At 32min.35sec of the Dr. David Estwick presentation of the Democratic Labour party (DLP) 2013 Manifesto Launch he laid out government’s strategic plan for restructuring the sugar cane industry for generating valueaddeds by accepting financing from the Japanese. That is diversification: using sugar cane to generate power (25,000 megawatts) by reducing the fuel bill by 150 million dollars among other recommendations. The cane industry restructuring project (CIRP) is estimated to cost 230 million dollars.
This project which Dr. Estwick unfolded during the political campaign in February 2013 has taken on critical importance given the planned expiry of European Union sugar quotas in 2015. The resultant action is that it “would lead to a reduction in the price in the European market. This in turn would make the EU market less attractive to the ACP and other higher cost exporters.” The bottomline is that countries in the Caribbean (including Barbados) would lose its preferential status in the EU market.
If the APD debate is any thing to go by it is unlikely Barbados and other Caribbean islands will be able to influence the 2015 deadline. Our only hope is if the quotas are removed by the EU it will create a problem for sugar cane refiners in the EU as well. Barbados will be banking on the European Commission extending to deadline to 2017-20 given this consideration.
What is evident is that the EU’s commitment to reduce its carbon footprint which has given rise to the APD. And now EU’s further commitment to replacing imported sugar under the ACP-EU arrangement. These two key forex generators (in the case of sugar other GDP factors come into play) are under threat. How Barbados is able to strategically respond in the narrow window available becomes a national imperative.
In light of the EC aggressive time table to expire preferential treatment for our sugar, Dr. Estwick’s plan to restructure the sugar cane industry has taken on urgent significance. Although there is nothing to suggest we couldn’t develop other markets for our sugar, the reality is that Barbados will not be the only game in town and even if we were to acquire new markets the price would be unattractive. The rapid diversification of the sugar cane industry as outlined by Estwick must be the plan.
Can we do it?
All of the above is detailed in a summary by David Jessop who is director of the Caribbean Council.