EVERY Sugar estate in Guyana is currently operating at a loss, which translates to each having to be heavily subsidised by government in an attempt to preserve direct employment for the 16,000 workers who rely on the sector for their livelihoods.Chairman of the Guyana Sugar Corporation (GuySuCo) Commission of Inquiry (CoI), Mr Vibert Parvatan, made this disclosure at a press conference held in the Ministry of Agriculture’s boardroom, yesterday.
Parvatan, who is spearheading an examination of the sugar industry to formulate recommendations for its survival, said the historical realisation of 300,000 tonnes of sugar is currently unachievable, since there are major challenges in achieving 220,000 tonnes.

To exacerbate this challenge of declining production, the unit cost of production continues to climb, the Chairman added.

“When the sub-committee presented its quote to us, world market price was recorded at 13 cents per pound; and in the same vein, GuySuCo’s cost of production is 45 cents per pound. This is more than 3 times the market price of production,” Parvatan said.

It was noted that Government was forced to pump over $17B into the industry last year, to facilitate the operational cost which had exceeded the revenue generated from sugar production.

Parvatan further explained that the historical position of the European markets, which gave Guyana preferential prices, was a “bonanza” in the years gone by. This bonanza, he said, accommodated some levels of inefficiency.

In fact, he disclosed that, presently, the prices have been gravitating towards the world market prices which puts Guyana in a difficult situation.

Additionally, Parvatan offered that “while subsidies are not new to sugar industries, the administration -– the government of the day — conscious of its sympathy and support for the industry, should acknowledge that they have their own limits in terms of funding.”

He further suggested that GuySuCo should not be seen only as a business; and if this was the case, then there would have been an obvious solution to the issues plaguing the industry.

He opined that the sector affects the social, economic and cultural life of those who depend on it for survival.
“If GuySuCo was seen as just a business, there would have been a very simple, obvious solution…. But, to the government, GuySuCo is more than just a business…. It is complex, it is complicated, but not insurmountable,” he told reporters yesterday.

As it relates to the CoI, which is in its preliminary stages, Parvatan revealed that 54 copies of previous studies on the sector done internally and externally were received from the Ministry of Agriculture.

In addition, the commission was privileged to have contributions from experienced economists, leaders in the business community, the head of the Demerara Distillers Limited (DDL), the head of KJ, Chairman of the Private Sector Commission (PSC), and many others who were eager to ventilate their views after recognising the significance of this assignment.

“The sub-committee’s report came in this week in the form of a draft. Throughout this week, we reviewed the first draft. So that process is ongoing and will continue next week,” he added.

These drafts will then be placed before the entire body of the commission, a presentation will be made, and commissioners will interject with questions, make comments, disagree, support, and advocate.

He explained that the commission has also received several recommendations from persons who appeared before the commissioners, but some of these are impracticable. Quizzed on what some of these recommendations were, the chairman refused to divulge. He offered, rather, that reporters should await the final report, which will be submitted to the Minister on October 17.

By Ravin Singh