from 219,892 tonnes to 85,569 tonnes over the same period. Since Tate and Lyle exited the unprofitable cane growing side of the business in 1970, it would seem the practice continued in

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the last round of divestment to leave the least profitable segment of the sugar business to the farmers. Yet a sustainable and profitable industry can only subsist with a high level of productivity of cane growing. The sugar business is so configured that to be successful, factories need a steady and abundant supply of good quality cane. Successful diversification is built on a strong sugar cane base. The management of the highly successful Worthy Park Estates indicated that if sugar productivity is below the 6.75 T/Ha threshold, the sugar operation cannot be profitable. It is noteworthy that since 1962 Worthy Park only fell below this threshold once, in 2016, while the Jamaican industry on the whole has consistently been below that threshold since 1975. Clearly addressing productivity is an important imperative for the industry. The sugar industry with a production of 43,947 tonnes of sugar in 2020 has in fact right-sized to about the level of domestic consumption of brown sugar. With export of raw sugar to the EU being no longer a viable option, any expansion of the industry can only be on the basis of product diversification and a focus on the regional market. Jamaica simply cannot export sugar to the world market, because of its high cost of production conditioned by its relatively small size and low productivity compared to the more efficient producers in Latin America, particularly Brazil. Based on current capacity, the SAC estimates regional production to be between 450,000 and 500,000 tonnes of brown sugar, with regional consumption at between 250,000 and 300,000 tonnes, of which 120,000 to 170,000 tonnes being imported white sugar for industrial use. As the sugar industry in the Caribbean continues to right-size, it seems the focus has to be on continued production of consumption grade brown sugar for regional consumers which the regional industry is already supplying, and a shift to producing white/plantation white sugar to replace imports for industrial use. LMC International in a 2017 study conducted for the Inter-American Development Bank on implementing a regional sugar market for CARICOM, pointed to the widespread government support of sugar industries around the world due to the challenging nature of the world market for sugar. According to LMC (2017), the support of CARICOM through the uniform application of a 40% Common External Tariff (CET) on all sugar imports, is critical for the survival of the regional market. This duty is applied strictly on brown sugar imports, which allows the regional sugar industry to supply the region’s demand for brown sugar. However, the same 40% CET is not applied uniformly across the region

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on imported white sugar for industrial use. Furthermore, even where the 40% is applied, countries routinely seek a waiver from the CARICOM Secretariat of the duty. The fact is, the region traditionally was not incentivized to produce refined sugar for the region, as exports of raw sugar to the EU at preferential prices was more lucrative. In the current dispensation, Belize has invested in the capacity to produce plantation white sugar for supply to the CARICOM. According to LMC (2017) this grade of sugar can be substituted for white sugar in the manufacturing of drinks and soda, as now practised in Mexico, Belize and India. However, some modifications would be required on the part of industrial users, at an additional cost. Trinidad and Tobago and Jamaica are the largest users and importers of refined sugar for manufacturing. The manufacturers in these two countries have so far rejected a SAC proposal to CARICOM to strictly and uniformly apply the 40% CET on imported refined sugar, as obtains for imported brown sugar, to give the Caribbean sugar industry the support it requires to diversify into the production of plantation white sugar. This resistance has come despite the LMC (2017) indicating that the impact on prices of manufactured goods would be modest. Not only has SAC presented a proposal to the Ministerial Committee on Trade and Development of CARICOM for the uniform application of the 40% CET,4 but it has supported Belize in a legal action brought against Trinidad and Tobago, St. Kitts and Nevis and CARICOM in relation to the non-payment of the CET on imported white sugar by manufacturers in those countries.5 There has so far been no decision by CARICOM on SAC’s proposal. If SAC’s proposal for the uniform and strict imposition of 40% CET on extra-regional white sugar imports is acceded to, it would certainly incentivise the Jamaican sugar industry to invest in production of plantation while sugar, as Jamaica on an annual basis imports 70,000–80,000 tonnes of refined sugar. The reticence of member states of CARICOM to consider this proposal is in stark contrast to the bold actions of Governments of many other sugar producing countries all over the world to secure their domestic and regional markets. Mauritius for instance has been able to successfully transition its sugar industry away from producing

4 Per Position Paper of SAC entitled Reforming the CET For A Sustainable Future for the Caribbean Sugar Industry. 5 Per interview with Mr. Karl James, Chairman of SAC, 2021 January 6.

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raw sugar to refined sugar, with a significant proportion of that sugar going to the domestic and regional markets. Belize was extremely proactive in installing capacity for and been producing plantation white sugar, which it now exports to Europe, at US$600 per tonne, according to the Chairman of SAC, Mr. Karl James. The CARICOM market however would have been even more lucrative for Belize. Any appreciable expansion of the Jamaican sugar industry to produce above the size of the domestic market and regional export of brown sugar, is hinged on unlocking the regional market for refined sugar and diversification into energy. This would require investment in refinery capacity, cogeneration facilities and the re-engagement of now abandoned cane lands to increase sugar cane production. The Government from time to time over the last few years point to new private sector interests in the Monymusk Factory, and the owners of both Golden Grove Sugar Company and Everglades Farm Limited have indicated their efforts at finding new investors to buy their respective factories. While this is theoretically possible, very little has been said about the strategy to fund the growing of cane by independent farmers to supply these factories, particularly against the background of a significant attrition of cane farmers from the business. The funding of cane growing will be necessary, but not sufficient. The industry must focus on raising productivity through more effective irrigation practices, quality extension service to farmers, better and more timely application of inputs and the development and deployment of high yielding varieties. Equally important is the need to urgently restructure the cane payment formula to allow cane growers to appropriate some of the revenues of the new products which will emerge from the energy side of the business. Research in new varieties of cane with more fibre is also indispensable to support the energy aspect of the industry. It goes without saying that Government would have to take a more proactive and deliberate stance in putting in place the appropriate policy, legal and regulatory framework to support refining of sugar and the development of the energy side of the industry. Many senior operatives of Government and the wider political establishment have been ambivalent, lukewarm and even openly dismissive of the sugar industry because of its association with slavery and poverty. Many countries have however demonstrated that properly organized, the sugar industry can be profitable and make a positive contribution to rural development and environmental sustainability. Since the gradual demise of the industry

