Django posted:Dave posted:Prince posted:Was the timing right when Jagdeo told the unemployed sugar workers that he will pay them stipends "if he wins the election"? In other words, if he loses the election, the sugar workers hope/promise remain unfulfilled. To add, should we consider this a PPP tactic to get the sugar workers votes?
Do you know there was a sugar levy impose on the sugar workers that supposed to be paid to them . This levy was then used to sustain Bauxite workers and public servant.
The sugar industry was the backbone of Guyana economy.
In reality, majority of Indians paid out of their pocket ( depriving their children a good life ) to feed Linden ( mostly Afro.
The sugar workers is owed $85M US.
Can you tell, when the Sugar Levy act was repealed ?? Blowing a lot of hot air without telling the truth why the Sugar Industry failed.
Teaching you is like throwing water on duck back.
United Nations ECLAC
IMPACT OF CHANGES IN THE EUROPEAN UNION
IMPORT REGIMES FOR SUGAR, BANANA AND RICE ON
SELECTED CARICOM COUNTRIES
5 May 2008
The Sugar Protocol of the Lomé Conventions allowed ACP countries to export 1.4 million tonnes of raw cane sugar annually for refining in the EU market at the same price as the guaranteed internal support price set for EU beet sugar producers.
Caribbean countries were given allocations totaling 428,109 tonnes: Barbados 50,312, Belize 40,349, Guyana 159,410,Jamaica 118,696, St. Kitts/Nevis 15,591 and Trinidad and Tobago 43,751.The intervention or support price for sugar from which Caribbean exporters benefited was set since the 1993/1994 crop year at €631.9 per tonne for white sugar and €523.7 per tonne for raw sugar.Special quotas were also allocated under a Special Preferential Sugar (SPS) agreement negotiated in 1995 to supply additional refinery needs in the EU. The quota amounts are determined annually by the European Commission based on the refinery needs in the EU. SPS exports receive only about 85 per cent of the price obtained for ACP quota sugar. SPS quotas declined over the years (37 per cent 1995 to 2003) but Caribbean quotas declined more significantly (61 per cent over the same period) . The SPS is expected to last for the duration of the Sugar Regime (2006).
A critical factor in the reform of the EU CMO for sugar was the WTO negotiations that were geared toward further liberalizing import tariffs and eliminating export subsidies, which would significantly impact the highly protected EU sugar market. At the same time, the EU sugar export subsidies and guaranteed price for sugar were challenged at the WTO in 2002 by Australia and Brazil. A Dispute Settlement Body was set up in August 2003 and reported in August 2004 in favour of the countries that challenged the sugar regime.This development as well as criticisms of the structure of the sugar regime led the EU to make proposals for reform beginning in September 2003.
Agreement was reached in November 2005 on the first major reform of the EU sugar regime since it was established in the late 1960s.EU sugar prices are to be cut by 36 per cent over four years (2006/2007 – 2009/2010) moving from €523.7 per tonne in 2005/06 to €496.8 per tonne in 2006/07; €448.8 per tonne in 2008/09; and finally to €335.2 per tonne in 2009/10.
Restructuring of the EU sugar industry is expected to be voluntary aimed at reducing production by around six million tonnes over the same period.These measures are expected to facilitate EU compliance with the recent WTO ruling to limit subsidized exports. Incentives from a restructuring fund have been provided for sugar beet growers to renounce specific amounts of their quota. However, the European Commission is prepared to make compulsory quota cuts if growers do not renounce sufficient quota by 2010. Under the EPA negotiated between the EU and ACP groups of countries duty free and quota free access to the EU market will be provided for sugar from 2015 subject to a special safeguard clause.
There are two phases in the transition to 2015. In the first phase from the beginning of 2008 to the end of September 2009, Caribbean and ACP countries will continue to receive guaranteed prices for sugar albeit at reduced prices. From the beginning of October 2009 countries would continue to have duty free access but within a ceiling of 3.5 million tonnes of sugar exports from all ACP countries. However, the guaranteed price received could fall short ofthe EU price since importers of ACP sugar are not required to pay the full EU reference price but only at least 90 per cent of that price until September 2012. After 2012 only a price information system would be available to determine the prices to be negotiated between importers and exporters.
Caribbean and other ACP sugar exporters will be adversely affected by the reforms. The EU reform proposes support to ACP countries affected by the reform measures. Such support will be mainly in terms of improving international trading conditions for ACP countries; enhancing competitiveness of the sugar sectors of such countries where sustainable; and promoting diversification of sugar-dependent areas. Achieving competitiveness will be directed at both the sugar industry and the sugar cane industry with the objective of adding value to the sugar cane as well as sugar products. European Community assistance to Caribbean and ACP countries would be provided for 2006 but continued support will be available until 2013 through the development portion of the Development Cooperation and Economic Cooperation Instrument.
Since the reform of the EU sugar regime has taken place only recently the time period would be too short to assess its impact in terms of Caribbean sugar export performance in the post-reform period from 2007. Nevertheless, some insight can be gained from the pre-reform period as well as from prospective assessments that were undertaken in light of the reforms and the negotiations for Economic Partnership Agreements to replace the previous trade regimes between the EU and ACP countries. Sugar exports from Caribbean sugar producing countries, with the exception of Belize,have been on the downswing from the late 1960s; in the case of the Dominican Republic decline occurred from the 1970s, which was due largely to declining sugar cane production in most of the countries, again with the exception of Belize . The most significant decline occurred from the late 1960s up to the early 1980s in the case of Jamaica and Trinidad and Tobago and from the late 1960s up to the early 1990s in the case of Barbados and Guyana.
