Sugar study important

The Editor, Sir:

Allow me to respond to your Letter of the Day published June 10, titled 'Studying sugar to death', penned by Mark Clarke.

Clarke makes the point that the industry has been studied ad nauseam, but, with respect, he misses the point. It is true that the industry has been studied many times in the past; however, there have been radical changes in the EU Sugar Regime which started in 2006.

There has been a 36 per cent reduction in the price for our sugar exports to the EU over a four-year period, and as if that was not enough, the Sugar Protocol under the Contonou Agreement was terminated with effect from September 2009. The reduction in price from the EU require significant improvements in efficiency and productivity if we're to continue.

Fundamental changes

We felt, therefore, that with such a drastic price cut the sector could only survive if we undertook fundamental changes to the way sugar production is organised in Jamaica. These changes involve the exit of Government as a major player in production and operations, retooling of factories and improvements in cane yields, as well as full utilisation of all the possible by-products that this versatile crop can produce. These considerations essentially informed the Government of Jamaica's Sugar Adaptation Strategy, which was presented to the House of Representatives in October 2005.

Other changes in the external environment heralded by the end of the sugar protocol in 2009, under which Jamaican sugar exports to the European Union enjoyed both preferential access and price, is another critical reason that necessitates a review of the sector. The changes, therefore, made it imperative for us to re-examine the sector. The public is well aware of the Government's drive to divest the sugar estates. So far, we've divested two of five, and remain committed to that process.

Furthermore, the review is also part of conditions for the disbursement of EU grant funds to the Government of Jamaica.

Indeed, while we are agreed that there have been many studies done in the past, the most recent changes require a review of the framework for the 300- year-old industry. These fundamental changes in the sector warrant a comprehensive review of the regulatory, marketing, pricing and institutional arrangements framework.

Against this background, Cabinet approved the appointment of a three-man Commission of Enquiry. The hearings will commence in earnest shortly and we expect the recommendations of the commission by the end of September 2010. It is our expectation that these recommendations will provide the framework for a new, robust, prosperous, multi-product sugar cane industry, led by the private sector.

I am, etc.,

Christopher Tufton

Minister of Agriculture and

Fisheries