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since the last round of privatization, no Government has articulated a plan or a vision to extricate the thousands of people who depended on the industry from poverty and crime to which these communities have descended. At the same time, good agricultural lands are increasingly been converted to housing. Jamaica is a small country, therefore only a viable export crop can sustainably occupy these vast tracts of lands, as the small Jamaican market cannot absorb production from such huge areas. A new partnership must be forged between Government, private sector and farmers to give the ailing industry a chance at revival.

Conclusion The reform of the EU sugar regime in 2006 and the consequential lowering of the export price paid for Jamaican sugar in that market was expected to have negative impacts on the industry in Jamaica. However, through the promulgation and implementation of the JCS, it was the expectation that this setback would serve as a catalyst for the restructuring of the industry. Privatization of Government’s holdings in the industry was supposed to trigger investments in the rehabilitation of the decrepit and inefficient factories, improve cane productivity and expand cane production to usher in the diversification into new energy products, as well as refined sugar. These new investments, combined with technical expertise and management were intended to give a life line to an ailing industry, stimulating economic activity in SDAs, even while the Government through the sugar transformation programme was working to improve social conditions. The privatization brought early hope to the industry from the stand point of the reputation of the new owners and substantial new investments. The investments however, were largely confined to the factory side of the operation. Notwithstanding the valiant response of the independent farmers, establishing with the support of the Government’s Cane Expansion Fund, over 12,000 hectares of new cane between 2009 and 2015, cane production on the whole declined considerably, because of the less than enthusiastic embrace of the field side of the sugar business by the new owners. The failure of all the new owners to grasp the critical nexus between the field and factory operations in order to have a successful sugar enterprize, betrays the considerable dearth of technical expertise and knowledge of the sugar business that the new players

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brought to the table. As a result of these poor management practices, and despite substantial investments in factory operations, production and productivity has been declining rapidly in the sector since the onset of privatization. Three of the divested factories have ceased operations, as well as the Appleton factory, which had an enviable record of continuous operation, in private hands, since 1655. In the meanwhile, the Worthy Park Estates, through astute management and strategic partnerships and investments in diversification, has been able to weather the storm, ending up stronger than in the pre-privatization period. Privatization, accompanied with the sharp decline in production in the industry, have also precipitated significant changes in the institution arrangements of the sector, with the dismantling of JCPS and the scaling down of the operations of the SIA. In a sense, the industry has been ‘right sized’, producing just enough to satisfy local demand for brown sugar and limited exports to the regional market. Notwithstanding the disastrous production and financial results of the privatization process, it has nonetheless ushered in a new appreciation of the value of the domestic market, through the investment in packaging and branding of brown sugar sold in the local market, supported by the promulgation of mandatory packaging and labelling standards for sugar in the local market by the Government. The efforts of the new players to invest in cogeneration must be recognized, even if their efforts were stymied by Government’s lukewarm response in creating an enabling policy framework to bring fruition to their efforts. The entire privatization experiment confirms the extent to which the monoculture and dependency on the EU market, engendered by the long reign of the Plantation Economy Model had become so entrenched as to thwart efforts at diversification and to perpetuate an inertia on the part of Government and industry players to take bold actions to transform the sugar industry to generate wealth and improve the socio-economic conditions of thousands who depend on it. It is this embedded inertia and psychological dependency on the EU market, even in the face of the 2005 reforms, why players in the industry were slow to diversify, clinging to JCPS until it collapsed, and why Government has not been bold and forthright in enabling cogeneration, ethanol production and the expansion of plantation white sugar production for the regional market, even though the very Government promulgated JCS speaks to these initiatives. The thousands of hectares of idle lands vacated by the collapsing sugar industry and which are now falling prey to housing developments,

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the current supply of the region’s demand for refined sugar solely from imports, and the fact that few agricultural crops can effectively occupy these empty lands without creating over supply in our limited domestic market, coupled with Jamaica’s ballooning food imports bill, must serve as a stimulus for taking another look at the sugar industry. Like Mauritius and Belize, Jamaica can be deliberate in forging a partnership among private sector, Government and independent farmers to create a viable industry, built on improved productivity, diversification of the versatile product base of the sugar cane, and tailored to satisfy the domestic and regional market.

References Craton, W., & Walvin, J. (1970). A Jamaican plantation: The history of Worthy Park 1670–1970. University of Toronto Press. Government of Jamaica. (2009). Jamaica’s national energy policy, 2009–2030. Ministry of Energy and Mining. Loy, D., & Coviello, M. (2005). Renewable energies potential in Jamaica. United Nations Publication. LMC International. (2017). Implementing a regional sugar market in CARICOM—An economic impact assessment. LMC International. Mordecai, J. (1967). Report of the sugar industry enquiry commission (1966), Jamaica. Sugar Association of the Caribbean. (2018, September). Reforming the CET for a sustainable future for the caribbean sugar industry (SAC Position Paper).

