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Sad move

Paul says Sagicor pullout of sugar would be a tragedy

The Chief Executive Officer of the Barbados Agricultural Society (BAS), James Paul, says it will be a tragedy for the sugar industry if the Sagicor-owned Barbados Farms Limited, one of the island’s largest cane growers, pulls out.

Paul, a Government backbencher in the House of Assembly, is therefore urging the Freundel Administration to step in and help to restore confidence in the industry which, for centuries, was the main pillar of the Barbados economy.

Responding to a question from Barbados TODAY following the launch of the Youth Agri-Preneurship programme this week, Paul said the fact that Sagicor was considering pulling out of the industry was “a real concern”.

CEO of the Barbados Agricutural Society James Paul

CEO of the Barbados Agricutural Society James Paul

“It is a question of confidence,” the BAS CEO said. “At the end of the day, if the very persons within the private sector who grow the sugar . . . do not see a viable future in it, then it is something that we should be concerned about and, to the extent where the Government can do something in terms of giving some injection of certainty, I think that will help.”

At a news conference last month to report the performance of Sagicor Financial Corporation, of which Barbados Farms is a subsidiary, Group President and Chief Executive Officer Dodridge Miller said the company was reviewing its continued involvement in the island’s agri-business sector.

He pointed out that in the last three years alone, Barbados Farms had chalked up more than $8 million in losses due to shrinking yields from land under cultivation and rising operating costs amid uncertainty about the industry’s future.

He said the company was therefore faced with two options – get out of agriculture altogether, or try to see if there was some way of advancing the sale of land to make up the difference.

Miller also said that while he had been hearing for at least the past 15 years about a plan for the agriculture industry, “from Sagicor’s perspective on Barbados Farms, we are not clear and we are seeking that clarity”.

Pointing to an increase in milk production this year “as a result of a progressive move on the part of the Minister of Agriculture”, Paul suggested the same kind of assistance should be provided to the sugar cane industry.

“We are hoping even in the coming budget next week to see some further measure of assistance being given to the industry in order to be able to give that kind of confidence. That is what is needed. If the industry anticipates there is a market for their products and they are given that level of assistance, I don’t think there will be a problem with people remaining in the industry,” the BAS CEO said.

Regarding the planned construction of a new sugar factory, Paul suggested that the focus should be on increasing production now.

In February of this year, the Inter-Sugar Partnership (ISP) announced that it had signed an agreement with Government that opened the way for Barbados to borrow US$250 million from the US-based National Standards Finance (NSF) to fund the Cane Industry Restructuring Project (CIRP) and begin building the facility.

Under the agreement, construction should begin no later than September in order to be completed in time for the 2017 sugar crop.

“I have heard both sides of the argument in terms of the question of the factory. The new factory promises a lot. The fact of the matter is that we are here now. What we need to be able to do is increase the amount of acreage [of sugar cane] that is under production because even the existing factory can grind all the cane that is available,” said Paul.

“It is a moot point . . . If it is seen that the new factory is essential for the future, fine, but you need to have capacity to drive anything and right now we are in danger of falling below capacity,” he contended.

4 Responses to Sad move

  1. Patrick Blackman June 11, 2015 at 8:49 am

    Sugar is dead, if you continue to promote this, then may be we need someone else in your position. Anymore investment in this industry should be limited to local consumption and rum production. No more large scale production for export, its just not viable anymore. To finance this industry to the tune of $200M+ is just crazy stuff.

  2. jrsmith June 11, 2015 at 12:02 pm

    Bajans business management and the politicians are the ones to blame for the demise of the sugar cane industry.
    Bajans were told how middle they are and they look down on people who work the industry,
    A small island like Barbados had to import labour to harvest the crops , long before automation. Where were the thinkers, make the sugar in Barbados, send it to England ,cheap, refine the sugar sell it back to us at a higher cost, making this beneficial to the corporates in the UK.
    Where are the brains from the university,
    Barbados was an island , who started at a very high level to compare with many countries/islands around the world, other had cows or donkeys ,tied to a shaft to grind they canes, we in Barbados had steam and some electric engines, why then our sugar industry failed so miserably .
    Why build a new factory, the land is there add to portvale update and refurbish.
    May be even better building a factory to process gaunga, seems a though that would soon take over from sugar cane.
    Our problem ,every part of Barbados is manage badly, that’s our problem.
    @, Patrick ,B, hail, again on target brother, hope you are good.

  3. Patrick Blackman June 11, 2015 at 12:27 pm

    @jrsmith Hail – If all the actionable intelligence tells you that sugar is dead why keep pushing this agenda? If the stated goal of the National Standards Finance is : “We develop, finance, acquire and own essential social and economic infrastructure assets and real estate.” then one has to ask whats in this potential deal that we are not being told?

    Sagicor’s move to exit this industry is not surprising, if memory serves me right, the International Finance Corporation has made a significant investment in this company and therefore management decisions may no longer be at the local level anymore, hence Sagicor’s strategic direction.

  4. Patrick Blackman June 11, 2015 at 12:33 pm

    This may be a move by Sagicor (through IFC) to facilitate the ownership of essential social and economic infrastructure assets by National Standards Finance, you never know whats happening behind the scene., just asking a question.


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