Jamaica’s sugar industry is attempting to weather a perfect storm of high production costs, a two-year drought resulting in falling yields for some of its most productive cane fields and low price forecasts on a highly competitive global market.
As a result, restructuring and job losses are expected, as already seen in the eastern parish of St Thomas. But for some, this could mark the start of a new beginning.
On 7 August, cane cutters and harvesters for the Golden Grove sugar factory received notices and 14-weeks severance pay as the owners, Seprod Jamaica Limited, acted on a two-year plan to cut cost by outsourcing cultivation and harvesting operations.
“Approximately 600 field workers including those in tractor and transport operations will be given their redundancy payments on 4 September,” University and Allied Workers Union (UAWU) representative Clifton Grant told Equal Times.
There has been no agreement on how many workers will be re-employed by the new, as yet unnamed, contractor. But trade unions representing the workers – UAWU, the Bustamante Industrial Trade Union (BITU) and the National Workers Union (NWU) – say they will do their best to ensure the new contracts are favourable to the workers.
Golden Grove is currently one of just six functioning sugar factories in Jamaica and one of just a handful of large-scale employers in rural St Thomas. Although factory jobs will not be affected, the loss of 600 jobs could have a major impact on the agriculture-based economy of St Thomas, which has some of the highest levels of unemployment on the island.
BITU’s representative Hanif Brown told the Jamaica Observer newspaper: "During the out-crop period these workers receive guaranteed payments, and approximately 60 per cent of them would continue working at reduced pay. We don’t know what will happen under the [new] contractual arrangement".
Grant told Equal Times: “We will continue negotiations with the management to protect the workers rights”.
As one of the island’s top manufacturers of food and household products, and majority shareholder of the Golden Grove factory, Seprod made the decision to outsource all field operations after losing US$17.4 million of a US$26.1 million investment in the factory in 2009.
In Jamaica, although some aspects of cane cutting are mechanised, most sugar cane is still cut by hand, dating back to the days when the island was a British colony and sugar – the empire’s most valued commodity – was planted and harvested by African slaves.
As well as providing thousands of jobs, proponents of hand cutting say it prevents crop damage and allows farmers to keep older cane roots that result in bigger yields in the coming season. In addition, in some hillside areas, cane fields are only accessible by donkey, mule and foot.
The Golden Grove redundancies are symptomatic of Jamaica’s struggle to carve out its place in today’s highly competitive global sugar industry.
Brazil, India and China are world leaders in cane sugar production, but while its yields are tiny by comparison, in Jamaica, sugar is still king. As well as being its primary agricultural export, the sugar industry is the country’s second largest employer with some 28,000 out-of-season and 38,000 in-season workers contributing US$74.5 million to the GDP in 2010.
Changes to Jamaica’s sugar industry began in 2008 with the privatisation of five dilapidated government-owned factories. To facilitate the sale, around 8,000 sugar workers were laid-off under the European Union-funded Sugar Transformation Programme (STP).
Some €147 million (approximately US$109.8 million at the exchange rate of the time) was paid-out to assist with the privatisation process, to enhance the quality of life in ‘sugar dependent’ communities while revamping the ailing sector after years of “under-investment and poor commercial management,” according to documents from the EU mission in Jamaica.
The agreement also provided for redundancy payments to facilitate divestment and provide training and funding for alternative forms of employment. Additionally, it funded farmers to replant old fields and establish new ones to help Jamaica meet a national production target of 200,000 tonnes per annum.
This target is yet to be met: last year, Jamaican sugar producers yielded 154,000 tonnes of sugar; this year that figure fellto 134,000 tonnes.
In 2009, the ’sugar protocol’ – a long standing-agreement which provided Jamaica and other sugar producers from African, Caribbean and Pacific (ACP) states duty-free and quota-free access to the EU sugar market – came to an end. Until 2012, ACP countries were still allow to export sugar duty-free to the EU, but prices and quantities were not fixed.
However, a subsequent transitional agreement – known as the Accompanying Measures for Sugar Protocol Countries – which provides help to countries to help deal with the changes – ends in 2017. George Callaghan, chief executive of Jamaica’s Sugar Industry Authority in Jamaica, recently described the move as an “earth-shattering event”.
In anticipation, the Pan Caribbean Sugar Company (a local subsidiary of COMPLANT, the China National Complete Plant Import and Export Corporation Limited, which owns and operates the island’s three largest sugar factories) removed itself from a cooperative agreement to sell its sugar through Jamaica Cane Product Sales Limited (JCPS) – the agency which markets most Jamaican sugar at home abroad.
Seprod is now also seeking government approval to market its own sugar in an attempt to secure a higher price for its product on the local and global market. However, Hugh Blake, chief executive of JCPS, remains confident that the current set-up is beneficial for all those involved.
“When we lost our preferential markets three years ago, Jamaica managed to negotiate some of the highest prices paid for sugar in Europe,” he tells Equal Times.
Whatever happens, for now, there remains some optimism despite the uncertain future. Allan Rickards, chairman of the of the All-Island Jamaica Cane Farmers’ Association, told Equal Times that his association, which represents all of the islands cane farmers, has seen numerous improvements to the working conditions and welfare of its members in recent years.
“The lay-offs could be a blessing for workers who want to use their severance packages to set up small businesses. Some workers will grasp the opportunity to do other things; many will use the payments to boost their own farming and other businesses. Some will also find work in other sections of the island and others will get jobs with the new contractors,” he said.
Rickards pointed out that most of Golden Grove’s field workers are seasonal and frequently older workers, earning a living out-of-season as farmers, shop keepers or by planting their own cane crops. Many are tired of the hard work of cane cutting and would relish the opportunity to make money some other way. For them, receiving termination pay from Golden Grove could be a good thing.
But for those who have no choice but to remain cane cutters, things to don’t look so sweet. Over at the Worthy Park Estate in the nearby parish of St Catherine’s, drought conditions make it doubtful that extra work will be available this year. Office manager Herman Chambers told Equal Times: “We have enough cutters at Worthy Park and with the drought, I don’t think we will need additional workers”.