first_imgThe entire world, including Britain and the European Union (EU) are attempting to grapple with the implications of the British electorate mandating their Government that they must “leave” the EU (Brexit).While there are some, like Guyana’s Foreign Affairs Minister Carl Greenidge who have already commented on whether our “handouts” from the EU will be affected, maybe it is time the Ministry of Agriculture and Greenidge consider whether there are any opportunities in the divorce that can be grasped by our beleaguered sugar industry.As we all know, the EU began revising its sugar regime since 2006, including the Lome Protocol for purchasing sugar from us as a member of the African, Caribbean and Pacific (ACP) group that was supposed to exist in perpetuity. As a result, our sugar prices were slashed by 36% which forced several producers in the Caribbean to exit sugar production and our industry to fall into a tailspin in the wake of efforts to reduce production costs through the Skeldon Modernisation Project.The focus of the EU in all the sugar regimes it crafted has been to protect its beet sugar industry by providing it with huge subsidies. In the meantime our sugar which had been shipped to Britain to the Tate & Lyle Sugar (TLS) on the Thames for refining was incorporated into the EU regime in 1973 and modified accordingly in the following years.Cane Sugar has been treated as a stepchild and TLS has seen its refineries gradually decrease from six to one. And even that single refinery is only operating at 59% of its 1.1million tonnes capacity.In 2012, TLS launched a “Save our Sugar” campaign and asserted: “If current and proposed EU policies continue to unfairly restrict access to raw sugar, cane refiners will not survive as part of the supply mix in Europe’s sugar sector”.In the next two years according to Art 50 of the EU Charter, Britain and the EU will be negotiating the terms of the former’s exit. The EU’s entire sugar regime which address three main areas: quota management, a reference price and a minimum guaranteed price to growers, and trade measures, will have to be replaced by Britain with a new regime.The quota management, which limits production to 13.5 tonnes of sugar is divided up between 19 member states and there are strict rules for overproduction would have ended as of 30 September, 2017.Because beet farming in Britain has never been on a scale as say France and Germany, and British farmers never received subsidies on the scale of their European counterparts, the British Government will not be faced with the same level of pressure when they negotiate new Free Trade Agreements (FTA’s) in cane sugar.This will be necessary even though the ACP countries have duty access under the extant agreement and since volume quotas can be continued, Guyana can increase shipment of its sugar what would still be higher prices than the residual world market prices.TLS has been leading the charge for renegotiation of cane sugar trade arrangements before the old arrangement expired in 2017. It can be a potent ally with countries such as Guyana.Guyana has another reason for securing the support of TLS with which it has been associated for the entire long history of the firm.TLS is part of a growing evolution of cane sugar producers that have begun to integrate vertically to achieve efficiencies of scale. It was acquired by American Sugar Refiners (ASR) which had already bought over Belize Sugar Industries.TLS is already intimately knowledgeable about the situation with Guyana’s sugar, where there does not appear to be the commitment towards reorganising it with the new corporate supply chain linkages developing.Guyana should not be agonising about “aid”, which in the end simply exacerbates our dependency syndrome. By seeking a strategic alliance with TLS, we may be able to provide employment to our citizens in sugar so they can live in dignity.last_img

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