Agriculture Minister
Minister of Agriculture, Robert Persaud, has reiterated that the European Commission (EC) remains one of Guyana’s valuable partners, but noted that in any partnership, differences of opinion and perspective will exist.

He was referring to the EC Ambassador, Geert Heikens’ comments that in the context of Guyana’s woes in the sugar industry, it is important for an analysis to be done to move the industry forward.

Minister Persaud noted that the Government has always maintained and made it clear that there was grave concern about the EC’s price cut and its projected debilitating impact on the local industry.

Recognising that the Administration was aware of the forthcoming changes and the inherent challenges, the Minister indicated that the unilateral and abrupt nature of the cut and impact on sugar in Guyana and other countries have been severe, to the extent that the industry in several regional neighbours has been closed.

The EC has imposed a 36% preferential price cut for sugar on African, Caribbean and Pacific (ACP) countries, of which Guyana is a member.

Minister Persaud reinforced that it is Government’s commitment to sugar workers, in general, and the industry, as a whole, that is responsible for the existence of the Guyana Sugar Corporation (GuySuCo) and its continued operations. Government’s budgetary investment has thus far financed the company, and the ongoing struggle to retain the industry, which is a significant part of Guyana, its economy, the livelihood of citizens and generation of natural and processed goods, is testimony to that dedication.

The Minister posited that the Commission’s funding, which became available on December 24 and has thus far amounted to 25M euros, of a committed 100M euros, has been grossly inadequate and quite below the needed amount to compensate for the damage that has been done as a result of the price cut. Projections indicate that it will take many years for the industry to recover from the challenges of 2009.

Importantly, Minister Persaud highlighted the fact that the aforementioned funds that where sent by the EC to the Ministry of Finance came after Government and the management of the local industry struggled to maintain stability and order throughout the year. Further, these resources will not go directly to GuySuCo but to the ministry as budgetary support.

From an internal budgetary perspective, and financed by the nation’s treasury, it is the Government that has invested US$181 into the Skeldon Plant in Berbice and US$12M into the Enmore packaging plant.

Further investments in canals and drainage remain substantial, part of an overall plan to enhance existing standards in cultivation, production and diversification in the context of preparing new, value-added products for local, regional and international markets.

The Minister emphasised that had it not been for the government’s commitment in frontloading these resources, or had the Administration waited on the EC for funding, the industry would have ultimately collapsed and face terminal closure.

Specifically, Minister Persaud stated, “We must not underestimate the severity, disruption and hardship that have and will be caused on the industry, having lost $20B in earned revenue, especially a company that is already fragile.”

The Minister reiterated that the intention of his initial statement was to reinforce the fact that one cannot deny the severity of the impact of the cuts on the local industry, which is losing what would have been earned in the amount of $20B annually, substantially affecting the performance of the industry and contributing greatly to some of the financial and other difficulties that the industry currently finds itself in.

And so the Commission and its representative should not make comments that obscure the impact.

Empirical evidence provided show that the effect of the price cut has been and will continue to be severe because the provision of this funding is not continuous, has been flowing slowly, and has too many conditionalities attached.

The statistics indicated that the Commission cannot deny the fact that the price cut have had a debilitating effect on the industry, with losses in excess of US$1.4M ($72.4M, euros), with projected losses in 2010 of US$54.3M ($37.5M euros). Since the reduction, $21B went un-generated, with projections in 2010 of $10B. (GINA)