CARIBBEAN ECONOMY,
1875- 1985 Problems of the sugar industry, 1875-1985
The decline of sugar in the British Caribbean began before 1850. The causes of this crisis in the sugar industry at this time were:
Britain’s loss of North American colonies in 1783 which resulted in an increase in the cost of estate supplies thereafter purchased from Britain.
Abolition of the Slave Trade and emancipation produced increased labour costs and labour shortages.
The decline of the sugar industry accelerated after 1850. The following are the causes of this decline:
Sugar Duties Equalization Act of 1846
Competition from Cuba and Brazil
Competition from beet sugar
The inefficiency of various aspects of the industry
(1) Sugar Duties Equalization Act n.b. Free trade means trading or buying and selling without the additional cost of paying duties or taxes on items to be sold. The Sugar Duties Act of 1846 was the worst news for the British West Indies sugar industry because it meant not only that all sugar prices had to be equalized (entered at the same price on the sugar market) but also at a lower price. Before this, the West Indies had been a protected market (meaning that duties would protect them from competition because the duties would make the competitors’ sugar more expensive). However, with the Act, this no longer happened and the price of BWI sugar and the cost of sugar production had to be reduced if any profit was to be made.
(2) Competition from sugar produced in Cuba and Brazil Cuba was a main competitor of the British West Indies because they were able to produce sugar more cheaply and thus undersell the BWI sugar on the world market and in Britain in the late 19th Century.
Cuba had an advantage for following reasons:
Cuba had more virgin soil
Cuba had more available land
The Cuban sugar industry adopted the most technologically advanced methods of refining and producing sugar (e.g. steam engines, vacuum pans, centrifuges)
Adequate, reliable slave labour until 1886 when Cuban slavery ended These major reasons made Cuba sugar cheaper to produce than BWI sugar.
The British West Indies on the other hand had:
Little or no virgin soil
Islands were small
Lack of capital meant no mechanization
Estates were in debt
Unreliable labour force especially where land was available Brazil had the same advantages as Cuba such as Virgin soil, large expanses of land, slave labour, and superior technology. Other areas that were competitors were Java (in Asia) and Louisiana (in North America).
(3) Competition from Beet Sugar European countries started beet sugar industries because: It would make them independent of imported sugar It would provide employment It would suit the rotation of crops they practiced in Europe Napoleon encouraged the development beet sugar in France during the Napoleonic war when cane sugar at a shortage. During the second half of the 16th century, beet sugar was a serious threat to sugar because it satisfied the European market therefore cutting off the need for European and even British imports of cane sugar.
Beet root produced not only sugar but also cattle feed from its residue. It also helped the economy in Europe because it employed a large working population and unlike sugarcane could be stored for months without spoiling.
Beet sugar had a lower cost of production and lower costs. It was easier to transport because it had lower freight (transportation weights) than sugarcane which made it easier to transport. Lower prices made beet sugar more popular among British consumers. and it also had the reputation of being of a superior quality to the West Indian/Caribbean cane sugar. As a result, both the consumption and level of imports of cane sugar into Britain decreased. In order to overcome the depression in the British market, British Caribbean sugarcane producers turned to the U.S., but even there they were met with competition from beet sugar.
Apart from destroying the sugarcane market, beet sugar competition led to a fall in the price of sugarcane. The fall in prices affected profits and this led to the abandonment of several sugar estates. Beginning in 1897, actions were taken to reduce sugar beet competition. The U.S. government put duties and tariffs on sugar imported into the country to protect the U.S. sugar industry. In 1902, The Brussels Convention was signed by which beet sugar producing countries no longer subsidized the production of beet sugar. As a result of all this, British West Indies exports of cane sugar into Britain had increased.
Measures (solutions) taken to improve the sugar industry from 1875 onwards
(1) Loans- From 1848 onwards the British Parliament provided West Indian planters with loans to mechanize plantations, assist immigration and improve communications. These were taken up by Barbados, Trinidad and British Guiana but generally refused by Jamaica.
(2) Amalgamation of Estates– Smaller estates amalgamated into bigger working units. Estates were turned into Limited Companies. In 1833, there were 600 estates in British Guiana and in 1890, there were only 140.
(3) Scientific agriculture– Government botanists were appointed (a botanist is a person who studies plants. The botanists were placed in Jamaica, Barbados and British Guiana. These botanists used new varieties of cane, fertilizers and more efficient planting methods. In 1898, the Imperial Department of Agriculture was established in Barbados. In 1922, The Imperial College of Tropical Agriculture was opened in Trinidad.
(4) Centralization– Introduction of Central factory systems allowed for greater efficiency and lower production costs. In 1871, the Colonial Company established the Usine St Madeline factory in Trinidad.
(5) New Markets- The loss of European markets to European beet sugar forced the British Caribbean planters to seek new markets. From 1875 to 1899, the new market was the U.S. and from 1898 to 1912, the new market for West Indian sugar was Canada.
Were the measures taken to take to improve the sugar industry a success or a failure? The measures taken to improve the sugar crisis succeeded for the most part. There were improved yields of cane and fewer diseased crops. This was mainly due to the efforts of the agricultural departments and the planters’ willingness to learn. There were lower production costs to produce sugar on the estates, especially those which had amalgamated. Many uneconomical estates were abandoned or became part of amalgamated units. More capital was invested in the sugar industry and this was really helpful in saving the industry from crisis. The British Government’s efforts as well as that of the planters ensured that the economy survived. There were enough funds to purchase equipment such as vacuum pans and steam mills. Success in the area of loans was limited because loans were disliked because repayment became a burden on colony revenues.
Comparison of the Sugar Industry in the British West Indies in the 19th century (1800s) and the 20th century (1900s up to 1985) 19th Century
Low production
Little use of steam power
Slow adaptation of central factories
Small size of population
Absentee owners
Little capital invested
Backward technology because of capital 20th Century to a certain extent there was still the following issues:
Low production
Small amount of Central Factories
Dependence of the BWI on sugar for export and employment
