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SUVA, Fiji Islands (August 27, 2002 – BBC)---Fiji's vital sugar industry will collapse within two years unless the government quits stalling over a restructuring plan, an industry chief said.

John McFadden, managing director of Fiji Sugar, has urged the government to approve the restructuring plan that the state-run firm submitted last October.

Mr. McFadden blames the delays on "incredible" levels of political considerations within the industry.

About 840,000 Fijians depend, directly or indirectly, on the industry.

After losing FJ$ 37 million (US$ 16,923,800) in the last two years, Fiji Sugar has only continued to operate thanks to government loans and guarantees set to last until the end of March next year.

"We have got a national crisis on our hands and it is about time we got on with [the restructuring]," Mr. McFadden said.

Troubled times

Sugar has been a major pillar of Fiji's economy since the 19th century when, under British colonial ruler, Indians were bought to the Pacific to work on plantations.

But a failure to improve efficiency has left the industry unable to compete on the global stage without state aid.

Fiji's sugar costs about 14.3 U.S. cents per pound to produce, compared with a market price of 5.5 U.S. cents per pound.

Heightened ethnic tensions, since the coup led by George Speight two years ago, have exacerbated the ills of an industry that depends largely on ethnic Indian tenant farmers.

Current Prime Minister Laisenia Qarase has been accused of promoting the welfare of the country's indigenous population at the expense of Indo-Fijians who, while accounting for about 40% of the population in 2000, have little political representation.

And the sugar trade is set to take a further knock from 2007, when the European Union, which imports about one third of Fiji's sugar output at a heavily subsidized price, is set to begin reining in its support.

Fiji Sugar's plans would see the company split up into four firms, one for each mill owned by cane growers, mill workers and landowners. The government -- currently a major shareholder -- would retain small holdings in each business.

Mahogany threat

Fears over the future of the sugar industry, which brings in 18.5% of Fiji's foreign earnings, have prompted a drive to seek alternative money earners, with the islands' mahogany stock looking a likely target for exploitation.

The island's mahogany plantations, largely stocked by Fiji's former British colonial rulers in the 1950s, cover about 100,000 acres (223,800 hectares), representing the largest mature stand outside Brazil.

But while Brazil last year outlawed the sale, transport and logging of mahogany, which is protected under an international convention, Fiji has drawn up a harvesting plan.

"Everybody wants it going as soon as possible," said Kalivati Bakani, managing director of the Native Land Title Board, which represents the interests of indigenous Fijians on whose land the mahogany forests were planted.

Mahogany, used typically in making furniture, musical instruments and coffins, can fetch up to $1,500 per square meter ($139 per square foot).

For additional reports from the BBC, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/BBC News: Asia-Pacific.

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