Reopening estates will be costly but worth it

The PPP/C administration must be commended for the decision to reopen the sugar estates closed by the previous Granger administration. This is a step in the right direction and will certainly will go a far way in terms of resetting the economy along more people-oriented and sustainable lines.

I had argued in several letters in the media that the closure of the estates was a retrograde step which will have an adverse impact not only on the lives and well-being of sugar workers but on the economy as a whole. By closing down grinding factories, and a process of cannibalization and mismanagement, the previous administration had in effect transformed assets into liabilities. Billions of dollars have been allowed to go down the drain not to mention the severe social and sociological consequences on people and communities.

It would take a significant injection of resources to bring back these estates into operation but I am convinced that it would be money well spent. Any cost-benefit analysis of the sugar industry will reveal that the benefits of keeping the industry operational outweigh by far the costs incurred, even when consideration is taken of current market prices for sugar. The challenge facing the industry is to produce sugar at lower unit cost and to become much more competitive as a supplier of sugar on the world market. As it currently stands, the ratio of tons cane to tons sugar (TC/TS) is far too high and must be significantly lowered if the industry is to be restored to financial viability. The same is true for tons cane per acre which also needed to be substantially increased.

The industry is currently experiencing severe stress, but with better management and the right policy framework, there could be a change in fortunes and with it the dawn of a better day for those who depend on the industry for a living.

Yours faithfully,

Hydar Ally