Kids in a candy shop
The words Polski Cukier last week once again sweetened the front pages of Poland's largest newspapers, this time in the context of the departure from the government of controversial Treasury Minister Emil Wasacz. With Wasacz's resignation, gone is one of the last remaining obstacles to forming a national sugar holding from the country's unprivatized mills.
Until now, backers of Polski Cukier were held back from pushing forward the idea of a national sugar company, firstly by former Finance Minister Leszek Balcerowicz and then by Wasacz and his army of deputy ministers and directors in charge of the sugar privatization process. Now with Wasacz gone and the ministry under new management, heads will probably start to roll in the sugar privatization department and the slow sell-off of the nation's sugar sector will probably grind to a halt.
However, before the new minister yields to pressure within the ruling Solidarity Election Action (AWS) party and starts sending international sugar giants home, he should study the problems facing Poland's sugar sector and make sure that Polski Cukier backers have an air-tight plan to bail out the frail industry. At present, Poland is the third-largest producer of sugar in Europe. But falling world sugar prices along with overproduction on the domestic market devastated its sugar sector in recent years. From last year, debts in the industry have surpassed zl. 2 billion ($465 million). The fragility of individual mills was evident when the Maloszyn mill in Lower Silesia was declared bankrupt earlier this summer. Signs are that many other mills are in similar conditions.
With so many problems, the cash-strapped mills don't have any prospects to pay off banks and other debtors. Indeed, they barely have enough money to pay miserable salaries to their own workers or farmers who make sure that the sweet stuff makes it to the market after every campaign. For their part, Polski Cukier proponents have yet to cough up a comprehensive and viable plan for saving this country's sugar producers and sugar beet farmers. A business plan circulated earlier in the year was severely criticized by foreign investors and Polish analysts as unrealistic and utopian.
The new Treasury Ministry management should now demand hard number crunching from Polski Cukier advocates before bowing to their demands outright. If Polski Cukier moves forward without a strong case, the only winners will be foreign companies. In a few years, they could be laughing all the way to the bank when they buy mills from bankruptcy courts. They won't have to pay amends to laid-off workers, nor will they be burdened by costly guarantees that they'll buy sugar beets from local farmers at secure price levels. Farmers and sugar mill workers deserve a better future than that.
