GuySuCo  CoI must address cane yields

 

Dear Editor,

IN recent times, there has been a plethora of commentaries on the state of GuySuCo’s financial viability by many self-proclaimed experts and commentators on sugar.

In almost all cases, the commentaries have been devoid of in-depth analysis of the industry’s problems, but have been mere generalisations. Despite poor analyses, commentators and experts present proposals for the industry’s future. The results have been proposals that are impractical, economically unsound, and providing great potential for chaos if pursued. In this regard, a commission of inquiry (CoI) is a welcome move, since it should provide detailed analysis of the problems before solutions are sought.

GuySuCo’s financial problems have their genesis in operational cost, production decline, and reduced sugar prices. To simplify, the company’s expenditure (operational cost) is rising while income is lowering (production & price). The end result is a certain and increasing deficit, which triggers repeated requests to Government for support. Such support is nothing strange or alien, as commentators and experts attempt to suggest. Other governments do support their industries in a finite way. Support can come in various forms, and anyone can research this at their convenience for other industries.

It is anticipated that the many self-proclaimed experts and commentators on sugar would be making submissions to the CoI. It will be interesting to see how the CoI distils these submissions to support the Prime Minister’s declaration at the National Cane Farmers Conference, when he said: “Gov’t will not abandon sugar in troubled times” (KN, August 15th, 2015).

If there is serious intention to support the Prime Minister’s declaration, the CoI must examine at minimum the cause of increased operational cost, what caused production to decline, and the reduced sugar price; and provide strategies to reverse those trends. While cause for increased operational cost and reduce sugar price are easily identifiable, the CoI must address in detail the issue of drastic production decline.

In 2004, the industry produced 325,000 tonnes sugar, and its cane fields produced 74 tonnes cane per hectare for the year. Though far from potential, the performance in 2004 is considered excellent when compared to recent past.

Enter the era of 2009- 2014, sugar production and cane yield slumped to their lowest level in 2013. This is explained in tables below:

  2004 2009 2010 2011 2012 2013 2014
Sugar production(tonnes) 325,00 234,000 221,000 237,000 218,000 187,000 216,000
Tonnes Cane per Hectare 74 57 66 63 55 54 56

 

 

The figures indicate that GuySuCo has a grave problem growing cane, which obviously precipitated low sugar production, hence the state of the company. The obvious question is: What caused yield to drop from 74 tonnes to 56 tonnes per hectare? This cane growing problem must be arrested immediately to return the industry to viability.

Most commentators identified the new Skeldon factory as reason for the industry’s state. A logical question to those commentators at this point is: Did the new Skeldon factory cause cane per hectare of land to move from 75 to 56?

In addressing the yield decline, it is hoped that the Col examines in detail the structure and operation of the agriculture department of the industry, and how decisions are made relative to growing and estimating cane. The company’s Head of Agriculture Operations should be providing answers, since one can conclude that cane disappeared from the field under his watch, based on recent yield numbers.

In any other industry, such performance would initiate some sort of action. Unfortunately, this is not the case in Guyana, because the same head is advising the present and past CEOs. In fact, all public utterances from the company relating to agriculture have been glowing and without any hint that there is such devastation in the cane field.

Guyanese now await  the usual GuySuCo explanations and reasons for poor yield, such as high rainfall, low rainfall, too much sun, too little sun, heavy breeze, labour shortage, wild cat strikes, etc. that will be provided to Col members; and they wait to see whether the Col members will deem those as acceptable. If this Col does not adequately address the issue of the increasingly depressed cane yield, which has caused the industry to be in intensive care, the entire exercise will be futile and akin to abandonment of sugar in troubling times. This will be a stark contradiction to the Prime Minister’s recent declaration at the Arthur Chung Convention Centre.  .

Yours faithfully

Fredrick Yuvraj

 

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