[quote_left] Prepared by: The Barbados Society of Technologists in Agriculture[/quote_left]The Sugar Industry has made a significant contribution to the prosperity of Barbados. It is credited with facilitating the construction of the Deep Water Harbour between 1956 and 1961. In the post World War Two era the Industry enjoyed stability with a remunerative price for its sugar from the United Kingdom under the Commonwealth Sugar Agreement which provided an agreed price (based on actual production costs) for an agreed “quota” of sugar with an obligation to supply. This arrangement continued after Britain joined the European Community.
Over the years, the decline in the sugar industryÂ has been driven by ever increasing production costs, falling revenues from exported raw sugarÂ and reducing acreages under sugar cane. In 2009, some 18,000 acres are under sugar cane producing approximately 350,000 tonnes, converted to 31,500 tonnes of sugar.
The Raw Sugar Market
The current ACP/EUÂ Sugar Protocol ended at 30th. September 2009.The price for raw sugar, CIF Europe is 448 Euros/tonne. At present exchange rates this approximatesÂ Bds.$ 1240/ tonne.
Market arrangements will now be determined by the terms of the recently signed EPA (Economic Partnership Agreement) with the European Union. This will provide prices lower than, but related to, those within the European Community. There will be no obligation to supply, except where privateÂ contracts are made betweenÂ individual suppliers and refiners.
TheÂ European Union is intent on reducing its substantialÂ expenditure on agricultural subsidies , and to this end, has granted duty free, quota free access to their market for sugar from the “World’s Least Developed Countries”. Industry analysts expect the price to continue a downward slide.
Cost of Production
Annual cane production is approximately 350,000 tonnes. Some 120,000 tonnesÂ is grown by the Barbados Agricultural Management Company and 230,000 tonnes by independent farmers.Â The cost ofÂ raw sugar deliveredÂ to UK is about $2700.00/tonne, while revenue is bds 1240/tonne. Losses therefore amountÂ to a staggering $1460.00 on every tonne ofÂ raw sugar exported. This is clearly not sustainable .
What Had Been Planned
Further consolidation had been planned, targeting the closure of Portvale Factory in 2005 and upgrading Andrews Factory. This, however, was put on hold when the concept of a completely new Multipurpose Factory producing Direct Consumption Sugar, Ethanol for addition to gasoline locally, and Electrical Energy for the NationalÂ Grid emerged. The design and specifications were far advanced butÂ there were concerns over (1) the cost, reported to be US$140 million, (2) land requirement for viability which necessitated idle land be put back in cane cultivation and (3) the feasibility of harvesting ” Fuel cane” in the wet season.
Where Are We Going Now?
The change of Administration in 2008 placed a “Stop” on this Project. No decision on the future direction has been forthcoming and there is now widespread concern throughout the Industry while low morale thrives on the uncertainty.
At present the public does not know where the industry is going. It has been two years Â since the change in government, yet no definite plans have been made public. Barbados Agricultural Management Company (BAMC) employees have not been given clear long term goals and plans. Land continues to go out of production. There is insufficient new investment in field operations.
The BSTA acknowledges that there will be some difficult and probably expensive decisions to be made, but believes that we can no longer afford the luxury of either the “status quo” or indefinite deliberation over “what to do”. It imperative that a long overdue Â decision be made on the future direction of the Industry beforeÂ it shrinks to a level where it cannot be saved.
AÂ Way Forward
While some people might feel that sugar has served its time and should be allowed to continue on its present path to closure, let us remember the acknowledged benefits of:
Preserving the aesthetics of the island for tourism (2) providing a sound base and catalyst for non-sugar agriculture (3) filling domestic sugar requirements, and molasses for Barbados Rum (4) earning and /or saving foreign exchange (5) providing employment .
The future industry must maximise the potential of sugar cane as the most efficient converter of solar energy to useful energy. The recommended principal output products are:Â (1) Electricity (2) Direct Consumption Speciality Branded Sugars from the richest “Crusher Juice” only (3) Alcohol from the remainderÂ of the juice . An optimal mix of all of the above Â is needed to attain viability.Â In addition, the technology is now available for the efficient separation of the sugar cane stalk into wax, rind, pith and juice from which numerous products could be made.
Electricity can be produced from bagasse (which amounts to about 40% of cane) asÂ was first done in 1981 at Foursquare factory in St. Philip when power was sold to the national grid. Today, with modern high pressure boilers and condensing turbo-alternators, 450 Kwh can be produced for every tonne of bagasse. While most of it is now used as fuel in manufacturing sugar, prudent measures can produce a significant surplus. Ten percent of the current bagasse could produce overÂ 6 million Kwh.
The BL&P recently stated that they will purchase power at a rate of 1.8 times the fuel clause, with a minimum of 31.5 cents per Kwh. Even this minimum would yield about $2 million, an indication of the potential.
Of course any serious attempt to maximise revenue from this source must address the need for – High pressure boiler; Condensing turbo-alternator; Provision of cooling water; Optimisation of steam utilisation; Storage of bagasse.
Direct Consumption Sugar should replace all loose sugar on the local market , with only “white granulated” sugar imported. The overseas market for Specialty Branded sugars must be pursued more aggressively. The “Plantation Reserve”, which targeted the “top end” of the market has not been very successful. We believe that the “Barbados Brand” should be aimed at the middle income household and marketed through one of the large British Supermarket chains.Â However, this sugar must be manufactured under stringent quality and sanitation controls.
