Jamaica Set to Sell Off Its Sugar Industry

The government of Jamaican Prime Minister Edward P.G. Seaga, whose economic policies the Reagan administration extols, is considering selling back or leasing nationalized national sugar estates and factories to private firms.

The Jamaican sugar plantations, formerly owned by the United Fruit Company and West Indies Sugar Company, were bought in 1970 by the conservative Jamaican government then in power; Michael Manley's socialist government set up sugar cooperatives in 1976 to run the nationalized estates.

Under cooperatization, wages for cane-cutters doubled from about $10 to about $20 per day, and workers were guaranteed off-season employment, a forty-hour work week, and access to housing loans. But the industry was hurt by bad weather, plant diseases, and especially foreign exchange sho-rtages which prevented the purchase of fertilizer and other inputs. Total sugarcane production declined from 353,000 tons in 1976 to 205,000 tons last year. Productivity per acre under cultivation, however, stayed roughly constant.

The Seaga government is citing productivity losses as its main reason for wanting to denationalize the industry. Early this year, the government held talks with the British firm Tate & Lyle, which handles the marketing of Jamaican sugar in its main market, the United Kingdom. Tate & Lyle offered to take over the state-owned sugar factories and increase production drastically if it could abolish trade unions in the industry and do away with producers' cooperatives. The government refused the offer, but now is considering some of the same options.

The Wall Street Journal reported in February that both Bacardi, the rum company, and Gulf & Western were discussing sugar industry leases or purchases with the Jamaican government. When contacted by Multinational Monitor, both firms denied that any such talks had taken place.

But Alvaro Carta, head of Gulf & Western's Florida-based Food Products Co., is leading a task force set up early this year by the U.S. Business Committee on Jamaica (See MM, March 1981) to "study ways of increasing productivity in the [sugar] industry," according to a Gulf & Western spokesperson.

"The [Jamaican] government has indicated they are very serious about restructuring the industry - sugar is the backbone of Jamaica's economy," said Carta. "Our task force study is a very important part of what will be taken into consideration to make their final decision."