Arthur: Sugar sector can’t repay
?LEADER?OF?THE?OPPOSITION Owen Arthur said yesterday that the $161 million bond issue recently guaranteed for the sugar industry would not be repaid by that sector.
Speaking during debate of the 2011-12 Estimates in the Lower House, Arthur said the sugar industry must be examined by the legislators but not in adversarial way.
“This would be the second time in the course of 20 years that effectively there has been a significant bailout . . .
“This $161 million will not be repaid by the sugar industry. It will fall to the state. And don’t let us mix words. That’s reality. In 1991, $240 million; now $161 million,” he said.
The Opposition Leader added: “You have an industry where the cost of producing a tonne of sugar in?Barbados is about $3 000 a tonne and the receipts $917 a tonne.
“The industry is now also functioning in an environment where the price paid by the European Union has been cut by 36 per cent . . . and it isa permanent cut.
“The industry, like all industries in the ACP (African, Caribbean and Pacific nations), now has to contend with the application of the European Union’s Everything But Arms initiative that allows non-ACP suppliers to be able to supply sugar to the ACP at the best prices.
“At some stage, fundamental matters in respect of the sugar industry will have to be faced and that is reality.”
He spoke of the efforts his administration made to carry out a strategy which would have raised revenues. This would have included an end to selling sugar as a bulk commodity and introducing branded products, noting that it was looking at ways in which the industry would have benefited.
Arthur indicated that there were initiatives to increase the yields because a large part of sugar production in Barbados related to low yields.
He added that initiatives which were started by his administration, which left office at the start of 2008, had not been carried through.
“There are fundamental problems and I don’t think we should make light of them. And in a way they are not partisan issues because the context within which the sugar industry is functioning is not set by political considerations . . .
“It would be unreasonable to expect that every ten years a government of Barbados has to assume the responsibility for $150 million to $200 million of debt of a sector,” Arthur said. (ES)