THE ROLE OF
JAMAICA CANE PRODUCTS SALES LIMITED (JCPS)
JCPS was incorporated on March 23, 1986. It is a privately owned company, equally owned by the Sugar Manufacturing Corporation of Jamaica (SMCJ) and the All Island Jamaica Cane Farmers Association (AIJCFA). JCPS operates as a not-for-profit corporation.
The Board of JCPS comprises:
A Chairman, who is selected by the cane farmers and manufacturers
Three (3) members of the AIJCFA
Three (3)members of the SMCJ
One member of the Union, and
One government representative, who is currently the Executive Chairman
of the Sugar Industry Authority (SIA).
A quorum must consist of two manufacturers and two cane farmers.
JCPS has a contract with the SIA to be its marketing agent for sugar and molasses. Priority is given to fulfilling the Government’s commitment up to 2009 under the EU/ACP Protocol and the USA TRQ Quota. The EU/ACP quota then at 125,000 tonnes was given priority attention and the USA quota was 11,584 tonnes. The domestic market was supplied with any amounts beyond the commitment.
The Company has a joint contract with the SMCJ and the AIJCFA to take possession of all sugar produced ex centrifugal - store, secure, market and pay the best possible price at the end of the programme to the producers. The agreement with the SMCJ is signed by each factory then operating.
The contract with the SIA can be terminated by either parties giving one year’s notice which is effective on October 31 in any year.
As agent of the SIA, JCPS has also entered into a contract to supply Caribbean Molasses with molasses produced at all factories. The contract was originally for ten years (10) at a time but now operates on a year to year basis.
There is also a contract between JCPSand Jamaica Bauxite Mining Limited for the use of their facility at Ocho Rios to store and ship bulk sugar for the export market. The current contract expires January 2011 but we have requested an extension for another year so that at the end of this sugar programme they will prepare for the next one.
Based on information provided by the cane farmers and manufacturers, JCPS prepares a budget annually, indicating the disposal of all sugar produced, possible income generated, expenses for marketing the sugar and the net proceeds is paid out by the middle of November to the producers.
The SIA indicates to JCPS that sugar payment schedule is as follows:
70% of the years agreed price is paid at first payment - example, this year the agreed price was $32,000.00 and the first payment was $22,400.00/tonne 96˚ sugar.
This amount is paid weekly to the factory based on reports provided to JCPS by the SIA indicating how much 96˚ sugar was produced the week before up to Sunday morning and payment is made by the Wednesday of that week.
The farmers are paid for their cane by the estate on an agreed ratio of 62:38, that is 62% for farmers and 38% for manufacturers.
Approximately four (4) weeks after the end of the crop at each factory JCPS is advised to pay 27½% of the agreed price which makes total payment to the producer of 97½% of the price. The final payment is calculated at the end of October which is the end of JCPS’s financial year and actual payment made at the beginning of November.
JCPS provides a monthly report on its operation and finances to the Board of Directors and takes inventory at its locations monthly. An annual report is supplied to the SIA showing that JCPS has met the country’s internal commitment and kept the Jamaica sugar market supplied.
The SIA, being the only entity that can import brown sugar, is advised by JCPS when production is not enough to satisfy the domestic market and importation is necessary. JCPS works with the SIA to identify and source sugar from the world market and SIA turns over the imported sugar to JCPS for marketing. The margin derived from the importation is added to income derived from locally produced sugar and goes into price paid to individual producers.
JCPS also imports refined sugar and supplies some customers through its distribution network around the island.
JCPS has a mandate to finance the fertilizer and chemicals programme each year. The fertilizer and chemicals procured by each factory is paid for by JCPS from its Working Capital. The fertilizer and chemicals procured by independent farmers through the AIJCFA is also paid for by JCPS. The amounts thus advanced are collected from second payment made to the factories and farmers.
JCPS is also required to provide assistance on a Crop Lien basis to cane haulage contractors on the recommendation of the Harvesting Committee at each factory.
The amount advanced is collected by the factories during the crop and paid over to JCPS.
We are also mandated to assist the sugar haulage contractors with mobilization funds to deliver sugar to the Port during the crop. As these contractors are paid by JCPS, the repayment is assured as JCPS makes collection weekly from proceeds of their haulage.
R Karl James
15-Jun-10
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