This island’s vital rum industry, which brings in $100 million in precious foreign exchange each year, is facing collapse.
The depressing news was dropped like a bombshell this afternoon by Chairman of the Barbados Rum Committee, Dr. Frank Ward, while sharing a media briefing at the Bridgetown Port with Minister of Agriculture, Dr. David Estwick and Managing Director of Preconco, Mark Maloney, to provide an update on Government’s proposed construction of new molasses storage facilities at the port.
Ward warned that the island’s rum industry, which depended on molasses as its most essential ingredient, was in danger of dying because the United States was pumping massive subsidies into its rum sectors in Puerto Rico and the US Virgin Islands.
“Given the fact that we are facing numerous challenges, there are a number of subsidies coming out of US territories for their own rum industry which will severely constrain the ability of our industry to thrive and to survive,” he added.
“We are paying on average,” he continued, “about US$200 a ton for molasses. The territories in question with the subsidies being given to their industries on average about US$20 a tonne. We will find that extremely to compete with and it is a challenge at this point in time and we are appealing not just to Barbados’ rum industry, but the CARIFORUM rum industry in general, that our governments take this issue very, very seriously and seek to have dialogue with the US Government, with a view to resolving what we feel to be an iniquitous and pernicious use of subsidies for multinational spirit companies and their rum production.”
“If this is not done within a short space of time,” Ward cautioned, “you could very well see not just the demise of the industry in Barbados, but throughout the Caribbean.”
The top rum executive suggested that this matter could not be allowed to go beyond next year, especially since some local companies related to the rum sector were on the brink of going out of business.
Ward said the industry had already held two meetings so far with the US Trade Representative, and was hoping that after things had settled down after the presidential elections in the US, the Caribbean would make a concerted effort to bring the American government to the table to try to resolve this dire state of affairs.
He also noted that industry officials had had three legal opinions on the legality of the US subsidies and all were agreed that there was a case to be made against the American administration.
Minister of Agriculture, Dr. David Estwick, said the issue would have to be tackled at three levels – locally, regionally and internationally. He promised that domestically, he would immediately discuss the situation with the Ministry of Foreign Affairs and Foreign Trade to determine how his Government could proceed.
“I would have to now speak to the private sector trade team as well as the Ministry of Foreign Trade to see if there is a … rule within WTO which relates to subsidies as regards to 10 per cent of any total support of any government industry. So [I’m] going to evaluate that first,” the minister pointed out.
He said the idea was to see if that rule allowed Barbados to find some way of sustaining the rum industry until authorities could get the regional position sorted out.
“We started with negotiations first. Hope you could get the United States to the table, that is the offending party and if not, well then we may well have to, at CARICOM level, file a case at the WTO against the United States. Antigua has had to do it already and other countries,” insisted Estwick. (EJ)