CHAPTER 10

Discussion and Policy Implications/Recommendations

Discussion This work has traced the origins of the plantation system within which Jamaica’s sugar industry developed, established the factors that supported that system and the enduring features of that system namely, monoculture, exclusive export orientation, supporting the interest of a small number of people, largely resistant to change and creating and entrenching deep dependencies and a dysfunctional society, characterized by weak institutions and family structures. The development of the Jamaican sugar industry has conformed to all the characteristics of this plantation system, been influenced by all the factors that shaped it, and has exhibited all the impacts of the system even to the present time. Monoculture and dependency on the protected market of the Britain/EU have been an enduring feature of the sugar industry through slavery, colonialism and independence. The entrenched nature of this dependence is demonstrated most powerfully by the inability of an independent nation to diversify the product base of one of the most versatile crops on Earth, create new revenue streams, satisfy its own domestic and regional markets and comprehensively develop the communities, long dependent on the sugar industry. Indeed the mandate of national independence for a nation shaped by the plantation system, must be to change

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what Beckford (1972) referred to as the institutional environment, deconstruct the pillars of the plantation system in order to construct a new society, based on economic diversification, creation of social stability and engendering confidence in the future. However, the significant windfalls from the artificially high prices in the British/EU market which subsisted throughout the twentieth century into the early twenty-first century were never used to retool the sugar enterprize for greater efficiency and sustainability, nor to diversify the economy. So dependent was Jamaica, the Caribbean and indeed the entire ACP on preferential terms of trade for their sugar, that they were completely gripped by paralysis, even as the dark clouds of trade liberalization were gathering from as early as the Uruguay Round of the GATT negotiations, which commenced in 1986. Perhaps the most profound and sobering reality of the deep seated dependency engendered by the plantation system, is how it has affected a sugar dependent community. The empirical findings of this work not only confirm that the legacy of the plantation system is still deeply entrenched in the Monymusk SDA but reveal that the various interventions under the JCS were not successful in dismantling the dependency that the plantation system engendered. In this context, it is noteworthy that Girvan (2009) asserted that the plantation system economic dependency theory is still relevant today, given the clear evidence of its features still prevalent in the Jamaican economy. Chapter 7 shows that in the 2008/10 before divestment, between 30,000 and 40,000 people were still living in estate housing in the Frome, Monymusk and Bernard Lodge Estates, of which only 33% had any legitimate connection to the estate as either current or former employees. A whole 66% were second and third generations of estate employees and informal settlers who had no connection with the estates, inhabiting dilapidated houses with amenities way below the standard of decent living. The levels of unemployment among these people range between 30% and 40%, compared with the then national average of 12%. Among redundant workers, the situation was analogous, with only 29% of them finding new employment after redundancy. Further, the prospect of finding employment for these former workers, outside of the sugar industry, was not encouraging with only 30% of these former workers attaining secondary education. After over 300 years of slavery and colonialism and over 40 years of independence, this is a picture of hundreds of people literally tied to estate living, with the estates not only providing utilities, but schools, clinics, and sporting facilities, and more importantly, they were

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not equipped with the education and skills to liberate themselves from this dependency. The prevailing social and economic conditions in the SDAs, as well as the general dependence of whole communities on the sugar industry, warranted radical action on the part of the State, to ameliorate the situation, through the JCS. Given the historic singular focus of addressing only the economic dimension of the sugar industry in previous interventions as outlined in the Chapter 4, it was significant that the Government adopted a seemingly sustainable development approach with the JCS, with the objective of achieving economic diversification, building social resilience and attaining environmental sustainability in the SDAs. Indeed, this is consistent with the three dimensions of sustainable development and the imperative of building all kinds of capital–economic, human, social, and environmental (Ekins et al., 2007), required to create the flow of goods and services necessary to satisfy human needs and increase well-being. The inclusion of environmental sustainability as a specific objective is significant, as this is the pillar of sustainable development most neglected by governments in independent Jamaica. No doubt the insistence by the EU for environmental issues to be addressed in the adaptation strategies to be presented to it for funding, would have influenced this sustainable development approach by the Government in its JCS. In examining the implementation of the JCS, it is clear that as lofty as the objectives were, the empirical evidence is that after 15 years of implementation, the Monymusk SDA was worse off almost on all fronts. Sustainable development was clearly not achieved. On the economic side, privatization as a strategy to turn around the fortunes of the Monymusk Estate was an abject failure. As shown in Chapter 7, production of sugar from the estate declined by 72%, from 28,668 tonnes in 2010/11 (the year before privatisation), to 8105 tonnes in the 2017/18 crop year, the last year in which the factory operated. To the extent that sugar remained the major economic activity in the Monymusk SDA, as confirmed by the SDC’s development profiles of the area in 2015, this reduction in sugar production would have dealt a devastating blow to the local economy and livelihood of the people. Indeed, after 10 years of JCS implementation, unemployment among redundant workers was a significant 58%, even higher than obtained in the wider Monymusk SDA, where the SDC development profile for the area (SDC, 2014) indicates general unemployment of between 42.3% and 52%, and way above the national unemployment figure of 13.7%, reported

