The death of sugar

It was bound to happen, given the prevailing political climate and the bankruptcy of ideas from economic strategists and analysts. But it didn't have to end this way.

Sugar made our nation. It was an industry born from and nourished by slaves and indentured labourers whose descendants continued to nurture it long after we became a nation. And the disturbing question about the industry ever since it became a fully owned state enterprise in 1975 has been this: why was it a political pawn that was never allowed to develop along sound management and business principles?

Almost everybody uses the most simplistic justification. It's too costly to produce sugar; the industry needs too much government subsidy to survive, so why bother?But is that really the case?Or is it that nobody – including the UNC, which was spawned from the sugar community – seriously wanted sugar to survive or become self-sufficient?

Government policy, it seems, was to keep the industry and the large community it supported, in a state of permanent dependence so those who depend on sugar would be grateful with their votes.

As the late Ronald J. Williams once remarked, "We bribe dem by keepin' it open. And dey still ent vote for we." Ronnie was one of the first PNM ministers to suggest that the sugar industry be shut down – and for the same simplistic reason: it's a financial drain.

There was always a pretense of caring and wanting to breathe life into the sugar industry. Eric Williams set up study after study, each presenting viable solutions to the problems facing the industry, solutions that Williams didn't like or simply discarded. The NAR got into the act as well. As did the UNC administration. In the end it is Patrick Manning who is presiding of sugar's demise, without writing its true epitaph.

He is by no means the one who has caused sugar to reach the end of its life. He, of course, has his own agenda for shutting it down. It's a conscious political, rather than an economic one. The wealth he now controls gives him enough buying power to discard the opposition base once and for all, trample on an entire community and still walk away looking and feeling good about making a decision that is ostensibly in the national interest.

And the fact that Raffique Shah and other industry stakeholders are willing accomplices makes Manning look and sound even more credible.

If you go back to 1956, you'll see sugar as the biggest thorn of the PNM's side. After all it was a sugar leader, Bhadase Maraj, who presented the greatest challenge to the PNM then and it was another sugar leader, Basdeo Panday, who became the true nemesis.

By the time Panday emerged as the new hero on the plains of Caroni, Williams had bought Caroni Ltd to make sugar a priceless commodity in the new political order. His strategy would be to keep the sugar workers in a state of perpetual dependence by preventing the industry from being viable, while setting up various committees and studies to develop plan after plan to rationalize the industry, starting with the Spence committee, which included Basdeo Panday.

When Panday and the UNC inherited government there was hope that finally, sugar would come out of the dark ages, but Panday didn't do it. Perhaps it was because he made the big mistake of trusting the future of sugar to certain people who, apart from being square pegs in round holes, were intent on securing their personal agendas, which didn't include a viable sugar industry.

In the end, it was left up to Manning to either sustain or kill the industry; he strategically chose the latter.

Basdeo Panday, as prime minister, warned Caroni over and over again that an industry that cannot sustain itself would die of suicide. He pleaded with the management of Caroni Limited to make the industry work. He reminded sugar workers that the blood and sweat of their ancestors had fertilized the land from which the nation had earned its wealth and told them in 1999: "You cannot fail, you must not fail; too many people depend on you."

Panday was not talking about 10,000 sugar workers and an equal number of cane farmers and their immediate dependents. He was talking about an entire community of more than a quarter million – the workers, farmers and their dependents, the contractors, the shop keepers, farmers and fishermen who fed them, and the hundreds of other small businesses that grew within and outside of the sugar belt to service the needs of those who lived in the community.

The Caroni community alone provided direct income tax payments to the treasury of more money than the industry received in subsidies – twice as much. And that doesn't take into account the business activity and the attendant economic benefit for the government and the nation.

All that is with the industry holding on to a begging bowl, pleading like little Oliver Twist, "Please, sir, may I have some more".

But the sugar industry didn't have to beg. It was a sleeping economic giant waiting to wake up. And under the UNC administration a man named Sharma Lalla almost made it happen. But he was stopped in his tracks.

From the beginning, going back to the Spence report, the experts were telling the government that the sugar industry was viable. From the earliest time it was becoming abundantly clear that sugar production was not sustainable, given the cost of production versus the real price of sugar, even in preferential markets. What the experts were saying was to use the resources effectively and turn a profit.

But the PNM never wanted to hear that. Caroni not only became a political pawn, it became the PNM's employment agency, as some former top executives will gladly testify. When cabinet economic adviser and former Caroni chairman Frank Rampersad suggested the creation of small farms using productive Caroni lands Eric Williams gladly agreed, until Rampersad insisted that the sugar workers must get the lands and that they must develop and farm them.

Under Williams, the government simply took Caroni lands for all kinds of activities without paying any compensation. Even a fraction of the real estate costs would have erased the red ink and shown a profit. Yet the books always showed the state company in a losing position.

The uses were wide and varied from the infamous O'Halloran racing complex to housing and industrialization.

Patrick Manning, Ramesh L. Maharaj and Raffique Shah knocked down a UNC proposal to partner Caroni's rum distillery with Angostura. They argued the stock alone was worth a billion dollars so it was a bad, corrupt deal.

Well here's a question for all of them. If the stock was worth that, why on earth didn't the new Manning administration turn that into a pot of gold?

Various committees had identified some lands that were not suited to cane production and recommended them for housing. In a free-market environment during the oil boom, the development of those lands (using Caroni's idle equipment and manpower during the rainy season) would have returned a fortune that would still be delivering profits today.

The truth is Caroni – and by extension the sugar industry – could have been and is still the most viable in the nation. Its assets alone tell the story. Just consider its real estate.

Real estate apart, ideas for business ventures were discarded out of hand. With sugar as its raw product, why not get into the profitable soft drinks industry? Caroni's sugar was making the others rich, why could it not do it for itself?

With the only sugar refinery in the English speaking region, it was a given that developing refining capacity with cheap imported sugar would deliver huge profits. No government wanted that.

Foreign grocery chains were willing to lease lands, employ sugar workers to produce fresh produce and guarantee they would buy all that the farmers could produce. The idea would be a dollar-spinner, but it didn't fly.

The company had developed a unique beef herd, but was stuck in bureaucracy and could not develop its beef and other agro business. And the story goes on!

The question today for everyone to ask is what's next?

Tens of thousands of rich agricultural land – both state and private – will now sit idle, with no government incentive to develop infrastructure to make them productive.

Who are going benefit from the blood and sweat of those men and women who built an industry, sustained it, and were then discarded unceremoniously by an uncaring administration?

Who will inherit the state lands and other assets? And will the administration ever admit that the sugar industry was only a burden because the state allowed it to be?

As far back as 1986 Basdeo Panday, as a member of the NAR administration, was saying clearly that the sugar industry could only be viable if it got out of sugar.

He had six years to make that happen. Like those before and after him, he didn't do it. And no matter what his justification, he must share the blame for the demise of an industry, the spoils of which will continue to enrich the nation while making those who slaved to build it even poorer.

It's too late for sugar, but perhaps the time has come for a revolution in agriculture. The lands and labour force are available. All it requires is the political will, a clear unbiased vision and action.

And from the ashes of the sugar industry will rise a powerful phoenix that will feed the nation for generations to come as surely as it will restore dignity and self-reliance to an entire community.

Jai Parasram | Toronto. 
(This column first appeared in the Sunday Guadian in June 2007 and was later published on JYOTI).