CSEC CARIBBEAN HISTORY
THEME 6: CARIBBEAN ECONOMY 1875 -1985
TOPIC: Problems of the Sugar Industry, 1875-1985
After 38 years (1838-1876) new developments have taken place in the economic sector. Sugar is
no longer King. Not only has she been dethroned but the industry is facing serious difficulties
and challenges that a mere introduction of laborers however massive did not solve.
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 beet sugar
● Inefficiency of various aspects of the industry
● Competition from Cuba and Brazil
- Britain's Free Trade Policy (Sugar Duties Equalization Act) came into full effect by 1854. Beet
sugar from Europe paid the same duties as cane sugar from the West Indies. Transportation cost
for beet sugar was minimal since it was grown in Europe. This made beet sugar much cheaper
than cane sugar. The demand for cane sugar continued to fall from 1854. By the late 1890's,
Britain was buying a little more than a quarter of what she bought in the 1850's. By the 1900's
she was buying/importing less than ten percent (10%).
- Beet sugar enjoyed several advantages over cane sugar. The British government helped to pay
for the cost of producing beet sugar. This is known as a subsidy. The governments of France,
Austria, Holland, Belgium and Russia increased their assistance to the beet sugar industry in their
respective countries. This allowed them to afford technological and scientific improvements. This
boosted production. 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. 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.
- With the ever decreasing demand for cane sugar came a continuous fall in the price of cane
sugar throughout this period. Between 1882 and 1896 the price of sugar fell by almost fifty per
cent (50%) from 21 shillings to 11 shillings. Needless to say this negatively affected their profits.
Profits also fell considerably. This forced more estates out of the market. There was also strong
competition from other crops that were being produced in the colonies. This helped to push up
the wage level. In order to attract labourers, planters had to offer high wages.
- Strong competition from foreign grown cane sugar. Their MAIN competitor was Cuba. The
Cuban industry was heavily mechanized while many of the territories of the British West Indies
had not yet begun to use simple tools such as ploughs and harrows. Cuba had railways, steam
engines, vacuum pans and centrifugal systems. This meant that their cost of production was much
lower than that of the British West Indies. Their level of output was much more and of a better
quality because Cuba still had fertile virgin soil that was just being cultivated while many of the
estates in the older British West Indian colonies were so exhausted. The Cuban estates were also
much larger than their counterparts. In addition these two territories had both enslaved and
immigrant labor. Remember that slavery was not abolished until 1886. Also, they received a huge
injection of American capital and American machinery after their independence from Spain in
1898. Their sugar was guaranteed to be sold in the United States. The French colonies had the
same story as their Spanish neighbors. Though they had ended slavery from 1848 they had an
ample supply of immigrant labor. They too enjoyed the economic benefits of mechanization and
investment capital from France. As is expected they too had a guaranteed market in their Mother
Country.
By the late 19th century the planters were convinced that they needed more than laborers to solve
the crisis. They began to adopt certain measures in a desperate attempt to ‘breathe new life' into
the dying sugar industry. All the territories EXCEPT Barbados, Antigua and St. Kitts showed
signs of marked decline. A number of estates were heavily laden with debt (encumbered) and
being abandoned.
TOPIC: Measures taken to Resolve the Crisis in the Sugar Industry
- Imperial policies: In response to the crisis Britain sent out two Commissions to inquire into the
true state of affairs and make their recommendations. The first Commission (1882-1883)
supported the planters' viewpoint that beet sugar had destroyed them. The second Commission or
Norman Commission (1896-1897) recommended a wider use of technology in an effort to cut
expenditure. Their recommendations also led to the creation of the Department of Agriculture in
1898. It was situated in Barbados. It adopted a more scientific approach to the production of the
sugar cane.
- 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.
- 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.
- Amalgamation of Estates: Small 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.
- Centralization: Introduction of a central factory system allowed for greater efficiency and lower
production costs. In 1871, the Colonial Company established the Usine St Madeline factory in
Trinidad.
- 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. In 1903 at the Convention
in Brussels, Britain managed to convince European countries to remove the protective subsidy
from beet sugar. This led to a slow but welcome recovery of cane sugar.
- New Technology: New centrifugal dryers separated the molasses from the sugar crystals by
rapid spinning. This replaced the three weeks that the mixture used to spend in the curing house
to effect the same separation of crystals and molasses. The development of the triple effect
vacuum pa where three pans could use the same steam power. This method though efficient was
very costly. Large estates in Trinidad and Guyana were able to afford [Link] was also wider
use of railways in transporting the canes from the field to the factory. This helped to reduce time
and labor costs.
TOPIC: Cuba’s Sugar Industry
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
19thCentury.