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by STATIN in July 2015. According to Stiglitz et al. (2009), unemployment has negative implications beyond the mere loss of capacity to acquire goods and services. Unemployment affects people’s perception of their sense of self-worth, breeds anxiety which can impact health and affect entire communities. In this context, according to Stiglitz et al. (2009), subjective indicators to measure people’s experience and feelings are in order to get a full appreciation of how unemployment affects well-being. In this regard, the case study in the research is most revealing. People reported being anxious about the impact of the poor performance of the factory, not only on their direct employment, but on the overall quality of their lives with respect to access to utilities, schools, clinics, recreation, school attendance, and every aspect of community life. The high dependence on sugar for employment, therefore, compounded the impact of reduced employment occasioned by the estate’s performance. The anxiety was common among all five categories of people interviewed in the case study. They were not only anxious about their present condition, but equally, they were apprehensive about the future and were not optimistic of a brighter future without a vibrant sugar industry. In the wake of the failure of the privatized sugar estate to increase production, and hence maintain a level of economic buoyancy in the SDA, it is particularly disappointing that the intervention of the JCS did not advance the objective of diversification. The government’s main initiative to promote agricultural diversification was its Agro-Park Programme. Under this programme, the Government spent nearly $300 million to establish two agro-parks in the Monymusk SDA, comprising over 3000 acres of land. However, a close examination of the distribution of these lands shows that, predominantly, the beneficiaries were not from the Monymusk SDA, but rather professionals from outside the area, for whom farming is a part-time endeavour. Even worse, based on the information from Agro-Investment Corporation, managers of the agroparks, a significant portion of these lands is still not in production. The programme was, therefore, not sufficiently targeted to absorb vulnerable displaced sugar workers. This confirms the inability of the productivism model of production, while underpins the Agro- Park model, to transform the lives of small farmers and contribute to rural development. More customised solutions should have been devised for these displaced cane farmers, in full consultation with them, and taking into account their capabilities and interests.

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The educational profile of the SDA in 2016 did not change significantly with the implementation of the JCS. In 2008 only 30.4% of redundant workers attained secondary education. In 2016, the comparative figure was 30.6%. The expenditure of some $24.5 million on skills training for some 186 people in the Monymusk SDA did not seem to target the most economically vulnerable, that is, redundant workers and residents of estate housing. This low level of education and prevalence of unskilled personnel will render a large part of the population of the SDA incapable of transitioning to new forms of economic activities or to be employable outside of the sugar industry. Failure to build the human capital will, therefore, inhibit the residents of the SDA to advance themselves economically. More significantly, unless and until the educational profile of the SDA changes, poverty will be perpetuated through succeeding generations, reinforcing the dependency nurtured by the plantation system. In relation to the social dimension, it can also be concluded that Monymusk SDA was worse off after the JCS implementation. Notwithstanding the expenditure of nearly $400 million of a variety of social projects such as school and clinic rehabilitation and expansion, community centres and sporting facilities, not only were the residents of the SDA not aware of these interventions, but they indicated that their quality of life worsened. The empirical data show that there was marked improvement in resident’s ownership of their own houses as well as improvements in the indicators of access to water, indoor plumbing, and electricity, courtesy of the over $480 million expended on the construction of new houses and lots, by the Government, which were distributed free of cost. Despite this positive development however, 79% of the residents felt that their quality of life was either worse off or about the same. It is also the case that over 1171 redundant workers received grants to cushion the impact of redundancy, yet their perception was that the quality of their lives did not improve. These findings highlight the necessity and importance of incorporating subjective indicators of people’s experience and feelings in assessing sustainable development and its impact, as advocated by Stiglitz et al. (2009). Statistics must measure what matters to people. In the instant case, the expenditure of huge sums of money on housing and social infrastructure did not improve people’s personal circumstance, as they were largely rendered unemployed by the redundancy exercise associated with privatization and by the significant reduction in the production of sugar on the estates, which was the mainstay of the entire

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SDA. Indeed, the case study amplified the impact of privatization and reduced production of the estate, as participants in the case study related the downturn in economic and social activities in the SDA (shops, nightclubs, fishing, taxi service, school attendance, etc.) to the decline of the estate. This again reaffirms the observation of Stiglitz et al. (2009) that the impact of unemployment far transcends the immediate loss of livelihoods. In the face of these realities, it is a further failure of the JCS to have distributed most of the grants in cash, rather than in the form of goods and services that would have enabled the beneficiaries to earn a living. Some 91% of redundant workers received cash grants of between $120,000 and $150,000, as opposed to 1.1% who received support in the form of animal and animal feed. It is noteworthy that only recipients who received grants in the form of animals and animal feeds had a positive perception as to the contribution of the grants in increasing their wellbeing. The cash grants were seemingly expended on consumables, rather than invested in economic activities capable of sustaining the recipients. This study, therefore, shows that expenditure on social amenities is necessary but not sufficient in improving quality of lives. In the final analysis, what people want more than anything else is the capacity to earn through decent employment and investment in sustainable enterprises. In relation to the environmental dimension, the natural capital of the Monymusk SDA was eroded relative to the pre JCS intervention. This is borne out by worsening water quality, as evidenced by higher levels of various parameters of water quality in the Rio Minho, the greater variability of these parameters, and the fact of them exceeding in the post JCS period ambient and trade effluent standards. There was also poor compliance by the new owners of the estate, who failed to comply with critical environmental regulations. In fact, the factory had not obtained the necessary licence to discharge trade effluent in water ways up to the point of its closure in 2018. What is of greater concern is that the environmental parameters were worsening at a time when there was a dramatic reduction in production. This of course highlights the worsening environmental management of the estate in the post divestment period. The issue of the burning of cane also continued unabated, with its negative impact on air quality. The intervention of the JCS did not make an appreciable dent on this issue, as in its ten years of implementation,

