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U.S. questions move to restructure sector

SHAWN CUMBERBATCH, [email protected]

U.S. questions move to restructure sector

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THE UNITED STATES (US) HAS QUESTIONED why Barbados is moving to devote “a large amount of scarce resources” to restructure the sugar industry.

It has been told that Government “has identified the restructuring of the sugar industry as an important aspect of its national development strategy” and will not be taking on any new debt in pursuing the venture.

Minister of Foreign Affairs and Foreign Trade Senator Maxine McClean and members of her delegation faced this and other questions recently when Barbados’ latest trade policy review took place at World Trade Organization’s (WTO) headquarters in Geneva, Switzerland.

According to newly-released minutes from the two days of discussions held in January, the US, like many other WTO members, posed several questions to Barbados representatives, including why Barbados was moving ahead with a cane industry project that it told WTO members was estimated to cost US$270 million.

“Given that the agriculture sector contributed $103.7 million to Barbados’ economy in 2012 is there an economic rationale for devoting such a large amount of scarce resources to just one segment of the agricultural sector? What are the expected returns for such an investment by the state,” the Americans asked.

In response, Barbados said “the reformed [sugar] industry will in addition to the many multifunctional benefits that having a vibrant agricultural sector bring to an economy, ensure the contribution of agriculture to the national economy is improved”.

sugarcaneatfactory2web“Using the traditional sugar cane rotation system, it is expected that increased food crop production will be realised as the trend of agricultural land lying idle is reversed”.

In addition, the project will help to maintain the environment through preservation of top soil and a pleasing aesthetic to tourists and locals alike. The sector will also continue to provide molasses to the vital rum industry, ensuring that the home of rum produces branded product from locally sourced molasses,” Barbados responded.

“At the social level, the sector will maintain the authenticity of the major cultural event in the island . . . Crop Over [Festival]. The project is expected to significantly assist government in meeting its overall target of 29 per cent contribution of renewable energy to the production of electricity by 2029 as has been done in other sugar producing countries such as Mauritius, but using biomass fuels and thereby reducing the use of fossil fuels.”

Branded sugar

Barbados also said that in addition to the production of branded sugar instead of bulk raw sugar, a revitalised sugar cane industry “will also permit the co-location of facilities to heat and cool agricultural crops as the project seeks to maximise the efficiency potential of year round cogeneration of electricity and heat”.

“The project is now being structured as a [public private partnership] and as such will not be Government debt. As a result, the project has to be self-funding with an adequate return to meet investors’ requirements, which the project achieves.”

During the discussions, Brazil, one of the world’s leading sugar producers, said it would “follow with great interest the studies to expand the scope of sugar-related activities in order to produce ethanol and generate electricity”.

“As it is known, Brazil is one of the main developers of ethanol originated from sugar cane and remains very much interested in developments in the areas,” it said in an official statement replying to Barbados’ trade policy review report.

In its statement, Benin noted that “reforms carried out by Barbados since the last review of its trade policies in 2008 have helped the country achieve significant results in various
areas and sectors of activity, such as agriculture, mainly the sugar cane sector”. (SC)