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 British West Indian 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
TOPIC: Growth and Survival of Alternative Agriculture in the British Caribbean
Economic/agricultural diversification began even during the slavery and sugar period because
slaves grew other crops on their plots on the plantations either for their families to consume or to
sell in the Sunday markets. When slaves were emancipated in 1838, the now free men wanted to
get as far away from the plantations for the most part so many of them decided to become
independent peasant farmers and cultivate crops to make a living. The diversification process was
further pushed by the abandonment of sugar cultivation on some estates. On such estates, some
planters began to focus on new crops which required less labour. Some planters would also sell or
rent land to peasant farmers who wanted to cultivate other crops.
Several features of agricultural/economic diversification should be considered: ● Mostly peasant
farmers practiced the cultivation of alternative crops The peasants had increased
independence as a result of their cultivation of alternative crops. They were able to exist on
the earnings from the crops as many were seasonal and as such they were always able to reap
a crop. There was a ready market both locally and overseas for several of the crops, such as
banana, coffee and coconuts. The peasants were able to rely less on estate work. This also
made them more independent. The peasants were very instrumental in making crops such as
bananas important exports. In colonies such as Jamaica, bananas were able to become chief
revenue earners, putting sugar into second place. The peasant activities in Trinidad and
Guyana also saw crops such as rice becoming vital to the economies.
● The majority of planters continued to cultivate sugarcane.
● Some planters in some colonies decided to grow alternative crops. The planters recognized
the profitability of the alternative crops. Planters had long looked at the banana industry
with distaste. However, when the United Fruit Company started its own banana estates,
planters recognized the value of the crop. Some planters even stopped planting sugarcane
in order to plant bananas and coconuts. The sugar estates that had been unprofitable found
that this was a very good alternative.
Country Crops produced for the export market
Dominica Limes, specialized in citrus crops,
cotton cocoa and coffee
Grenada Specialized in spices. She became known
as the spice island. Nutmegs, cocoa and
coffee
Jamaica Ginger, pimento, bananas, coffee,
logwood, coconut, cocoa. citrus and rice
St. Lucia Limes, cocoa, cotton and coffee
St. Vincent Arrowroot, coffee and cotton
Trinidad Cocoa, coconuts, coffee and rice
Guyana Rice, timber
Belize Mahogany
Factors which affected the survival of alternative crops
Positive factors
● The crops did not require expensive machinery to grow and harvest unlike sugarcane.
These crops were ideal for peasants to develop since little capital was required.
● A large labour force for cultivation and processing was also not required. Again this factor
encouraged the survival of these crops since peasants and his family and an extra hand or
two could cultivate and process the entire crop.
● Unlike sugarcane production, large amounts of land were not necessary. An acre or two
cultivated any of these crops.
● A major disadvantage of these crops over sugar was that they did not last long. However,
this was overcome because of nearness to the market, mainly the U.S. and fast efficient
transport. Refrigeration helped to keep the crop in marketable condition, especially
bananas.
● The topography of the land was also a factor that determined the survival of crops other
than sugarcane. In some places sugarcane could not be cultivated because of the terrain.
However, other crops could successfully be cultivated in mountainous islands such as
Dominica.
● New departments of agriculture carried out research into the new types of crops, new
methods of cultivation, etc. Such departments were set up in Trinidad, Jamaica, and
Barbados.
Negative factors
● The main negative factor affecting the popularity and success in sale in alternative crops
was a push to promote sugarcane in the early 1900s. At the Brussels Convention in 1902,
European countries decided to abolish subsidies on beet sugar which meant that it would
not be able to compete with sugarcane. This restored confidence in cane sugar which led
to an expansion of sugarcane on idle land. Other factors which pushed sugar production in
the early 1900s were the adoption of the central sugar factory system, departments of
agriculture began to focus on finding new varieties of sugarcane and the outbreak of
World War I caused a reduction in beet sugar exports from Europe. Therefore, during the
first 30 years of the 20th century (early 1900s) it was difficult for alternative crops to
further establish themselves in the West Indian economy since most attention was being
paid to re-establishing sugar.
● The Caribbean region is prone to a number of natural disasters such as hurricanes and
droughts which can wipe out an entire harvest. Natural disasters discouraged the survival
of alternative crops. This also affected sugarcane but the alternative crops had a less solid
foundation and less capital so the alternative crops would therefore be more negatively
affected by natural disasters.
● Diseases affected some crops. Plant diseases such as fungi and pests that affected the crop
for which they had no solution. Panama and leaf spot disease plagued the bananas while
witch broom attacked the cocoa.
● Some of the new crops struggled against competition against alternatives that were cheaper
and more easily available. For example synthetic flavoring replaced lime juice. There was
a new scientific way to produce citric acid by chemical means. This was quicker and
cheaper. There was strong competition from the East: the East Indian islands
and Zanzibar gave the spice island of Grenada stiff competition while the Gold Coast's
cocoa production stifled Trinidad's success that she enjoyed in the 1920's.
