Effects of the 1884 Beet Sugar Crisis on British Guiana and Barbados

"Beet sugar is and has been the greatest single challenge to the viability of cane sugar."

M. Shahabuddeen

CRISIS has apparently cohabited with the British West Indian sugar industry for much of that industry's existence. Crisis, if not ruin, has been forecast or asserted since the early 18th century Ð'- during the perennial Anglo-French wars, during and after the war for American Independence, during the Napoleonic wars, when the slave trade was abolished, when competition from Mauritius and East India emerged, when slavery was about to be abolished, and, of course when control over the traditional market for sugar was lost. What is remarkable is that this crisis-ridden industry survived all these shocks.

In 1884, however, the British West Indian economy entered another period of depression and instability. The primary reason for this was the sharp decline in the sugar industry and this decline was due to the increased competition from sugar beet which was manufactured by France, Germany, Austria, Holland, Belgium and Russia. According to the report submitted by the 1897 West Indian Royal Commission, which was sent out to "inquire into the depressed conditions of the industry", the depression, "of the industry is due to the competition of other sugar producing countries and in special degree to the competition of beet sugar produced under a system of bounties."

In the early years of the beet sugar industry, which started from the time of Napoleon, there was no serious threat to West Indian sugar. The governments of these countries had several reasons for encouraging the manufacture of beet sugar. Apart from the fact that it helped to make these countries self-sufficient particularly in times of war when their supplies from overseas could be threatened by enemy action, production was encouraged because the increasing populations of these countries needed employment in any industry that could be established. For these reasons, the governments of these countries decided to grant subsidies to encourage the new industries. In addition, they imposed high tariffs on West Indian sugar, which was imported, in order to protect the product of their own territories. The West Indian planters were prevented by high tariffs from competing in Europe with the sugar beet producers on that continent. They could not compete in England with the European producers who sold their dumped sugar at a price below the cost of producing it in the West Indies.

The close of 1884 saw the beginning of the commercial depression in the sugar colonies and some colonies were more affected than others, depending generally, but not solely, on the degree to which they had failed to break away form the old muscovado process. British Guiana and Barbados were as caught up in the depression as all the other British West Indian territories. For Barbados the economic plight was more acute than in the other colonies because of the severe drought of 1894 and a destructive hurricane in 1898.

The long installment of the crisis was far more pervasive in its impact than any of the earlier ones. This was so because Barbadian and Guianese sugar producers, like all cane sugar producers, did not possess the means to effectively combat the new competition. Basically this was a commercial was waged by major national governments with resources that the cane sugar producers could not hope to match. The main hope of the planters for survival and restoration of the prosperity enjoyed in the early 1880s was to secure the abolition of the government subsidies granted to the European beet sugar producers. The suppressing of these subsidies was finally achieved in 1903, with the signing of the Brussels Convention, as a result of strong diplomatic pressure, which the British government exerted on other European countries.

Because of the extent of the dependence of Barbados and British Guiana on sugar, the crisis had several similar effects on them. However, there were also some striking differences. The remainder of this essay aims to compare and contrast the main effects that the crisis in the sugar industry between 1884 and 1903 had on these two territories.

THE reduction of the total value of sugar exports was the main effects of the 1884 crisis on both British Guiana and Barbados. The root cause was the sudden drop in European sugar prices, which in turn was caused mainly by the increase in the amount of beet sugar on the European market. The following table clearly illustrates this increase in beet sugar on the European market and a subsequent decrease in cane sugar.

TABLE 1: Beet Sugar and Cane Sugar in the British Market (tons)

Year British West Indian Cane Sugar European Beet Sugar

1884

1886

1888

1890

1892

1894

1896

1898

1900 168,000

99,000

106,000

67,000

75,000

85,000

72,000

41,000

37,000 559,000

586,000

661,000

987,000

958,000

1,087,000

1,144,000

1,117,000

1,362,000

SOURCE: R.W. Beachey, The British West Indies Sugar Industry in the Late Nineteenth Century, p. 142.

Between 1884 and 1903 planters reported the disappearance of their small profit margins. Production levels fell marginally and even then most major producers were operating at cost levels above what was required to make a profit. Sugar prices in the British market tumbled: - between 1880-1884 sugar was sold at 20 shillings per cwt.; 1885-1889 it fell to 14 shillings per cwt.; 1890-1894 it fell to 13 shillings per cwt.; 1895-1899 it plummeted further to 10 shillings per cwt.; and between 1900-1904 it plunged further to approximately 9 shillings per cwt.

It was this intense drop in West Indian sugar prices on the British market that led to the resultant decline in the value of exports from Barbados