Joint Technical Committee Report on Sugar
The burden of sacrifices has to be equitably split, and even more so since the days of ‘free lunch’ are over
The report is yet to be made public but its findings are all over the place. It has provoked the wrath of workers and planters alike, though the contents are yet to percolate to the wider public. As a former Minister of Agriculture who had been in the vanguard of reform in the Sugar industry since 1996 I wholeheartedly share the deep-seated concerns expressed by representatives of workers and planters of the sugar sector. The overview below is provided as an urgent call to awaken the country to stand united in the name of social justice.
I had several meetings with representatives of planters and workers. I was appalled to learn that they were not convened to depone or submit memoranda in writing. They were totally ignored and the composition of the JTC was thoroughly geared towards corporate interests. The estimated benefits to producers with the implementation of a package of measures are largely to the detriment of small planters. With the stroke of a pen the JTC recommends the elimination of acquired rights of workers. Section 3.3 of Annex 2 of the report adds insult to injury. If implemented there will be a descent into social chaos. I hope that the inter-ministerial committee to be chaired by the PM will set aside this report and recommend safeguarding the legitimate rights of workers.
Blueprint and VRS 2
The Blueprint on Centralisation was introduced in 1997 under a Labour Government, and was the outcome of protracted discussions with the stakeholders. There was equitable allocation of resources. The trade-off was the result of better understanding of impending challenges and threats in the sugar industry. The offer to the workers in the factory was generous and legitimate. In 2007, the Sugar Industry Efficiency Act was amended and cane fields workers were given a better package than under VRS 1. Accompanying measures were disbursed upfront to meet the legitimate demands of all stakeholders in the process of restructuring the sugarcane industry. Even métayers were given security of Land tenure. The collective purpose of these measures was to create conditions for sustainable change for a key industry without forgetting the livelihoods which were inextricably dependent on it.
Benefits since Imperial days
Our friends from the corporate sector have benefited enormously since the era of imperial trade. They have used proceeds from the sale of sugar and its by-products to diversify their portfolios and rightly so. However, concessions have always been accompanied with obligations and rights ever since independence — hence the inevitable organic link between workers, planters and corporate partners. Under the present Government these links have been severed and it is now a one-way ticket for the corporate sector. If we compute all the fiscal incentives extended to the conglomerates of the sugar industry they will laugh all the way to the bank. The facilities are at the expense of taxpayers; an alarming prospect even as the risk of underfunding social services is becoming more real.
No one-way ticket
The burden of sacrifices has to be equitably split, and even more so since the days of ‘free lunch’ are over. It is not because sugar has slipped below the average cost of production that the Sugar Corporate has to depict an apocalyptic scenario. This is a country where there is rule of Law and decency and the rights of rent seekers or Landed Gentry have never been questioned. Thank God for in many ways, this has spared the country a lot of instability, but it is not a passport to ask for ever more and more. It is a quest to be more imaginative, innovative and as entrepreneurs be true to themselves. One may recall what Lady Thatcher told our friends from the private sector when one of them expressed dissatisfaction despite massive support extended to them by the then Labour government in its endeavour to restructure the economy – I quote: “You call yourself Private Sector?” Now I can understand why the Lady was not a proponent of making a U-turn.
As to whether we subscribe to what Sir Gaëtan Duval used to say of the Corporate Sector is a matter that can be discussed. SGD in a fit of fury reminded us that the corporate sector likes to cry over spilt milk. The lopsided JTC report highlights this déjà vu déjà entendu phenomenon. There is no reason to complain and Corporate Sector can in fact showcase their success to others. They have used the proceeds of sale or hiving off of assets to lower the company’s net debts. The sum total reveal net profits. According to an article which appeared in one of the dailies the overall profit of Alteo is sound.
The Labour Party in Government or Opposition has never remained insensitive or indifferent to the interest of all stakeholders in the sugarcane industry. Equity is the key word. That’s why we never succumbed to those who impressed upon us to violently disrupt the system. We believe that wealth creation and social justice work hand in hand. I would invite the PM to protect the acquired rights of workers of the sugar industry. Medine Sugar Estate will surely submit its application for closure of factory and laying off of a sizable number of field workers. He must make sure that there is no going back on the undertakings given in the Blueprint for factory and Garage workers. The VRS2 Agreement to field workers is equally sacrosanct. As for the planters they don’t want any equity participation. They are legitimately asking what was spelt out in the MAAS Action Plan (2006- 2015) i.e. to be remunerated according to the value of their “Standing Cane” which they claim has a reference price of Rs 2500/ ton of sugarcane.
The Rescue Package
The Rs 1.3 billion package is taxpayers’ money. The details of the package can be found at table 10 of the report. Irrespective of the ultimate cost let us use our judgement and not our inclination. The history of sweat, blood and tears which have helped to build our economy can never be wiped away, and their legacy should not be undermined today.
In the spirit of social justice let us share the burden equitably and safeguard the legitimate rights of all stakeholders. King Sugar is here to stay though it is no longer the mainstay of our Economy. We call it Asset stripping.
* Published in print edition on 1 June 2018