● The small farmers experienced their own set of problems. The planters used their influence
over the local assemblies to pass unfair legislation against the emerging peasantry in a bid
to crush them. Many of the peasants were located in the rural areas where there was a
woeful lack of infrastructure such as good roads to travel on to the markets. Banks were
prejudiced in their loan approvals. They were unwilling to lend money to the peasants.
Unfortunately praedial larceny: theft of crops- was something that the peasants had to
deal with.
TOPIC: Extractive and Service Industries in the Caribbean
There were also new industries based on natural resources and the offering of services. These
became very important to the world economy during the First and Second World War. This new
development was the answer to the stiff competition that the traditional agricultural enterprises
were facing within the region and from the other side of the world.
The Oil Industry in Trinidad and Tobago
There were many factors which encouraged the growth of the oil industry in Trinidad and
Tobago. They are as follows:
● The growth in world demand for oil- This helped grow the oil industry due to major
developments in motor vehicle, aircraft and ship technology by World War II (1939-
1945) which caused an increase in the need for oil products. Trinidad and Tobago’s oil
production and export levels rose higher year after year, in fact, Trinidad supplied the
British and Allied Forces with much of the fuel needed for WWII. By the 1960s, the
island was supplying over 20 million barrels of oil each year. This pushed oil exports to
the position of number 1 revenue earner for Trinidad and Tobago.
● The capital pumped into the industry- Interested people both in Trinidad and abroad saw
the vast potential of the oil industry. The government was also very interested and
involved in the industry. There was also American interest in the industry.
● American interest in the oil industry- There were several American companies that became
involved in the production of oil. These companies put huge sums of money in
developing the industry by laying pipelines and setting up oil rigs and pumping the oil for
production as well as providing experts in oil production.
● Seemingly never ending/inexhaustible supply of oil in Trinidad- The first oil had been
found in Airpero in 1866. Commercial exploitation started in the early 20th century,
however the industry expanded slowly during this time as demand for oil was low. The
production of oil on a large scale grew after World War 1 and by World War II, oil was
the leading export in Trinidad.
● The available labour for oil operations- The labourers in the oil industry were paid higher
than those in other industries on the island. There were various jobs to be found in the oil
industry for both skilled and unskilled workers.
Development of the Bauxite Industry
Guyana
Bauxite was first found in Guyana in 1910. In 1916, the first bauxite company was set up. called
the Demerara Bauxite Company. In 1917, bauxite was exported from Guyana for the first time
and soon after another company called the Suriname Bauxite Company was set up. The
depression of 1929 in the U.S. however caused a slump in the Bauxite Industry in Guyana.
Jamaica
Bauxite was first found in Jamaica in 1869 and first mined in 1890. There was a huge demand
after 1939 because of World War II because bauxite was used to make weapons and vehicles. It
was mined by 3 companies but the largest one was the [Link] ALCOA.
The Tourism Industry
Tourism became a factor in the economic development of the West Indies mainly after World
War II with the growing wealth of North America and Europe. Before this, the tourism industry
was not seen as a money earner for the Caribbean. Visitors came to Jamaica and several other
islands on the ships that also carried bananas to North America and England, as tourists as early
as 1890s. These early tourists often came to recover from illnesses as the tropical climate was
seen as suitable for such recovery.
The increased amount of transportation to the islands helped the tourism industry to grow. The
steamships that took produce such as bananas abroad were also built to accommodate passengers
who wished to travel to the islands as tourists. The growth and development of transportation saw
larger ships that could carry more passengers. The development of passenger airplanes also
helped as people began to come to the British West Indies on charter flights. By the late 1960s,
national airlines were developing in the region and helped increase the flow of visitors to the
islands.
The building of accommodation and later places of entertainment was another important
development in the tourism industry. In the 1890s, the first tourists had to be satisfied with the
few inns available in the islands. However, by the 1920s, a few hotels had been built. The
colonial government also gave tax incentives to hotel builders. In Jamaica, for example, the
Myrtle Bank Hotel in downtown Kingston was one of the best places to stay. Between the 1940s
and the 1970s, other infrastructure was put in place which helped boost their industry. These
included better local transportation such as the tramcar. There were several places of
entertainment built.
The Caribbean governments after the 1960s began to advertise their countries as tourist
destinations. However, there were some problems in the beginning of the development of the
tourist industry in the Caribbean as the tourists were seen as the new colonial masters and blacks
working in the tourist industry sometimes experienced prejudice as tourists were mostly white.
