The recent information on the status of the 2024 sugar crop presented by Minister of Agriculture Indar Weir suggests that the performance of the industry will be on par with last year or will surpass it slightly.
These production statistics, which are very paltry, are likely to impress Minister Weir and the government, but not people who are interested in the financial aspects of the sugar industry.
The low production statistics indicate that the sugar industry is likely to incur a loss in excess of $10 million in 2024. It would be interesting to ascertain whether this anticipated loss will be shared between CoopEnergy and the government.
Some obvious unanswered questions remain about the new arrangement for the management and financing of the sugar industry. First, what is the level of committed financial assistance to CoopEnergy by the government, given that the sugar industry will continue to incur substantial losses in the future?
Second, apart from the financial contribution provided by the government through the purchase of shares for the 1 102 former employees of the Barbados Agricultural Management Company (BAMC) and the Climate Mitigation Subsidy, what is the level of financing CoopEnergy has been able to raise on its own?
Third, have the share certificates been delivered to the former employees of the BAMC? If yes, when are these new “significant” shareholders likely to receive a dividend?
Fourth, has CoopEnergy secured the required $100 million to retrofit the Portvale factory over the next three years to transition the sugar industry to an energy industry?
Fifth, is there a definitive plan to significantly increase the acreage of land under sugar cane cultivation to satisfy the production targets for the industry and improve its financial viability? What role will the government play in incentivising private landowners to commit sizable tracts of land to sugar cane cultivation when more lucrative, less risky alternative uses of their land can easily be contemplated?
Sixth, with the operationalisation of the national renewable energy policy at a standstill and in a state of uncertainty, it is likely that CoopEnergy’s plan to anchor the turnaround in the financial performance of the sugar industry on energy production will not materialise. Thus, does CoopEnergy have a contingent plan to safeguard the tens of millions of dollars of investors’ funds earmarked for the sugar industry?
Seventh, an important unanswered question relates to the agreement entered between the government and CoopEnergy for the use of the public assets (sugar plantation lands, Portvale factory, office buildings, harvesters, delivery trucks) in the new arrangement. In the interest of transparency and accountability, the public needs to know whether the government has retained ownership rights in any of the assets.
Anthony P Wood
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