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Caribbean Sugar: Implications of European Connection


Code : ITF0001

Year :

Industry : Food, Diary and Agriculture Products

Region : Europe

Teaching Note:Not Available

Structured Assignment :Not Available

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THE COLONIAL PAST The history of sugar in the Caribbean can be dated back to the 17th century. The Dutch, who already had colonies in the Caribbean, introduced sugar to these colonies in the 1640s.8 Prior to this, the European colonies were predominantly involved in cotton and tobacco cultivation. The French, English and the Dutch, who depended on tobacco, eventually faced crisis, as they could not compete, either in quantity or quality, with the tobacco produced in the mid-Atlantic colonies....

POST INDEPENDENCE ERA (MID 20TH CENTURYONWARDS) After the Caribbean islands became independent, the European Community continued to buy sugar from them at a preferential price16 with the help of some special agreements (Annexure III). The twomajor agreements, namely, the ‘ACP-EU Sugar Protocol’17 and the ‘Special Preferential Sugar’ (SPS) (Exhibit I), signed during the1970s and 1980s, started accounting for 85% of the total sugar exports18 of the ACP states. These agreements enabled the Caribbean countries to sell their sugar at a price higher than that of the world market...

CRISIS IN THE CARIBBEAN SUGAR INDUSTRY High cost of production that resulted in higher sugar prices vis-ŕ-vis lower world market price was an important factor for the crisis in the Caribbean sugar industry. For three successive years (1995-1998), the average cost of sugar production in different Caribbean countries varied widely. The average cost was 45 US cents per pound of sugar in Trinidad and Tobago, 22 inGuyana, 39 in St.Kitts, 16 in Belize, 33 in Jamaica and 35 in Barbados. In 1999-2000, the Caribbean sugar producers earned 22 cents per pound of sugar exported to EU against a weighted average cost of production of 31 cents per pound...

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THE IMPACTOF GLOBALIZATION The 1990s witnessed some decisive changes in the global economy. The Uruguay round of talks under the ‘GeneralAgreement on Tariffs and Trade’(GATT) resulted in the formation of the ‘World Trade Organization’ (WTO).WTO spawned a global agricultural trade. Due to globalization of agriculture, there was a shift in agricultural production to those regions of the world, which were more competitive due to lesser-input costs. This posed tough challenges to the developing economies based on agriculture, including the Caribbean nations...

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