Old Kai: Chronicles of Guyana…Calls for the privatization or closure of the sugar industry are misplaced

OLD KAI does not discourage frank exchange of ideas and debates regarding Guyana’s sugar industry, which is why I welcomed the recent comments of outgoing GCCI Chairman, Mr Clinton Urling.However, I am convinced that he is wrong. Of contention is his position that underperforming sugar estates should be privatized, as the current Government subvention is unsustainable. This year, the PPP/C Government has set aside $6 billion for the sugar industry to continue its modernization programme.

To his credit, however, Urling did point out that such a move should not be done in an arbitrary or illogical manner, but in a well strategized manner. One of his contentions is that private estates might be able to produce sugar at a cheaper and faster rate. I would stress on his non-committal word ‘may’ because, in actual fact, this would not be possible.

One of the strategies which have been incorporated by the GuySuCo management, moreso over the past few years, has been the pooling together of human resources and machinery from neighbouring estates to maximize harvesting in a strategic manner on a particular estate. Bearing in mind the challenges with labour and the fact that an inconsistent supply of canes to the factory when it is grinding significantly increases production costs, it makes this move by GuySuCo a very effective one.

This suggestion by Urling to individually privatize estates would essentially scuttle such plans and serve to increase production costs.

The next issue is the lamentation of the annual subvention to the sugar industry during this period of challenges. This concern is similar to those voiced by the opposition AFC and APNU, which they have used as the basis for threats to illegally cut it from the national budget. It is not uncommon for nations to subsidise its industries in times of challenge, or to compete on the world market. In fact, this is a common trend, one just has to take a look at what occurs in the agriculture sector of the United States. The fact that GuySuCo is the largest employer and is a significant earner of foreign currency for Guyana’s economy should also be taken into consideration.

This subvention was never intended to be permanent. It is necessary now to assist the industry at a time where several challenges have come bearing down on it almost simultaneously, including the removal of the Europen Union preferential market and the accompanying 36% price cuts; the dramatic change in weather patterns brought on by climate change; the need to mechanize the harvesting operations of the industry so there can be a synergy between machine and human labour.

This is not going to be forever, as the industry, despite these challenges, has made tremendous gains; and anyone who decides to judge progress by the last two years’ production record is making a mistake.

There are several areas in the production cycle where work in ongoing, and when these fall into place, the effect will result in increased production. These includes ongoing work to convert the land layout for machine harvesting; the acquisition of more bell loaders to assist cane harvesters; increasing the fleet of other necessary machinery; improving the capacity of all the factories, including crucial repairs and replacement of components, inclusive of the Skeldon factory; the continued use of machines in tilling but, more importantly, planting; The continued increase in the acreage of the industry’s cultivation which is replanted after five rations, which will gradually increase yields and directly impact production. There are also several other initiatives ongoing at all levels of management and the Materials Management Unit, including the further fine-tuning of procurement activities and the improvement in the communication process between management and workers.

Government’s subvention is therefore not a shot in the dark, but is meant to fund crucial initiatives which, when combined, will first stabilize and then accelerate production, thereby ensuring sugar becomes not just profitable once again, but to ultimately surpass the 400,000 tonnes’ production total which has never been achieved in the 300-year-old history of the industry.

The contention that GuySuCo should get involved in value added production is a good one, but is not entirely accurate, as the industry has already embarked on this path. Just a few years ago, the Enmore packaging plant was commissioned to supplement packaging of high-quality sugar from the Blairmont estate. There are also the ongoing studies on ethanol production, where the facility at Albion was commissioned by President Donald Ramotar. We were also greeted with the fact that the Skeldon cogeneration facility produced close to half of the demand for electricity in Berbice last year.

President Ramotar is also on record as saying that his vision for the industry is to ensure it eventually improves its individual cogeneration capacity to contribute to the national grid, as our demand grows and as part of efforts to reduce the cost of energy.

In essence, Governments current subvention is simply not to secure the future of this industry, but also with the long-term benefit of other sectors in mind and the entire population in mind. This was never going to be an overnight process.

If we are talking about developing a vibrant manufacturing sector, let us also be reminded that apart from energy, the ready and cost effective supply of sugar as an additive will also be crucial in the future.

There is also the fact that GuySuCo continues to assist in the area of drainage and irrigation of several housing areas located in close proximity to its estates. Because of the importance of effective drainage to its cultivation, there are several drainage canals maintained by the industry, and pump stations which are manned by GuySuCo include those at LBI and Enmore. Housing areas through which they pass benefit. This is a GuySuCo expense, and comes at virtually no cost to taxpayers, yet there are those who are ready to kill this industry because they feel that taxpayers’ money should not assist it to get back on its feet again.

So Old Kai would urge those who are calling for the scaling down or complete closure of the sugar industry to first assess the sector’s contribution in totality, and its future prospects and how this interplays with our other sectors, before they go about making rash judgments.
Sugar still has a major role to play in our economy.

SHARE THIS ARTICLE :
Facebook
Twitter
WhatsApp

Leave a Comment

Your email address will not be published. Required fields are marked *

All our printed editions are available online
emblem3
Subscribe to the Guyana Chronicle.
Sign up to receive news and updates.
We respect your privacy.