Cabinet to Decide on Next Move on Sugar Privatisation

Prime Minister Bruce Golding, has announced that the Minister of Agriculture, Dr Christopher Tufton, will be presenting to Cabinet on Monday, a submission identifying alternatives that will be considered for the future divestment of the sugar industry.
Mr. Golding was speaking this afternoon (Jan 30) at a press conference at Jamaica House, called to report on the status of the Government’s negotiations with Infinity Bio-Energy for the divestment of Government-owned sugar assets. The industry has suffered losses over a number of years, resulting in a decision by the previous Government to launch a programme for its divestment and a transformation of the sugar industry.
The present Government commenced negotiations with the Brazilian firm, Infinity Bio-Energy in March 2008 and signed a Heads of Agreement in June. However, negotiations have not been completed within the specified cut-off date, which is the end of January 2009. Mr. Golding said that although the negotiations have been terminated he had indicated to the company that they could still make a proposal to the divestment team.
Some of the recommendations to rescue the sugar industry will include investing in a refinery with modern technology and efficient management that will address the demand for refined sugar locally and the wider CARICOM markets at a cost competitive basis. He said there are several other possibilities but the economic dynamics will have to be carefully examined.
Mr. Golding said there is a domestic market for sugar. “We consume each year 65,000 tons of sugar. We produce each year 130,000 tons of sugar but what we do is export the 130,000 tons and then we import the 65,000 tons we require”.
He said this was being done under the preferential trade arrangement with Europe, which makes it financially better to import rather than produce what we need. However, Mr. Golding said this situation cannot continue to exist beyond September.
“What we are not prepared to contemplate is a sugar industry that is going to incur the level of losses it has been incurring up to now and to continue to require consistent budgetary support that has to be supported by taxpayers of the country”, Mr. Golding said.
The Prime Minister announced that Minister Tufton would also be looking at other private sector investors which might be interested in all or part of what Government was seeking to privatise in the negotiations with Infinity Bio-Energy. Minister Tufton will continue to utilise the services of the experienced Sugar Enterprise Team, headed by Mr. Aubyn Hill.
The Prime Minister reiterated Government’s commitment to meet payments due to the sugar workers under its legal obligations. In December Government paid $800-million which represents all the notice pay to which the sugar workers are entitled by law.
“We have a commitment to make the redundancy payment to workers within a period of 6-months and commitments have been made to make the payments between March and April”. The total redundancy bill is $2.7Billion of which $1.9Billion is being sourced from the European Union, Mr. Golding disclosed.
The Ministry of Agriculture is also developing a programme of initiatives to assist workers who will be displaced and communities which might be affected.
“We want to do everything possible to ensure that those who have worked many years in the industry, are able to make a fresh start and to meet obligations to their families as best as we can”, the Prime Minister noted.