The less than sweet solution to Fiji's sugar industry problems

The loss of EU sugar preferences at the end of 2007 has made the push for reform more urgent than ever in the African, Caribbean and Pacific (ACP) countries. Fiji as a case study is useful to understand the difficulties faced in being competitive in the global market without the sugar subsidy. Using farm level survey, it was found that on average, technical efficiency (TE) was only about 72%, and that farm size should be expanded to gain from returns to scale. Empirical investigation and discussion shows that low efficiency is caused by lack of land tenure, poor infrastructural support, inefficiency in sugar institutions and the inadequate adoption of best farm practices. It is evident that the tight vertical integration of the industry necessitates an integrated and holistic approach to policy implementation. Copyright © 2008 John Wiley & Sons, Ltd.