Minister of Agriculture and Fisheries, Hon. Dr. Christopher Tufton, says that although the state-owned sugar estates did not make a profit for the 2008/09 crop season the Government had not made any additional expenditure, and therefore had not suffered a loss.
"The Government has not spent any additional sums, coming from a point where they spent $5 billion to subsidise it the year before," Dr. Tufton said. He was responding to questions posed by Opposition spokesman on agriculture, Roger Clarke, on the status of the industry yesterday (February 22) in the House of Representatives.
He stressed that the Government's priority over the last few years, had been to keep the estates operational until a suitable investor was found. "We didn't go into the agreement (with investors) not to make money if we could, but the truth of the matter is that the priority at that point in time, and certainly, over the last couple of years, was to keep the Government estates running until we found a suitable partner to take it over, recapitalise it, to make it more modern and efficient, and to find additional markets," he outlined.
Dr. Tufton said this objective had been met, in that the Government has not had to subsidise the industry.
"Yes, the publicly-owned estates did not make any money, but we were able to achieve the critical objective of finding a source of funds that would have allowed the industry to continue until the divestment, and we were able to do that," he stated.
The state-owned sugar estates produced 72,508 metric tonnes of raw cane sugar for the 2008 to 2009 period, which was a shortfall of 22,763 metric tonnes from the
95,271 metric tonnes target.
For the current crop, the Government has committed to Tate & Lyle of Britain, 100,000 metric tonnes of raw cane sugar.
Under a two-year partial pre-shipment financing agreement, the Sugar Company of Jamaica (SCJ) Holdings is to supply a minimum of 100,000 tonnes of raw sugar to Tate & Lyle in exchange for pre-shipment financing of approximately US$46 million. Some US$26 million is for the 2010/2011 crop year and US$20 million for the 2011/2012 crop year.
This agreement, which was approved by Cabinet last April, succeeded the pre-financing agreement with Eridania Suisse of Italy, under which the Government provided the company with 79,000 tonnes of raw sugar in exchange for US$15 million in pre-financing.
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