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the result practically the whole of the sugar product of Mauritius has been diverted from India to Great Britain and Canada, the only countries in which it is sheltered by a protective tariff. Of the total sugar exports for the year 1930, amounting to 185,538,889 kilos, no less than 143,739,267 kilos went to Great Britain and 41,585,801 kilos to Canada. The dependence of the Mauritius sugar industry upon these two markets is described in the follow- ing striking terms in Sir Francis Watts' report:—
Without the measure of protection afforded by the pre- sent (1929) Customs tariff in the United Kingdom and Canada the sugar industry of Mauritius would immediately collapse. with the consequent loss of the large amount of capital em- ployed in the growing and making of sugar, the complete loss of employment of all concerned, and the utter ruin which must infallibly ensue-consequences too appalling to contem- plate."
The measure of the dependence on the British market may be gathered from the fact that, with the import price of sugar at £10 15s. a ton-the price of the current crop-approximately £4 of this sum represents Imperial Preference duty. In other words, notwithstanding the comparatively low cost of its production the Mauritius sugar industry is only enabled to live by means of an indirect subsidy from the British taxpayer to the extent of 40 per cent. of the import price.
4. This unhappily is not the whole story. It remains to be added that, notwithstanding the substantial help which it de- rives from the Imperial Preference system, the industry has been passing through several years of almost unexampled depression and was described to us as being worse at the present time than at any previous period of its history. If this description related only to the circumstances of the present year, when an exceptionally promising crop from which a sugar yield of 250,000 tons was con- fidently expected had suffered damage to the extent of more than one-third of its yield and value by a hurricane, it would not have been surprising. We were given to understand however that, even if there had been no hurricane and the record anticipations of this year's crop had been realized, the industry as a whole could not, with the present level of export prices, have paid its way. In support of this view we were referred to the authority of Sir Francis Watts who, writing in December, 1929, after an exhaustive study extending over several months. recorded his con- sidered conclusions as follows:-
As the result of my enquiries I am satisfied that the sugar industry of the Colony, generally speaking, is carried on at a loss in existing circumstances, that is to say, when the price of sugar, not exceeding 99° polariscopic test, is around, or below, £13 per ton f.o.b. Mauritius, and the preference at
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present (December, 1929) granted to Empire sugar is main- tained. Any diminution of the existing preference would in- crease the loss pro tanto and would be disastrous.' Within the short period that has elapsed since the date of Sir Francis Watts' report the price of sugar per ton has fallen still lower and at the present time is in the neighbourhood of £10 158. Simultaneously, however, the prices of rice and other foodstufis also have fallen heavily, with a consequent general decrease in the cost of living of the Indian and Creole labourers on the Mauritius sugar estates, and the opportunity has been taken to carry out drastic wage reductions which have enabled the cost of produc- tion to be adjusted to meet the altered price conditions, so that the margin of loss is no wider than when Sir Francis Watts estimated A margin of this amount it as broadly speaking 20s. a ton." is sufficiently serious and it is obvious that no industrial under- taking can carry on indefinitely with each year's balance sheet showing a steady erosion of its capital resources.
To meet the situation disclosed in his report Sir Francis Watts proposed "that the Imperial Government should be invited to make grants-in-aid to the Colony calculated to make good the losses which have been incurred after all reasonable efforts have been made by the grant in any one year those engaged in the industry
to be equal to the loss that may reasonably be concluded to have the loss to be been sustained in the previous year regarded as the difference between the general cost of production and the general or average selling price." Although this proposal was not adopted in the particular form in which it was put forward, relief on closely similar lines was granted for the crop year 1930-31 in the shape of a loan without interest from the Improvement and Development Fund at the rate of £1 per ton of sugar produced by each factory, the loan to be subject to eventual repayment by an export duty which, however, has not yet been either fixed or levied. Additional assistance was given in the same year by the abolition of the ordinary export duty of 30 cents per 100 kilos, and the remis- sion for that year of the special duty of 36 cents per 100 kilos imposed for the repayment of a series of previous Government loans to the industry in the years 1926 and 1929.
5. Without questioning so eminent an expert authority as the late Sir Francis Watts on any matter involving a technical acquaintance with sugar, cultivation and manufacture, we feel con- strained to point out that his conclusions lose something of their practical force in that they are generalized results arrived at by a process of averaging, and although no doubt presenting an accurate statistical picture of the industry as a whole do not represent the actual conditions of any one particular sugar estate. His statement that "the sugar industry of the Colony, generally speaking, is carried on at a loss" must be read with the reservation, which he
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