Therefore, when the governments had to advertise tourism they had to be aware of these
problems. Many governments provided funds from their budgets to pay for advertisements in
foreign newspapers and magazines. Hotels also placed ads in newspapers and magazines. The
sun, sea and sand concept began to be a major attraction for tourists by the early 1970s. The
Caribbean was advertised as an area where there was never ending paradise with the sun, sea and
sand readily available to tourists. The focus was on the climate of the islands and this was often a
good selling point as many visitors came from much colder climates.
The tourism industry provided significant revenue for the islands by the 1980s. It was among the
top earners of revenue for islands such as Jamaica, Barbados and Antigua for many years. The
industry continued to provide thousands of jobs and there are many spin off areas that benefited
tremendously from the industry.
Light Manufacturing Industries
Apart from new crops and industrial enterprises based on natural resources, a number of different
light manufacturing industries were established.
● Gypsum
● Textiles
● Cosmetics
● Pharmaceuticals
● Cement
● Milk canning
● Cigarettes
● Records
● Oil based chemicals
● Footwear
● Cigars
The decision to introduce light industries into the Caribbean came against the backdrop of the
harsh reality that the agricultural and new industries could not absorb the large labor force that
existed in the region. The economy was growing far too slowly for the ever increasing
population. The ‘industrialization by invitation' program of Puerto Rico was seen as an attractive
model to be copied by some British Caribbean territories.
Those territories that did not have any natural resources had to try something. Barbados for
example introduced assembly lines. This is where machine parts are brought into the country to
be assembled in the factories for re-export. They are therefore sometimes nicknamed
‘screwdriver industries'. The government also attracted foreign investments from companies such
as Good Year Tyre by offering generous concessions and incentives. For example they lowered
the custom duties on raw materials and machinery for use in these factories.
They provided the necessary infrastructures and assistance to different companies. For example,
Jamaica's Department of Industry and Commerce set up a saw mill and two lime oil distilleries
while her counterpart in Trinidad provided supervision for the glass works factory. The
availability and guarantee of cheap labor was an added incentive for these foreign companies.
TOPIC: Effects of Industrialization on the English Speaking Caribbean
By the early 20th century, agriculture was not providing enough money or jobs for the growing
population in the Caribbean. Land was limited and it could only produce so many crops which
could only be sold for so much money. As a result, people started thinking about developing the
manufacturing, oil and mining industries in the region. It was considered more productive at the
time to use land to build factories than to plant more crops.
However, there were several barriers to industrialization including; limited capital, lack of fuel,
limited knowledge of industry, few workers with technical skills, few entrepreneurs. This meant
that countries in the region had to depend on foreign investors to provide money to start these
industries. Before investors would decide to spend their money on building these industries,
Caribbean countries had to promise the investors certain incentives such as tax breaks, protection
from foreign competition and the promise that they would not have to pay taxes on raw materials
and equipment. Countries such as Jamaica and Trinidad and Tobago, tripled their manufacturing
output between the 1950s and early 1960s. This was partly because these countries along with
Guyana had natural resources. Industrialization, therefore, had an impact on Caribbean countries.
Positive Effects
● An influx of foreign exchange helped to boost the economy.
● Jobs were provided for many. In addition there were spin offs in other industries. For
example there was an increase in the demand by hotels for vegetables and other food
items and services.
● There was a corresponding increase in the number of persons employed in the
construction, transportation and catering services.
● The Americans who invested heavily in the oilfields of Trinidad also invested heavily in
Carnival and the steel pan (band). The latter was literally started by oilfield workers.
● The governments in the respective countries did their best to upgrade the infrastructure in
their islands. They promoted cleaner beaches, the construction of shopping centres, craft
markets and so on
Negative Effects
● Much of the huge profits that were made from the Bauxite industry in particular went back
to Canada and the United States. It is not until the era and reign of Michael Manley
(Prime Minister of Jamaica 1972-1980) that Jamaica received what could be termed a
‘fair' offer for her bauxite.
● Children of expatriates from these companies secured places in the islands' best schools.
● Racism and prejudice raised their ugly heads in the tourism industry. Americans visiting
Barbados in the 1960's made it clear that they would NOT sit in a restaurant where blacks
were present.
● In order to attract and secure returning clients the hotels and other places of services only
used brown skinned or white females for front office operations.
● Managerial posts were offered to expatriates first. Technical expertise and advice of locals
were not considered or asked for.
● Much of the jobs in this industry were for men. The women were at a distinct advantage.
They were seen as unsuitable for the kind of work that was required.
● Work in the tourism industry is mainly seasonal. For example, a driver could be effectively
employed during the ‘tourist' season transporting tourists all over the island but during the
off season finds that he cannot make enough to put food on his table.
● Wages were desperately low and often the working conditions were not the very best. For
example, no lunch room was provided at many of these factories where literally
thousands of people worked. They were forced to ‘find a corner' amidst the strong smell
of tobacco or chemicals, where they would stand and have lunch.
