Pacific
When Sugar Turns Sour
Drastic restructuring is needed
in the Fiji Islands’ sugar industry.
But what will be the cost?
Photos and text by Ian Gill (igill@adb.org)
Principal External Relations Specialist
SUVA, FIJI ISLANDS
The Fiji Islands’ vital sugar industry is battling for survival. About a third of the population depends to some degree on sugar, which also accounts for more than 30% of the Fiji Islands’ export earnings.
For decades, the Fiji Islands, along with other members of the African Caribbean Pacific group, has enjoyed a guaranteed market for sugar at preferential prices with the European Union (EU), which paid at least double the world market price to help the development of the sugar producers.
As a result of this arrangement, however, the sugar industry—which once performed up to world class—has become uncompetitive. It is plagued by high costs and low yields that stem from problems, including antiquated sugar mills and inefficient rail transport, a land tenure system that lacks incentives to improve, and politics that make reform difficult.
Now, under the World Trade Organization’s free trade regime, the EU plans to remove its subsidized prices from the end of 2007. This means the Fiji Islands’ sugar industry, which is technically bankrupt, has to undergo a drastic restructuring.
Under an ongoing technical assistance grant of $600,000 approved in 2002, the Asian Development Bank (ADB) is providing a neutral forum for stakeholder consultations on restructuring the industry, along with technical advice.
ADB’s proposed Alternative Livelihoods Development Project, subject to the approval of ADB’s Board of Directors, will provide support for affected people.
Find out more about ADB's activities in the Pacific
Learn about Pacific Region Environmental Strategy - PRES
ADB and Fiji Islands
Read the news release - Palau Becomes 63rd Member of the Asian Development Bank
Email this to a friend
Publications 
Top of page