A sugar-cane cutter employed to the St Thomas Sugar Company in Duckenfield harvests cane for milling earlier this year. - file

With time running out on the proposed sugar divestment deal and fears mounting about the fate of the industry, Agriculture Minister Dr Christopher Tufton is expressing confidence that an agreement will be signed by the December 31 deadline.

"I remain optimistic that we will sign a deal with Infinity Bio-Energy in time so that the next crop will not be affected," Tufton told reporters at a post-Cabinet media briefing yesterday.

"I'm advised that the issue of resources remains a challenge, but it is not so extensive to prevent the project from moving forward," Tufton said as he responded to claims that the Brazilian firm, Infinity, has not been able to source the money to finance the takeover of the sugar factories.

The Government had previously announced that Infinity would take over the five state-owned sugar factories and the ethanol plant, while leasing some sugar lands by September 30.

When the deal was not finalised by that date, the Government pointed to a clause in the heads of agreement which provided a 90-day window for additional talks.

Extended period expires

However, the extended period expires on December 31 and, if there is no deal by then, the Government or Infinity can pull out of the deal without ramification.

"Yes, they can pull out, but the Government also has the option of pulling out and that is an option that we could exercise if it is in the best interest of the country," Tufton said.

However, the minister argued that the critical points of concern have been overcome and Infinity and the Government expect to ink a deal before the deadline.

Tufton accepted that the parties' failure to arrive at an agreement has led to uncertainty in the sugar industry with the 2008-2009 crop, which should have started at Frome Sugar Factory from early December, now being delayed for approximately a month.

This will lead to a delay in work at other factories despite projections that the industry should produce between 105 and 110 thousand tons of sugar this crop.

This would be an improvement on the 2007-2008 crop and would be good news for Jamaica, coming at a time when the price of sugar is increasing on the world market.

Could affect output

However, without the deal in place and the Government cutting staff at the sugar factories - which are in a holding pattern, there are fears that the failure to ink a deal could impact on the output of the industry.

"There is some uncertainty and I can understand and appreciate that critical stakeholders would be concerned with us not having an agreement having started the redundancy exercise, but unfortunately negotiations are things that, while you set deadlines, you can't predict and this is a complicated negotiation," Tufton said.

He noted that workers in the industry have already been paid more than $646 million in notice pay and should receive their redundancy payments within four months as part of the transfer to Infinity.

arthur.hall@gleanerjm.com