Structural Changes in the International Sugar Economy
"TWO HUNDRED years after enslaving people to work on sugar plantations, rich countries are enslaving them again by ruining those same plantations and the poor countries that rely on them." That damning indictment is not from the pages of a Cuban government report or from the speech of some radical Jamaican leader. These are the opening lines of an editorial in the conservative, but highly respected, journal the London-based Economist— probably the most intelligent voice of Western Capitalism.1
In one sentence the Economist editorial captures not only the essence of the current crisis in the international sugar economy but also its principal cause, namely, the policies pursued by the rich countries, to be precise, the EEC and the USA. The symptoms of the crisis are fairly easy to discern and are widely known—a secular decline in the free market price of sugar, a secular decline in per capita sugar consumption in the most affluent market, that is USA, declining world trade due to the increasing self-sufficiency of major sugar importers and above all the rapid growth of highly subsidised sugar production in the EEC coupled with the emergence of artificial sugar substitutes in the North American market. The EEC pays its beet growers 20 cents per pound of sugar - almost five times the current world price—a policy that has allowed the originators of the sugar trade of the last two hundred years and more, the imperial powers of Europe, to turn tables on the world market and enter it as net exporters of sugar.
That some of the most advanced industrial nations of the world are waging an unequal war against some of the poorest nations, trying to enlarge their share of the global market in a commodity on whose export these poor nations were made dependent by these very industrial powers is one of the many features of the crisis of global capitalism today. This brief paper attempts to focus on some of the more important aspects of the ongoing structural changes in the international sugar economy and questions some of the more popular solutions being offered by such agencies as the EEC and the World Bank—and the London Economist.
*Reader, Department of Economics, University of Hyderabad.