Guyana made a remarkable recovery from 1991 due largely to the privatization of the management of the State-owned sugar company. What is interesting to note is the association of ownership structure and management of the sugar industry with the growth of sugar exports. State ownership has coincided with the downswing of the sugar industry. Privatisation of management especially in Guyana stemmed the decline of the 1980s.
Caribbean sugar exports declined during a period when world sugar exports and world sugar consumption increased significantly. Exports remained more or less at EU quota levels.The factors that influenced the decline of sugar exports were domestic, related to production and management inefficiencies and high costs in State-owned sugar operations. The economic rent or income transfer from the EU sugar preference sustained the sugar industry in the Caribbean but,with the exception of Guyana, did not contribute toward restructuring the industry to improve efficiency and reduce costs.Reduction in the guaranteed price for sugar in the EU market will have a significant impact on the sugar industry in most Caribbean countries given the fact that most of the industries were not restructured to improve competitiveness. Export earnings for the region will decline by over half (52 per cent) over the four years of the reform period assuming that countries export their full quota. For Caribbean countries to maintain the same level of earnings prior to the reform, they would have to increase the volume of their exports by about 56 per cent over the four year period . This would only be possible if the sugar quota is increased. An increase in the Caribbean quota was announced consequent upon the conclusion of an EPA between the EU and the CARIFORUM group; 60,000 tonnes would be added to the group’s quota with 30,000 to be shared among the CARICOM countries and 30,000 allocated to the Dominican Republic.
With the reduction in price and increase in quota the total earnings of CARICOMcountries would increase from €200 in 2008 to €226.9 in 2009 or by 13 per cent more in each of those years . These earnings would however represent a reduction of 46 per cent of the earnings of 2005/2006 or 6 per cent less than the decline in earnings they would experience without the increase in the quota.
Increased tonnage would not be the answer to the EU sugar price reduction if the EU is unable to reduce its production quota by the targeted 6 million tonnes over the four-year period since that would only create surplus on the EU market and lead to further price decline. The amount of EU quota renounced so far has been below the target set by the European Commission which may now have to make compulsory cuts to manage production in light of the EU WTO commitments. Nevertheless, further price reduction may be inevitable given the EU decision to liberalise its sugar imports from ACP countries that sign EPA agreements and the need to significantly reduce its domestic production. Although increased exports would help Caribbean producers to maintain their export earnings from the EU market, it may not be practicable for most countries to increase production given limited resources and high costs of production. Cost of production data are difficult to obtain. However, estimates show that Belize and Guyana have the lowest costs whereas St.Kitts/Nevis and Trinidad & Tobago have the highest costs. Barbados and Jamaica have relatively high costs compared to Belize and Guyana . With a €335 per tonne price for sugar in 2010 only countries from Mozambique to Congo would be able to export to the EU market without incurring losses.
This group includes the CARICOM countries of Guyana, Belize and Jamaica. In the event of a 50 per cent price cut after another round of EU reforms in 2013 no Caribbean country will be able to export profitably to the EU.
Guyana is considered to be the only country in the CARICOM region whose sugar industry will remain financially viable given the EU sugar price cut. Nevertheless, the country will need to prevent costs from rising in the event of further reduction in the EU sugar price.Despite being a lower cost producer Belize may not be able to survive the significant price reduction given its cost structure
The sugar industry in Guyana is best positioned to take advantage of the liberalization of the EU market under the EU-CARIFORUM EPA. Guyana embarked on a restructuring programme in 2005 to improve the price competitiveness of its sugar industry as well as diversify into other sugar-related areas such as refining, co-generation and ethanol production. The centerpiece of the plan is the (US$170 million) Skeldon Modernisation Project which involves the construction of a new sugar factory to replace the existing one at Skeldon in the north east of Guyana. One of the objectives of the project is to reduce the cost of production byabout one third from about US.8 cents per kilogram (US.18 cents per pound) to less than US.5cents per kilogram (US.11 cents per pound). Another objective is to supply power to the national electricity grid.
The new sugar factory was designed with a co-generation facility capable of providing 10 megawatts of power to the national grid.The Skeldon factory which was scheduled to come on stream in 2007 is now expected to be commissioned in 2008. Latest reports indicate that the factory is nearing completion with tests being currently performed on the various components of the factory’s operations. The factory is expected to eventually reach its capacity to process 1.2 million tonnes of cane annually into more than 100,000 tonnes of sugar. However, achievement of the targeted sugar output of the factory is dependent on the supply of cane to the new factory. Additional production of sugar cane is expected to come from 8,900 hectares of new estate lands as well as farmers’ lands being developed.
The new Skeldon factory is considered to be a state-of-the-art factory in the Caribbean,incorporating relatively new and modern technology to achieve high levels of efficiency.Attention therefore has to be paid to the skills requirement for managing and operating the facility. Both local and foreign expertise have been recruited to ensure that the factory operates at its required high standard. While skilled labour is being recruited for the Skeldon operations,conversion from manual labour to machines is being pursued on the East Demerara Estates in order to reduce costs and in light of the decline of the labour force. Expanding production, improving efficiency and reducing costs will allow the Guyana sugar industry to maintain its profitability in relation to its exports to the EU market. In addition,the Guyana Sugar Corporation (GuySuCo) has diversified its sugar production into packaged branded sugar and into organic sugar on a trial basis. Since the introduction of its packaged
‘Demerara Gold’ sugar in 2003, sales increased from 600 tonnes in 2003 to 7000 tonnes in 2007.Most of the packaged sugar is sold in the Caribbean whereas raw bulk sugar is sold mainly in the EU and United States markets.
Contribution of the EU Sugar Protocol to Output, Earnings and Employment
| GDP (€m) | % GDP | % Export Earnings | Direct Employment as % Labour Force | Indirect Employment as % Labour Force |
Guyana | 61.3 | 10.1 | 11.4 | 7.2 | 2.4 |
