Current stakeholders in the sugar industry should look at the earlier model for the cane-farming industry

Dear Editor,
I was pleased to read John Tracey’s most instructive response in SN December 17, 2009 to Kenrick Hunte’s of December 14, on the matter of the viability of agricultural development banks.

While not pretending by any means to know anything about the principles and policies of banking, one couldn’t help detecting, however misguidedly, the nuanced implication in the writer’s argumentation that the new and revamped approaches to addressing the current challenging environment which he describes, might well include a re-conceptualisation of how an agricultural development bank could be made more relevant.

In this connection one was particularly drawn to the reference to “a model of financing that has already been introduced in the cane farming industry that has more risk mitigating features for commercial banks.”

Hopefully the ‘model’ referred to took into account earlier related legislation which provided for the establishment and operation of:

1) a Cane Farming Development Corporation;

2)   a National Cane Farming Committee; and

3)   a Cane Farmers’ Rehabilitation Fund.
The Cane Farming Development Corporation was established around 1964 to distribute funds subscribed by the then stakeholders Bookers Sugar Estates Ltd, Demerara Co Ltd, Royal Bank of Canada (now Republic Bank) and Barclays Bank DCO (now GBTI).

Approximately $4M was allocated for the initial development of small cane farming on an organised basis, with further technical assistance provided by the respective sugar companies.

The existing cane farming community is the outcome of this undertaking.

Loans were transmitted through the sugar companies, who were in turn responsible for processing the repayments through deductions from farmers’ revenue obtained from the sale of their cane.

These transactions were legalized via the instrument known as the Cane Farmers Contract (General Conditions) Rules, which constituted subsidiary legislation to the National Cane Farming Committee Act Cap 69:04.  The act, in establishing a National Cane Farming Committee, provided for the creation of districts and constitutions of district associations (cane farmers were supplying Skeldon, Albion/Port Mourant, Rose Hall, Diamond, Wales, Leonora and Uitvlugt Estates); as well as for a register of farmers and contracts to be maintained.

The Cane Farmers Contract (General Conditions) Rules still remain a statutory requirement to be fulfilled by both manufacturer (estate) and cane farmer.  Examination will show that it is subject to substantive change.  For example it refers to the non-existent Sugar Producers’ Association.
It also needs to be examined to ascertain what other provisions may or may not be applicable, including the formula for the price currently paid farmers for their canes.

The range of technical assistance to which the manufacturer is committed under the act to provide farmers also needs to be reviewed.

More substantively it needs to be confirmed whether the National Cane Farming Committee Act as it stands is enforceable to the extent of the contract being jointly executed by manufacturer and cane farmer. Briefly the Cane Farmers Special Funds Act Cap 69:09 makes “provision for the establishment for the benefit of Cane Farmers of the Cane Farmers Price Stabilisation Fund and the Cane Farmers Rehabilitation Fund and for purposes connected therewith.” Section 4 of the Act states that the Cane Farmers Rehabilitation Fund shall consist of –
a)    the sum transferred thereto pursuant to section 3;

b)   such other sums as may from time to time, be received pursuant to the Sugar Industry Special Funds Act; and

c)    sums accruing by way of interest on or investments of moneys of the fund deposited or invested.

Section 6 of the Act states that the Cane Farmers Price Stabilisation Fund shall consist of –

a)  the sum transferred thereto pursuant to section 5;

b)   such other sums as may from time to time, be received pursuant to the Sugar Industry Special Funds Act; and

c)   sums accruing by way of interest on investments of monies of the fund deposited or invested.

Current stakeholders, including of course the sugar manufacturer, may want to revisit this scenario during their effort to reinvent the wheel, so to speak.   Given the critical status of cane farming in relation to the sugar industry’s future, it may be prudent at this juncture, to pay particular attention to the earlier model.

Yours faithfully,
E B John