IT’s an enigma to believe that something so sweet as sugar could engender such acrimony, poverty, and inhumanity in societies where sugar is the mainstay of the economy. The enigma has visited this land before.

Sugar calamities did not first show its face in the 1990s. This country has always had a history of sugar crises. The journey along the road of early cataclysm began circa 1795, when river soils became unproductive and 120 plantations along the Demerara River and 200 along the Essequibo River were abandoned.

Abolition of slavery in 1833 and the ending of the Apprenticeship period in 1838 created an artificial labour shortage on sugar plantations. The removal of Colonial Preference in 1846 induced competition with other colonies for sugar.

A grant of export bounties by European governments resulted in excessive productions of beet sugar in the 19th century, resulting in a limited colonial market for sugar.

The price of sugar declined in 1896, at half of what it was in 1881. A sugar crisis followed with further closure of many sugar estates and large mergers.

High World War I prices prompted sugar production in other countries and in conjunction with strong competition from beet sugar, sugar prices again fell in 1929. World War II created a shortage of fertilizers, machinery, labour, and shipping space.

Then, of course, there were the nationalizations in 1976. Odle argued that the move toward nationalization was a reaction to economic crises rather than a planned program of economic change.

But the more recent furore on sugar started when the European Commission announced on June 22, 2005, its intention to reform the Common Market Organization (CMO) for Sugar; the European Union (EU) definitively decided to initially reduce by 36% the price of sugar that African, Caribbean, and Pacific (ACP) countries will receive.

Effectively, this decision brought to an end the era of preferential access to sugar from 20 ACP countries; the preferential access started life in 1975 whereby the access really was for agreed quantities of sugar at guaranteed prices, negotiated annually. The preferential quota had an equivalence of some 1.3 million tonnes per year.

With the end of preferential access, the EU also made available resources for adjustment and compensation from 2006 through 2013; and so the EU initially made an offer of 6 billion euros to its own producers; but agreed only on 6 million euros for all ACP countries for 2006.

The EU believes that EPA agreements will articulate the social, economic, and environmental conditions of ACP countries, perk up the existing trading arrangements, and fulfill the compatibility requirements of the WTO regulations.

While people may poke faces at the Skeldon Modernization Plant, it is becoming something; and restructuring sugar now is on the move. Restructuring will reduce the cost of production of a pound of sugar, increasing the industry’s competitiveness. The Skeldon Sugar Estate also will house a power generation facility, a distillery, and a bagasse plant.

In 2008, it was recorded that sugar production plunged to 226,200 tons, the lowest since 1990. This modern sugar factory will produce high quality raw sugar tied to an increasingly attractive demand internationally. Bagasse will produce an average of 10 megawatts of electricity up to 77 gigawatt hours annually. Bagasse is expected to replace use of light and heavy fuel oil in diesel engine-driven generators powered by GPL.

CARICOM not long ago has been consuming 15% of Guyana’s sugar. But CARICOM’s demand is in excess of 300,000 tonnes per year. And CARICOM’s demand for refined sugar is in excess of 70,000 tonnes annually, and Trinidad & Tobago with the sole refinery plant in the Caribbean only has a capacity for 50,000 tonnes per year. The restructuring surely can envelop these prospects.

The history shows that the industry is extremely vulnerable to various economic crises and political actions, and without adequate economic security, the industry will not survive.

Whatever happens, Guyana’s road to restructuring will unravel the mystery of sugar. That enigma of bitter-sweet sugar has hurt and comforted many people and nations over the years. But nations in the periphery of the world system must know that all core countries (world’s most powerful economies) always act in their own interest first. And, perhaps, globalization is the core countries’ vehicle to sustain their dominance and limit development among the poor.
PREM MISIR