Guyana’s Sugar: Downsizing will save GuySuCo – commentary

DOWNSIZING WILL SAVE GUYSUCO

Accusations from the opposition and the Guyana Agricultural and General Workers’ Union (GAWU) that the government will be closing down the sugar industry were rebutted by President Granger who said that his government “has no intention of shutting down the sugar industry” and stressed that “diversification is key to keeping it alive.We will do everything to keep GuySuCo alive… we want to save the sugar workers’ jobs”.

Unlike the last administration, which, because of votes, was not truthful to the sugar workers about the future of the sugar industry, this administration, regardless of political affiliation or votes, is under no illusion that the sugar industry can be saved without closing those sugar estates that are unprofitable. Its decision was supported by economists at home and abroad, that the downsizing of the sugar industry will make it more competitive, financially independent and sustainable, and will create more good-paying jobs as well as contribute to economic prosperity of the country.

However, many have argued that the closure of some sugar estates will create enormous economic burden on the workers who will directly be displaced within the industry, not to mention the financial strain on those individuals and businesses which are indirectly related to the industry.

The reality is that GuySuCo, which was the economic backbone of the country and was the main foreign currency earner, is insolvent, and has become a threat to the national treasury. Governments both past and present have bailed out the cash-strapped sugar industry with billions of dollars in subventions annually. From 2005 until its defeat in 2015, the PPP government has pumped more than $135B into GuySuCo in order to keep it afloat. And since taking office in 2015, this government has plugged $32B into the corporation. To make matters worse, GuySuCo continued to borrow, despite the fact that in 2016, it reported that it owed creditors more than $70B.

The losses by GuySuCo in recent years have been mounting due to high production costs, low production output, mismanagement, and in some cases, inclement weather conditions. However, the government was faced with the difficult choice to close some of the sugar estates. It is a very risky, and some would say, politically incorrect move, but the government was caught between a rock and a hard place. It had to do what is right for the country and the sugar workers.

Many felt that the government should be commended for making such a tough decision to close some of the estates, even though it is being fiercely criticized by the opposition which spent over US$200 million on the doomed Skeldon estate. It should be noted that the sugar industry in some Caribbean countries including Trinidad and Tobago, Barbados and Jamaica, have actually disappeared, due to the high cost of production and inaction on the part of those governments to streamline the industry as this government is currently doing.

Contrary to public perception, the government has recognized the importance of the sugar industry, which is the second largest employer in the country after the government with some 18,000 employees, but it had to act. GuySuCo had become a drag on the economy and the government could no longer allow it to bleed the treasury with an annual subsidy of billions. It was a tough but prudent decision, which in the end will save the industry.

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Comments

  • Rosaliene Bacchus  On May 5, 2017 at 1:10 pm

    A very tough decision, indeed. The task now lies ahead of re-training sugar workers for new economic activities that will improve their lives and local communities. Change of this magnitude will be difficult for those affected. It’s like a step in the dark over an abyss.

    At this critical time for sugar workers facing upheaval and an uncertain future, I offer Janet Naidu’s vision, expressed in the final verse of her poem, “Destination.”

    I join you now oh baabula hamaar*
    revered, visible along creek water,
    to march in the heat of our own ship,
    to chart our own course
    in this bloody sea of revolution.
    ___________________________
    * Oh my respected father.

  • Deen  On May 5, 2017 at 3:27 pm

    The downsizing of the sugar industry is a more enduring solution than its total demise. Economically, it was prudent and inevitable. Sugar has become bittersweet in Guyana. Regrettably, the closure of all but three of the sugar estates will have distressing blow to the laid off sugar workers, their families and businesses that coexist with the sugar industry. Government will have to do its best to allay the adverse economic impact on all affected.
    When one door closes another opens. Guyana can now focus more on agricultural and industrial diversification. Fortunately, with Guyana’s offshore discovery of oil, and the commencement of oil production in a couple of years, the Guyana government can use some of that revenue to create new jobs and industries to absorb the unemployed.
    The sugar industry will always be an integral part of Guyana and we can’t stop producing the world famous Guyana rum. It’s liquid gold.

  • demerwater  On May 7, 2017 at 3:50 am

    In the early 1960’s, cane-farming was introduced at Uitvlugt estate; and five years into it, a cane farmer was still in doubt as to whether he had made the right decision.
    Some years later, I saw a ‘symbiotic’ relationship between Wales estate and cane farming – to keep the Wales factory in production for that elusive standard of 156 ‘grinding’ hours per week.
    In the early 1970’s, the Other Crops Division within GUYSUCO was organized. Its main object was to explore replacement crops for sugar-cane. There was black eye peas at Albion, cucumber at Wales and peas (the various ‘dhalls’) at Rose Hall. This last was a joint undertaking with some expert help provided through the UN.
    Add to that Black Bush Polder, proclaimed a model for success in land settlement schemes; in the lecture halls of higher learning – in Agriculture.
    Superimpose on all of that, the ‘best Agricultural Extension Service’ in the whole West Indies – the judgement of people, informed and knowledgeable about such matters.
    Those were the days! Of Gavin Kennard (Director) and Harry Madramootoo. (Principal Agricultural Officer).
    I hope I make the point that the diversification of Agriculture in Guyana should have been, technically, seamless.
    To be sure, there were some failures – two of which I have only heard about and unable to give an opinion – The Torani Canal and the Boeraserie drainage project.
    When GUYSUCO came into existence, there were serious doubts as to whether Guyanese could handle the marketing of sugar. Fortunately there was Ian MacDonald who became Marketing Director; and the Commonwealth Sugar Agreement which was renewable every year and would remain in place for seven years, if and when it was not renewed.
    What was? What is? – the missing element?
    Political will! – would be my answer.

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