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the JCS supported less than 1000 acres of green cane harvesting. Furthermore, the support was in the form of under-writing the cost of harvesting, which is a one-off intervention, rather than supporting the acquisition of harvesting equipment, which would have had a more sustainable impact. It is also the case that the diversification of the industry’s activities into the production of ethanol and the cogeneration of electricity, which would have had a positive impact on the country’s carbon footprint, was never realised. Not only would these activities have helped to reduce the country’s carbon footprint, but they would have generated new economic activities, augmenting the revenue from the industry and created employment. On the other hand, production of ethanol would have generated greater levels of waste (dunder) and could have aggravated the poor water quality situation in the Rio Minho, unless there were improvements in the environmental management of the industry. From the above analysis, the implementation of the Government’s adaptation strategy failed to achieve the objectives of economic, social and environmental transformation, so critical to break the cycle of poverty and dependency entrenched in the Monymusk SDA, and bred by the plantation system. However, a greater failure lies in what Government did not do. At the heart of the failure of the JCS to achieve the objectives set, was the lack of deliberate and proactive actions to facilitate and enable the achievements of the goal. In the first place, too heavy a reliance was placed on privatization as a sort of magic bullet to solve all the structural issues that have plagued an industry for over 300 years. The thinking that divestment, ipso facto, could transform the industry, smacks of the neoliberal approach of capitalism rooted in a minimalist role of the State in economic development, and the thinking that once the economy is in private hands, benefits will automatically trickle to the poorest. This is not to make the case for the continued operation of productive assets by the State. However, the State cannot simply formulate a strategy and expect that it will be implemented in an auto-pilot mode and achieve the set objective. In this sense, even though the JCS said all the right things, in terms of objectives and desired outputs, it was lacking in concrete policy actions and prescriptions to ensure the attainment of said goals. The last round of privatization in the sugar industry could be said to have been driven principally by fiscal imperatives. Although expertise and experience in the sugar business were identified as important criteria, clearly this was overlooked. The lack of expertise was clearly demonstrated in how the new

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owners managed the enterprise and the quality of decision they made. It is noteworthy that the principals of both Everglades Farms Limited and Golden Grove Sugar Company pointed to their lack of expertise in the industry as a significant cause of their failure. The management of PCSC made similar pronouncements in the public media. Further, the divestment agreements did not have sufficiently strong provisions to ensure performance, as well as compliance with environmental regulations and protection of cane farmers in instances when a factory decides to close. Independent cane farmers are solely dependent on factories to dispose of the cane they grow. Factories likewise are dependent on cane farmers for cane supply, as throughput is critical to the viability of factories. It is for this reason farmers are registered to a specific factory, and can only sell their cane to the factory they are registered to. However, in the post divestment period, factories close at will, without due notice to farmers, who would have invested in the production of cane for the sole purpose of supplying the closed factories. Nothing was built into the divestment agreement or the regulations to protect farmers in these instances. This situation forced the Government to intervene with the provision of transportation subsidy to farmers so affected. The factories which closed abruptly should have been obliged to compensate the farmers. The area of Governments biggest failure was not seizing the opportunity to catalyse and incentivise the development of the energy potential of the sugar industry. Having promulgated an Energy Policy, with a prominent place for renewables as well as legislated an E-10 mandate, and having set specific targets for cogeneration and ethanol production in the JCS, is absolutely inexplicable how the Government could have expected the sugar industry to rise to the challenge without appropriate policy and regulatory support. Policy and fiscal support are the most potent tools available to Governments to stimulate and nurture fledgling industries. The tourism industry was developed in that manner, as well as the bauxite/alumina industry, and in more recent time the business outsourcing industry in Jamaica. What would have led the Government to believe that an industry that has known nothing more than sending raw sugar in the hull of ships to Britain for over 300 years could just suddenly switch to ethanol production and cogeneration overnight without some support. This inaction of the Government is particularly regrettable in the face of real investments by the sugar industry in cogeneration capacity and

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the pleadings of sugar industry interests for this support. The excuse that the sugar industry could not be supported with the tariff required to make their investments viable in order to guarantee affordable electricity rate to consumers is not congruent with the Government for decades allowing the monopoly of JCPS to import brown sugar and sell at astronomically high prices to the same Jamaican consumers, the profits from which benefited only those who were in the sugar industry. At any rate, tariffs could have been set in a manner to be reduced gradually, incentivising the industry to increase its efficiency over time. This approach by the Government of Jamaica was in stark contrast to the bold actions of countries such as Mauritius and Belize, which have found innovative ways to support the development of energy from the sugar cane and in the process saved their sugar industries. Could it be that the entrenched dependency engendered by the plantation system has even smitten the Government, rendering it incapable or unwilling to take bold innovative steps to reposition its sugar industry? Could it be that as a people we have been so overwhelmed with the horrific experiences of sugar and slavery, that we cannot see the potential of the industry to be transformed, and help to alleviate the very poverty it perpetuated for so long? To the extent that the owners of Golden Grove Sugar Company, Everglades Farms Limited and Monymusk Estate still harbour hopes of finding investors to take over these assets, the Government still has an opportunity to reconsider its position on the industry, particularly its energy potential, if ever new owners are found for these idle assets. The business of sugar is still worth pursuing, even if it will be circumscribed to satisfying the local and regional markets. Cogeneration can be used to satisfy the industry’s own energy requirements and earn additional income. While the industry ought not to pursue plantation white sugar at any cost, if investors are willing to produce it as efficiently as possible to supply the regional demand for refined sugar, this must at least be studied carefully, rather than dismissed outrightly. If the LMC study is correct that a 40% CET applied to regionally produced plantation white sugar will only have a modest impact on the price of sodas and juices, the manufacturing of which will consume this sugar, then it could be worth supporting, considering the benefits of expanded sugar production in terms of saving foreign exchange, effective utilization of large tracts of idle lands, employment and income for farmers, and overall rural development. It is not acceptable for CARICOM to say no, based on the stance of regional manufactures, without engaging the cost benefit analysis. Development

