Sugar cane fields have been a staple feature of the Mauritian landscape for over two centuries now. If sugar is no longer the leading export, it is still considered by many to be the backbone of the Mauritian economy. The sugar industry owes much of its success to the so-called Sugar Protocol attached to the Third Lome Convention, under which Mauritius benefited from export quotas with the EC at preferential guaranteed prices. The EC quota has been fixed at 507,000 metric tons. The EC guaranteed price has consistently been well above world market prices, yielding a "sugar dividend," estimated at US$200 million per year. The sugar industry was given an additional boost in the mid-1980s with the Sugar Action Plan. The government reduced the sugar export duty, thereby providing a significant tax relief to producers, and lifted the ban on mill closures, thereby allowing the industry to take full advantage of significant economies of scale.

The Sugar Protocol and the Sugar Action Plan have therefore played a critical role in Mauritius' economic growth and subsequent transformation from a low-income single-crop economy to a middle-income diversified economy. In many cases, the sugar dividend provided the start-up capital for manufacturing enterprises in the Export Processing Zone and for ventures in the Tourism Industry. The development of the hotel and manufacturing sectors have not only benefited from the sugar capital but also from the technical and managerial expertise already available in the sugar sector.