Is There a Future for the Caribbean’s Sugar Industry?

The sugar industry is woven deeply within this region’s history of slavery. In more recent decades it has generated a new source of anxiety (albeit not to the same scope as the harrowing period of chains and forced labour), with predictions of its impending collapse and the resultant threat to the livelihood of many in the Caribbean family.

In order to understand the dynamics of this business sector there are three key questions that must be answered: What is the state of the Caribbean sugar industry in 2020? Does it really need ‘saving’? And, if so, what might save it? Let’s look at these one by one. 

What Is the State of the Caribbean Sugar Industry in 2020?

The Caribbean region has been a longstanding contributor to a marketplace that in 2018-2019 saw approximately 178.93 million metric tons of sugar produced globally. The current landscape has lately seen various quarters of the media detail the crisis in the local sugar industry. And yes, this present era hasn’t been one of ease and cheer for those who work in that sector. But a proper and fair understanding of this issue does require an initial acknowledgement that, by many measures, the industry is in a state of ongoing crisis, and has been for a number of decades. 

In writing of the region in 1971, academic Janet D Momsen stated “ . . . the sugar industry of several traditional cane-growing areas appears to be on the verge of total collapse”. In the 1990s, journalist Jim McNair spoke of how a push towards economic diversification in Barbados and other sugar-producing nations in the region had seen a deliberate shift away from reliance on sugar to deliver a sweet injection to government revenue each year. Furthermore, that the decline of global competitiveness in sugar-producing Caribbean nations began centuries ago, and owed to the simple fact that other nations around the world ‘caught up’ as sugar producers.

By no means does detailing this history seek to diminish the current challenges. What it does do is recognise that the industry has ample experience in clearing hurdles placed in its path.

Now to its latest chapter.

Does the Industry Really Need ‘Saving’?

In 2017 the Caribbean saw the EU do away with national sugar production quotas. For Barbados, Belize, Guyana and Jamaica – the four remaining sugar-producing nations in the region – this was a savage blow, and it affirmed that action by CARICOM (of which all four aforementioned nations are member states) would be key to the future of the industry.

In this regard, while sugar exporters have long looked abroad with an equal mix of hope and despair when it comes to the future of the industry, the case is now being made that its salvation will be best obtained not abroad, but locally. The capacity to survive of the four remaining sugar-producing nations will depend on their ability to collaborate and pursue a shared approach within regional frameworks. In the absence of doing so, the future could be dire.

What Could Save the Industry?

For William Neal, spokesperson for the Sugar Association of the Caribbean, the 49th Regular Meeting of the Council for Trade and Economic Development (COTED) late last year was a step in the right direction.

Commenting on the decision at the 49th COTED for the incremental protection of regionally produced sugars when it meets the standards required by regional users of sugar, Mr Neal said: “It recognized that the future of the sugar industry lies in the full regional integration of CARICOM produced sugars into CARICOM supply chains; and SAC agreed to accelerate investment to produce higher quantities of quality, food grade sugar (value-added products) for this purpose, with the confidence that they will have a home in their own regional market.”

Now, a key priority for the SAC is ensuring such commitments are met.  “We need to ensure full implementation of the monitoring mechanism as agreed at the 49th COTED,” said Mr Neal. Doing so “to enable sugar industry stakeholders (supply and demand) to understand the CARICOM market and create an environment that is mutually beneficial and viable.” 

From the SAC’s perspective this has been a key challenge, and is perhaps revealing to external observers. As Mr Neal noted, “The SAC dedicated significant time and resources to demonstrate that Plantation White Sugar can and is being used, regionally and globally, in the manufacturing process.”

The success (or otherwise) of the sugar industry going forward is now set to be a measuring stick when it comes to CARICOM’s aspiration to establish a single market economy in the region. Success here means success for local sugar and for those who want to see greater integration, including a single currency among CARICOM nations. Failure would see critics of integration point to this sugar episode as a cautionary tale for the future. 

When New Seeds Won’t Sow

As new industries and competitors emerge, established ones will be challenged to survive. This is a principle of the free market. But it’s also true that once an industry is gone, it can be all but impossible to resurrect, at least for many decades until consumer trends change and create the conditions for a revival. For example, major breweries now have to contend with a resurgent craft beer industry that’s building new businesses and jobs in local communities.

Some in Caribbean governments who feel that the pursuit of diversification within their economies has been a success, may be tempted to take no further action, mindful that even if the sugar industry further declines, the growth of other industries should offset it. This may ultimately be the course of action, but it’s far from clear that historians will one day judge it as the right one, especially as existing local strengths, such as tourism and financial services, will face greater competition from growing regions elsewhere. 

For better or worse, it’s impossible to tell the story of the Caribbean without the story of sugar. We may one day see the local industry end, but losing it now in this modern era could leave a bitter taste.