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of new industries demands bold actions and policies based on data and analysis and the forging of partnerships.

Policy Implications/Recommendations This work, based on the analysis of empirical data, has uncovered a number of areas that require urgent policy attention both in relation to the design and execution of social intervention programmes and divestment of government assets, as well as broader policies for economic, social, and environmental development. Firstly, while the Government was quick to articulate an adaptation strategy to avert a precipitous collapse of the sugar industry and its dependent areas, in light of the EU reforms, the strategy needed to have been informed by the lessons from the failed privatization attempts in the past, and from a more robust analysis of the challenge of social transformation given the deeply entrenched structural dependency bequeathed by the plantation system. Drawing the lessons from failed attempts at privatization in the past would have prevented the over reliance on divestment to create a strong and viable sugar industry. Like the previous attempts, all but one of the factories divested in the 2009/10 period ceased to operate, leaving large tracts of good fertile lands idle, communities plunge into deeper poverty, significant attrition of cane farmers from the industry and general economic malaise in sugar dependent areas. Therefore, the privatization framework needs to be revisited to ensure that concrete and proactive policy support is provided to investors to realize the objectives of privatization, safeguards put in place to support farmers if and when factories close, to ensure the effective utilization of vast tracts of the most fertile lands involved in cane production and to ensure specific performance targets are in place with appropriate sanctions for missing them. At the same time, it is important that the privatization exercise is not driven solely by fiscal exigencies. Government must have a broad vision for the industry and a clear understanding of the potential of the industry to be actualized by private investment, even as ample space is allowed for private owners to innovate. In this context a key criterion in selecting new investors must be the demonstrated possession of the requisite technical expertize and managerial acumen specific to sugar operations. This criterion must not only by written in requests for proposals, but must be heavily weighted in bid evaluation.

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The social interventions outlined in the sugar area development programmes should have been designed with deliberate outcomes, with targeting the most vulnerable in mind. It is not sufficient to provide grants to vulnerable ex-workers for instance, without ensuring that those grants would have contributed to the beneficiaries being able to earn their way out of poverty rather than simply facilitating one-off consumption. The vast resources spent on training seemed not to be have been sufficiently targeted to the deficiencies in the skill sets in the SDA. Similarly, although agro parks were created in the Monymusk SDA to promote economic diversification, the most vulnerable were not specifically targeted. Given the abundance of government-owned lands in the Monymusk SDA, the failure of the privatization experiment and the consequential hardship being faced by those displaced, the Government should even now deliberately engage these displaced workers and dependents on the Estate, and design in consultations with them innovative ways for them to engage a portion of these lands, after a careful diagnostic study of their interests, skill sets, and available markets. In terms of project design and formulation, there are several lessons to be learnt. In many instances, the management of the Sugar Transformation Programme indicated that the aggressive timelines set by the European Union for the achievement of project targets, which is the basis on which funds are released, did not allow for a design of outcomes that would have a more enduring impact. For instance, in order to satisfy the target with respect to the number of people trained in the SDA, people in the SDA were selected to pursue existing training programmes of the participating institutions, rather than designing special courses, tailored to the needs of the most vulnerable and taking into consideration their actual capacity to engage in training. It is also the case that grants were given to select cane farmers for underwriting the cost of harvesting their cane green, rather than installing the capacity through the acquisition of machinery and reconfiguration of small farmers’ field, to ensure the sustainability of this activity. This course of action was selected because it was infinitely easier to provide these grants for harvesting, than to create the capacity for farmers to continuously engage green cane harvesting through ownership and management of the appropriate equipment and redesign of fields to enable mechanical harvesting. If, indeed, transformation and sustainability are the desired outcomes of externally supported programmes, then the sponsors must relax