Alcohol can be made from molasses as presently used for rum, from cane juice or high test molasses.Â The alcohol can be channelled to manufacture rum or, by a further dehydration process, ethanol, an additive enhancer for gasoline, to replace the present additive MTBE.
Alcohol production for any purpose would require a distillery, preferably located adjacent to the sugar mill so as to use common services.Â We recommend that such a distillery be able to produce both “Rum Spirit” for sale to a Blender and “Alcohol”, destined for “Motor spirit”.
While potential revenue from rum would be the most profitable, production volume would be limited by market growth of the bottled product. Alternatively, production of alcohol for addition to gasoline would have a captive local market and would have the additional benefit of saving foreign exchange currently spent on the gasoline additive MTBE.
Some Important Considerations
In order to achieve optimum efficiency and lowest cost , one of the two factories should be closed. The current recessionary climate may not be conducive to this step but it should be effected as soon as is feasible, with cost/benefit models done on present vs. alternative locations for the single factory.
In the meantime the present factories should generate electricity for the national grid, recognising that the quantity would be limited by plant capacity and available bagasse. Maximising generation in the future requires new equipment with an additional demand for water. Likewise, production of rum and alcoholÂ requires construction of a distillery together with facilities for the disposal of effluent.
A decision on the future direction of the industry is now overdue but is vitally important if it is to survive. The tax payers should be told and the demoralised sugar cane industry personnel need to know where the industry is going and what they have to do in future!
In going forward, a detailed, and realistic plan with clear objectives, and agreed to by all stakeholders, must be prepared so that timely implementation can proceed as soon as circumstances permit.
It is clear that there must also be improvements in the field aspect of the industry if it is to move forward or even survive.
There has been concern expressed for some time over the general decline in sugar cane yields, although there are a few farmers who have managed to sustain relatively high yields over time. During the past decade or so, based on research results and the experience of agronomists and the more successful farmers, some solutions were put forward to improve the efficiency in the industry by increasing cane yield and reducing the cost of production.
Some of these are: (1) reorganisation ofÂ the management structure, possibly with smaller management units, allowingÂ proper management and maintenance of equipment,Â making available some core equipment such asÂ sprayers and fertiliser applicators at each farm unit to allow operations to be done on a timely basis, and with organized sharing of other equipment (2) development or introduction ofÂ efficient machinery to cut and plant propagation material without damaging it and so reduce cost of planting (3) the use of efficiently operated and well maintained mechanical harvesters to reduceÂ harvest losses and controlÂ extraneous matter going to the factory. (4) the use of improved spraying equipment to enhance efficiency of weed control and reduce spray drift (5) the planting ofÂ newly introduced productive varieties (6) ensuringÂ a complete stand of cane at and after planting (7) systematic application of compost to all fields using compost from the recycling centre at a subsidised cost and (8) controlling soil erosion . It must also be borne in mind, when calculating cane yields, that field size must be re-calculated, taking into account the loss of productive land due to the establishment of headlands for mechanical harvesters.
It was also pointed out by cane researchers that it is unlikely that cane yield would Â improve by spending time and money on increased fertilizer application, correcting soil compaction, changing row spacing and controlling not so important diseases and pests. However, had the above mentionedÂ solutions and recommendations been implemented, by now the industry would have been in a better shape for further improvement, but sadly there has been little interest shown by the majority of farmers and the status quo remains.
This is unfortunate, since the sugar industry still has valuable assets which need to be preserved and exploited through the cultivation of sugar cane to preserve productive soil, support non-sugar agriculture, produce sugar and raw material for rum and bioenergy production to support the local economy.
There are a number of positives in the industry. There is infrastructure for cane and sugar production available; considerable land, some in production and some out of production, is available; field equipment suited for cane production is available , although there isÂ needÂ for some replacement; there is a wealth ofÂ research information for improving cane yield and reducing cost of production ;Â there are improved varieties released for sugar production which have not yet beenÂ fully exploited;Â high yielding multi-purpose varieties to produce sugar along with increased electricity through co-generation from bagasse (high fibre) and alcohol from juice are being developed.
The local industry has the significant advantage of having well-known institutions like the West Indies Central Sugar Cane Breeding Station and the BAMC Agronomy Research and Variety Testing Unit (AVRTU) resident in Barbados. These institutions have large germplasm and breeding expertise to develop new varieties with various component combinations to support a new sugar cane industry for production of renewable energyÂ and alcohol for rum and other value added products. However, they need to be given a clear policy directive, so that they can tailor their research and development to suit the required goals.
The many challenges of the industryÂ must be facedÂ and positive action taken byÂ (1) increasing factory efficiency (2) improving management by offering incentives to increase productivity and reduce cost of production (3) bringing idle land into production (4) improvingÂ morale and keeping the very few experienced farmers and workers in the industry (5) producing value added products by using sugarcane for much needed alcohol for rum as well as forÂ fuel and electricity (6) improving factory efficiency through the installation of modern equipment and the acquiring ofÂ improvedÂ management.
The powers that be need to make a policy decision on the way forward for the industry , bearing in mind that a business plan was developed for a new sugar cane industry to replace the existing sugar industry since 2003. Those proposals are valid today.
ABOUT THE BSTA:
The Barbados Society of Technologists in Agriculture is an organisation of experienced professionals in Agriculture (founded in 1939), the Council of which meets on a monthlyÂ basis to discuss agricultural issues and make recommendations where possible to relevant authorities.