Long-standing sugar subsidies ‘to end’

(Barbados Today) A deadline of March 1st, the end of the current fiscal year, has been set for the Government to move away from long-standing agreements to subsidize a continuously failing sugar industry with thousands of dollars.

Prime Minister Mia Mottley made the declaration as she lamented the fact that the burden of subsidies on the consolidated fund, in the midst of the economically crippling COVID-19 pandemic is simply too much to sustain.

During a ceremony to facilitate the handover of mobile lunchrooms and sanitary facilities for agriculture workers, PM Mottley revealed plans to engage numerous private sector organisations including the Barbados Agricultural Society (BAS) and the Barbados Chamber of Commerce and Industry (BCCI) to discuss the reconstruction and recovery from the COVID-19 situation.

Speaking specifically to the relationship between Government and private sector stakeholders in the sugar industry, Mottley declared: “There must be alternative sources of revenue or increased options for the products that you produce with higher value added, such that you can change the price relationship of loss that you now have with your production.

“Those discussions are deep, going on now and I anticipate that you have to reach some kind of conclusion before the end of the fiscal year which is the end of March. The Government is not walking away, but the Government is not prepared to continue operating in the sugar sector as it has in the past,” she further explained.

The PM however promised that additional options were on the table that would create a framework for both private and public sector industry players to benefit from any value that could be derived from sugar production.

“We know that we have already started the process of restructuring with the level of subsidies and how subsidies are paid to them and the extent to which it will be a declining burden on the Consolidated Fund and the taxpayers of this country.

“But we have gone further and we have said ‘look, the government does not only have the power to tax and spend,’” said PM Mottley. “Government also has the power to facilitate and empower and to that extent, it is clear to a blind man on a trotting horse that a sugar factory that works as a call factory only three months of the year cannot create stability financially, for an industry that is selling at a price that is below its cost of production.

“It is no secret that we have said as a government therefore that once we get the right public-private mix, we are prepared to ensure that the one sugar factory is capable of operating as a renewable energy factory thereby earning the revenue not just three months in the year from the sugar crop, but earning revenue for 12 months when the year comes,” she said.

Minister of Agriculture and Food Security Indar Weir, who is at the center of the negotiations noted the intention is to create a framework that will be mutually beneficial, but further discussions still need to take place.

“When we first became Government, many of the private farmers in the sugar industry weren’t paid and they had a backlog of money owed to them and we were able to pay up all of it so they are being paid currently. Those are the kinds of things that we committed to doing in our manifesto and have delivered on,” said Weir.

“So what she was speaking to now is how we go forward with our relationship with the private farmers and the Government to create a new industry that is a win-win for everybody,” the Minister added.