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their onerous requirements and aggressive timelines that force expedited expenditure without sufficient attention to sustainable outcomes. In similar fashion the capacity of Ministries and agencies of the Government needs to be significantly enhanced to design and manage projects of the magnitude of the 86 million euros Sugar Transformation Programme, without the pressure to attain targets within a short timeframe and the dread of missing targets and missing disbursement of funding from the EU. Programmes like these should not be about ticking boxes indicating targets are met for deliverables that have little enduring value. After all the project was about transformation, and transformation by its nature takes time. It was rather surprising that after billions of dollars of expenditure in the Monymusk SDA on grants, social infrastructure, roads, houses, etc. such a small percentage of those surveyed had knowledge of the interventions or made a connection between these expenditures and the Sugar Transformation Programme. This speaks to lack of proper consultation with the communities in the design of the projects and a communication failure on the part of the Government on what is, arguably, the largest social intervention programme in the area. The Government needs therefore to promulgate a protocol/strategy for community consultations in the design of its intervention, and a clear and effective communication strategy. Here again the aggressive time lines to implement the programme and the delays on the part of the STU to design the Sugar Area Development Programme, some two years after the establishment of the Unit, might have curtailed consultations. In relation to environmental management of the industry, government privatization strategy needs to be revisited to oblige recipients of government assets through divestment, to manage those assets in compliance with all regulatory requirements. For instance, up to the point of closure of the Monymusk factory in 2018, PCSC still had not obtained an Effluent Discharge Licence. Having obtained an Air Pollutant Discharge Licence in 2013, they have also been failing to comply with the conditions of the said Licence. Yet the enterprise continued to operate with impunity. NEPA has indicated that it is now requiring these entities to post environmental performance bonds, which will be called in instances of non-compliance to remedy breaches. This is a step in the right direction.

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The environmental impact of the JCS implementation would have been considerably greater if the JCS had realized the production levels targeted. These levels of production would have had to be matched with appropriate infrastructure, particularly irrigation. The impact of climate change underlines the need to mainstream climate smart approaches in agricultural production. In this regard, even at the reduced levels of production, this study shows a reduction in irrigation efficiencies evidenced by the frightening levels of water losses and the increased levels of pumping to produce less water. The Government needs to immediately embark on an expansive programme of canal lining and water loss reduction, as well as the provision of fiscal incentives to promote widespread drip irrigation usage, particularly in the southern Clarendon/southern St. Catherine belt. Not only will this be good for the environment, but can be beneficial to farmers in terms of lower expenditure on irrigation and improved crop yields. This study has shown that despite worsening levels of critical parameters of water quality in the Rio Minho attributable to the Monymusk Estate, saline intrusion and tidal action is a greater source of the contamination of the Rio Minho River. Saline intrusion has already rendered thousands of acres of land not suitable for sugar cane production. These lands constitute some of the best arable lands in Jamaica. Further research needs to be urgently conducted on the extent of the phenomenon of saline intrusion and tidal action, their wider impact beyond the Rio Minho, and what steps can be taken to rehabilitate the thousands of acres impaired. The erosion of preferential prices in the EU market has inflicted a significant wound on Jamaica’s sugar industry, but that wound is not fatal. Jamaica and the rest of the Caribbean will continue to consume brown and refined sugar. Although the demand for brown sugar is being satisfied by local production, there are still prospects for exporting more packaged brown sugar to CARICOM. The CARICOM market for refined sugar is still considerable, and provides an opportunity. The owners of the sugar assets now not operational, would still like to off load them to new investors, at least to recover some of the huge investments they have made in factory upgrades. It is not impossible that new investors could emerge who see all these opportunities, in addition to the enormous energy potential of the industry. Despite the missteps, the situation is not irretrievable.

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D. STANBERRY

If new investments come to the industry, Government’s role in creating an enabling environment is paramount. In this context, the following will be critical for the Government: 1. Ensuring that new investors either singly or in partnership with Government provide financial resources/loans for a massive replanting of cane by both Estates and independent farmers, as limited supply of cane continues to be a limiting factor. 2. Promoting a culture of good proper management of fields to increase productivity through better extension support to small farmers, access to irrigation and more timely payments to cane farmers so that they can procure and apply critical inputs on time. 3. Overhaul of the regulatory regime of the industry through the tweaking of the cane payment formula to include some of the new products from the cane, example bagasse used for cogeneration. 4. Accelerate the breeding of new varieties of sugar cane suitable for energy production. 5. Formulating specific policy actions to support cogeneration and the production of ethanol from the sugar cane 6. Consider and take a developmental stance on the matter of providing protection to support the production of plantation white sugar. The turning around of the fortunes of the sugar industry through deliberate actions to harvest wealth for the people, and in the process contribute to improving social well-being of SDAs and environmental sustainability, would go a far way in finally breaking the mould of deeply entrenched dependency inherited from the plantation system.

Index

A Accompanying measures, 96, 108, 114–117, 124, 163, 166, 168, 169, 193 Admiral William Penn, 44 Agenda 2000 Reforms, 89 Agro Parks, 171, 185, 186, 212, 220, 221, 227, 277 Ambient Water Standards, 159, 200 Angostura Holdings, 243 Appleton Estates, 77, 148, 243–245 ‘A’ Quota, 86 Aubyn Hill, 226 Avoided cost principle, 257

B Barker Commission of Enquiry, 1944, 22 Beach Control Act, 144 ‘B’ Quota, 86 Brussels Convention, 1902, 84

C Callaghan, George, 252 Campari, Gruppo, 243, 244 Cane Expansion Fund, 121, 172, 193, 227, 264 Caribbean Basin Initiative, 256 Caribbean Community (CARICOM), 33, 97, 106, 109, 110, 114, 118, 235, 247, 248, 261–263, 275, 279 Cartagena Convention for the Protection and Development of the Marine Environment of the Wider Caribbean Region, 146 Clarke, Robert, 246–248, 252 Clarke, Roger, 114, 115, 117, 231, 236 Clean Air Act, 144 Columbus, Christopher, 5, 42, 52 Common Agricultural Policy (CAP), 85, 86, 89, 91, 93 Commonwealth Sugar Agreement, 1953, 18, 56, 87

