The history of Mauritius is closely linked with the cultivation of sugarcane. Despite the fact that Mauritius has evolved from an agricultural-based economy to a services-based economy, the sugar sector has still a prominent role to play. Mauritius has no viable alternative than to continue to cultivate sugar cane, at least in the medium term, due to its multifunctional role which encompasses direct and indirect contributions to the country in general. These contributions include economic returns for all operators, gainful income for employees, development and stability of rural areas, protection of environment, soil and water conservation, prevention of degradation of landscape, maintenance of the multiplier effect of the sector, sustainable agriculture, net fund flows for the overall economy, food procurement capacity and reduction of the dependence of the country in imported oil.

The Challenges

The sugar sector has witnessed tremendous challenges over the last decades. These include:

- 36 % reduction of the sugar price as a result of the reform of the EU Sugar Regime.
- Fiercer competition
- Rationalization of human resources that result in job losses
- Closure of some sugar factories
- Climate change

TASK

Based on the information given and from your own knowledge answer the following questions:

(a) Using appropriate tools, carry out an analysis of the environment within which the sugar industry is operating.

(b) Show the benefits of the diversification strategy adopted by the sugar sector.

(c) Show the reasons that have motivated the authorities to drastically reduce the number of sugar factories.

(d) Show the merits of having a centralized procurement division for the remaining few sugar factories.