SIA hits back at Worthy Park in bitter sugar war

The CEO of the Sugar Industry Association (SIA), George Callaghan, has fired back at the management of Worthy Park Estate in St Catherine over its claims that the growing cess paid to keep the SIA operational is a burden on stakeholders.

Speaking with The Gleaner yesterday, Callaghan said it was just the latest salvo aimed at thwarting the SIA’s efforts to take control of the domestic sugar market so that it can dictate prices and treatment of cane farmers.

He said claims that the SIA cess on Worthy Park represents approximately eight per cent of sugar revenue – and that it has moved from $4,700 per tonne in 2015 to an anticipated $7,095 per tonne in 2020 – were blatantly false.

“Let me say this very clearly: Over the past three years, the SIA cess has gone down by 41 per cent, from a budget of $616 to currently $298.1 million. It is about five per cent of the gross value of the sugar and molasses produced each year. The international standard for regulatory bodies is approximately five per cent of gross value, and we are there,” the SIA boss said.

“Worthy Park has been trying, over the past 15 years, to close the SIA because they would like to exercise options like increasing prices, determining by themselves how they pay farmers, which is not allowed as long as the SIA exists. The protection that is offered to the industry, Worthy Park wants to retain that but not the regulations,” Callaghan told The Gleaner. “You don’t have that anywhere else in the world, where there is no protection for government, consumer, and other producers of cane, especially sugar cane farmers. It can’t work.”

Worthy Park has charged that even as sugar production falls, with more players exiting the industry, an increasing percentage of sugar proceeds is being used to fund the SIA budget rather than being paid to factories and farmers.

MAJOR RESTRUCTURING

However, Callaghan rubbished the argument, explaining that the SIA has undertaken major restructuring, closing the Kingston office last year and making at least half of the staff positions redundant. All of its operations have been relocated to Kendal Road at the offices of the Sugar Industry Research Institute in Mandeville, Manchester.

“So all this talk from Worthy Park [that] they want to see SIA go because of exponentially increasing costs is nonsense!” Callahan declared. “Worthy Park wants is to control the entire domestic market, ... which is the most lucrative, and they wouldn’t even have to export anything. I don’t know that any decent government could sit and allow one entity to enrich itself at the expense of hundreds of thousands of people.”

The management of Worthy Park has called for the SIA to cease operations or undergo dramatic reforms, calling into question its continued relevance. The call was triggered by this week’s confirmation that Appleton Estate would be shuttering its sugar factory operations, throwing the industry into turmoil.

Calls to Agriculture Minister Audley Shaw and Permanent Secretary Dermon Spence for comment yesterday went unanswered.


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