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 D. Stanberry, How Trade Liberalization Affects a Sugar Dependent Community in Jamaica, https://doi.org/10.1007/978-3-030-89359-0

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INDEX

Cooperativization, 5, 65–68, 70, 75, 101, 258 Cotonou Agreement, 28, 56, 87, 107, 108, 124 ‘C’ Quota, 86

D Davies, Omar, 226, 235 Demerara Distillers Limited, 155 Dependency economic theories, 13 Dickenson, Caleb, 243 Dickenson, Ezekiel, 243

E E-10 Mandate, 123, 222, 256, 274 Economic Partnership Agreements (EPAs), 94, 97, 104, 124 European settlement and rivalry, 47 EU sugar regime, 4, 57, 89, 90, 92, 94, 98, 103, 107, 119, 123, 127, 247, 264 Everglades Farms Limited, 227, 229, 238–242, 257–259, 274, 275 Everything But Arms (EBA), 88, 103–107

F Feed-in tariffs, 257, 258 Fischler reforms, 89 Fred M. Jones Farms, 228 Frome Monymusk Land Company (FMLCo), 65–68, 70, 71, 79

G General Robert Venables, 44 Goddard Enterprises, 155 Goldenberg Commission of Enquiry, 1960, 22, 56

Golden Grove Sugar Company, 168, 227, 229, 235–238, 250, 256, 263, 274, 275

H 4-H Clubs, 176 Heaven, Derek, 115 Holland Estates, 243, 244 Hussey, Andrew, 168, 228, 239, 240, 242, 243

I Industrialization by invitation, 12, 13, 63 Infinity Bio-Energy Inc., 125, 167, 168, 225, 228 Islands of sustainability, 31

J Jamaica Labour Party (JLP), 65, 167 Jamaican Cane Product Sales Limited (JCPS), 74, 79, 214, 229, 233, 236, 237, 244, 248–251, 253, 265, 275 James, Karl, 232, 237, 241, 262, 263 J. Wray and Nephew Limited, 243

K Kyoto Protocol, 145

L Lascelles deMercado Limited, 243 Lee Chin, Michael, 259 Lieutenant Francis Price, 246 Lionel Town Development Area, 174, 204–206, 208, 209 Lluidas Vale, 246 LOME Convention, 6, 9, 56, 76, 115

INDEX

M MacSharry reforms, 89 Manley, Michael, 13, 65, 67, 69, 258 Mercantilism, 47, 48, 50–53, 83 Milk River Development Area, 41, 174, 195, 197, 199–202, 204–206 Morant Bay Rebellion, 21, 54, 131 Mordecai Commission of Enquiry, 1966, 56, 63 Moyne Commission of Enquiry, 19, 22 N National Investment Bank of Jamaica (NIBJ), 73, 75 National Sugar Company Limited (NSCL), 70, 72, 73, 80, 190 Natural Resources Conservation Authority (Air Quality) Regulations, 144, 145 Natural Resource Conservation Authority (Wastewater and Sludge) Regulations, 144, 145, 154–156, 159, 191 Navigation Act of 1651, 51 New Caribbean Group, 14 New Yarmouth Estates, 243, 244 North American Free Trade Area (NAFTA), 85 P Panday, Basdeo, 110 Paris Agreement, 145 Paris Convention, 1864, 84 People’s National Party (PNP), 65, 66, 69, 74 Portland Bight Protected Area, 205 Productivism model, 5, 29, 30, 32, 270 Public Health Act, 144

283

R Richard Pandohie, 237 Rio Conference, 132 Rio Minho Watershed, 158, 195, 197 S Saline intrusion, 31, 67, 69, 143, 152–154, 192, 198, 199, 202, 203, 222, 279 Samuda, Karl, 218, 233, 240, 251 Santander Group, 113 Seprod Group, 168, 216, 228, 235–238 Shearer, Hugh, 70, 258 Social Action Centre (SAC), 67, 68, 70 Social Development Commission (SDC), 174, 185, 197, 204, 205, 269 Stockholm Convention on Persistent Organic Pollutants, 146 Stresa Conference of Agriculture Ministers, 86 Sugar Enterprize Team, 166, 167 Sugar Equalization Act, 1946, 16 Sugar Industry Welfare Fund, 132 Sugar Negotiating Team, 167 Sugar Protocol, 6, 9, 56, 76, 84, 87, 89, 91, 92, 94, 96, 97, 102–104, 108–110, 112, 114, 115, 124, 126, 237 Sugar Transformation Programme (STP), 142, 150, 163, 169–172, 174, 176–178, 180, 181, 183, 185, 186, 188, 194, 212, 264, 277, 278 Sustainable development, 5, 12, 29, 31, 34, 121, 269, 271 T Tariff Rate Quota (TRQ), 84

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INDEX

Tate and Lyle, 63, 65, 66, 69, 71, 73, 74, 77, 80, 126, 204, 214, 229, 234, 258, 260 Treaty of Rome, 1957, 85 U United Fruit Company, 65, 80 Uruguay Round Agreement on Agriculture, 85 Uruguay Round of GATT, 89, 102, 103, 107, 111 US Farm Bill, 85

W West Indian Royal Commission, 1897, 21 West Indian Sugar Commission, 1929, 55 West Indies Rum Distillery, 155 West Indies Sugar Company (WISCO), 64, 65, 72, 204 Wild life Protection Act, 144 Worthy Park Estates, 191, 244, 246, 248, 261, 265