Sugar and People RAVI DEV COLUMN

Kaieteur News
July 25, 2004

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Well, the other E.U. sugar foot has dropped. The special prices we’ve been getting for the 167,000 tons we ship to them, will be drastically slashed within the next three years or so.

I wasn’t surprised at the agitated cries about betrayal and perfidy that emanated from the W.I. Governments and sugar interests - that’s pro forma. I was intrigued, however by their wide-eyed protestations of surprise at Europe’s move.

After all, hadn’t Europe dropped the first foot over two years ago with the announcement that their sugar regime would be “reformed” - come hell or high-water? Hadn’t their Commission laid out three quite specific scenarios as possible options? Hadn’t the E.U.’s ploy of the E.B.A initiative, a signal that they were pulling the moral underpinning out from under the A.C.P.’s basket-case argument? I mean, guys who are only breaking a contract to help others in much more dire straits, can’t be all bad! Was it possible that our Caribbean political directorate and brain trust (no, they’re not the same) thought that the status quo would be preserved? Do they live in never-never land?

No they don’t. In Guyana at least, the Government, since 1998 had articulated and begun implementing a Strategic Plan for the sugar industry. Predating the EU’s manoeuvres, as it were, the plan proposed to make the Guyanese industry competitive in this millennium. Several governmental functionaries, including President Jagdeo when he was Finance Minister, defended various aspects of the Plan that we had questioned. So we must look elsewhere for the reasons of the local shock (if not awe) at the European move.

I believe that the major reason for the expressed astonishment arises in the Government’s refusal to be totally open with their sugar plan from the very beginning. Rather than having the people of Guyana, especially the sugar workers, understand fully the consequences of the sugar plan for the country and the workers they kept on insisting that the plan would make everyone live happily ever after.

The PPP, of course, were keeping their eyes on the electoral implications of downside risks inherent in the plan on Indian sugar workers. The PPP was insisting that GUYSUCO had to modernise, raise production and cut costs for the industry to meet imminent challenges. They simply didn’t want to spell out, however, that those strategic moves would eventually place all the burdens on the workers. So now that even the dour projections of the plans are been exposed as based on faulty premises the Government has to feign surprise at Europe’s “infidelity”.

Very ironically, the very political fallout that the Government is trying to avoid, was occasioned by an identical act of sugar’s British market over 150 years ago – removing their preferences for W.I. Sugar. Most of us have forgotten that the real reasons for the abolition of slavery and the beginning of indentureship weren’t acts of philanthropy but acts of economic expansion to be furthered by free trade. The old “Mercantile System” in which British traders took British-made baubles, exchanged them for slaves in Africa, sold these in the New World and bought “exotic” products such as sugar, coffee and tobacco back to Britain, had run its course.

British industry had grown large on the backs of slavery and Empire and needed vaster markets. Free Trade was to be the New World Order.

We should be reminded that in that first re-ordering of trade arrangements that should have forced reform of the industry in the W.I., Britain also didn’t liberalise totally in one fell swoop. They first announced that they wouldn’t buy sugar from any slave trading state – they followed up, of course, with the abolition of slavery. They undercut planters’ resistance by taking the moral high ground, as with the EBA of today. The abolition of slavery presented all involved with the opportunity to ponder the future of W.I. sugar without protected markets. What was to be done? Invest in new technologies? Abandon the industry? Seek new labour to exploit? It should be noted that the planters received compensation for the loss of their slaves, so that they had the wherewithal to exercise some of the options mentioned.

We know that in Guyana, the planters chose to invest in new factories while importing huge numbers of indentured labourers to depress the wage rates sought by the freed slaves. This is a point we have been emphasising elsewhere that now has increased relevance in the present. Does all of this sound familiar today? Europe demanding free trade and our modern planter class (the PPP government) insisting on new factories and cheap labour? How had we have come a full circle? What had happened to the free trade regime that followed the Sugar Duties Act of 1846? How come we became dependent once again on protected markets? Did Britain (perfidious Albion?) realise the folly of her earlier betrayal and came to the rescue, her imperial children? Hardly. Once again the change came about because it suited European interest.

After the two world wars in the 20th century, Britain had backed off “free trade” and reintroduced preferences for Colonial sugar for purely pragmatic self-interest - because it wanted to remove rationing of sugar in its home markets and the sugar would be paid for in sterling that it could simply print.

It saved foreign currency while it made the British “cuppa” a bit more palatable to its war ravaged population. We should be reminded that Europe accepted the Commonwealth Sugar Agreement between Britain and ACP in 1975 for the same pragmatic reasons. The effects of the 1974 five-fold spike in sugar prices were still stinging and Europe was not then self sufficient in sugar production. Government to government agreements for supplies were very much in the air – OPEC has just nearly brought down the whole economic edifice of the West. So we had the Sugar Protocol which, as our policy makers are so fond of reminding us, was to be of “infinite duration”.

Today as Europe once again goes down the free trade route to secure greater markets for their products, let us understand that the recent proposals on price cuts is the start of what will be an eventual abandonment of all preferences with ACP on sugar. Nothing is infinite – even time. It’s another wake up call for us to cogitate on the future of our sugar. Let us not be partisan. Europe will do what it has to do to push Europe’s interests. Let us put our interests first.

Once again the workers are being asked to bear the costs of adjustment; loss of many “custom and practice” benefits; loss of API. (Oh, this will go!); sharing non-existent “profits” that they have no control over; increase in temporary workers; non-living wage out of crop work. (Remember the home-alone children?) This cannot stand.

(To be continued)