SHAPING THE NEW ORDER IN GUYSUCO – FINANCIALLY

THERE is dire need for financial renewal in the sugar belt, if we are to maximise its economic contribution to the nation. The focus has to be on consolidating factories (Albion/Rose Hall, Wales/Uitvlugt) and keeping as many of them grinding with the least possible losses being incurred.Though some may want to deny it, the sugar belt is intertwined with the economic success of Guyana. If sugar gets the flu, Guyana will get economic anaemia.

Success in sugar has to be grounded in three realities: (1) How we can make the fields and factory more efficient; (2) How we can generate marketable products that can bring greater returns to the industry; and (3) How we can constructively improve the human relationship between the management and the line workers.

It is not an enigma; it is the core solution.

Well-maintained and managed fields, canals and factories are the core solutions. Failure to have these on all estates, along with full attention to minor details, is why GuySuCo is where it is today. If an adverse field or factory issue is identified, administrative managers must be empowered to cause swift resolution.

The opinion of those on the front line in the fields and in the factories must be catalogued, and if they make sense, then action must be taken on them! GuySuCco can survive only if a set of rigid standards are maintained in the field and factory, with a bottom-up approach. Today it is the norm to have “cell-phones”; field managers spend more time away from the field than they ought.

In Jock Campbell’s days, there was one Dr. Harry Evans, the Agricultural Director of Bookers Sugar Estates, who was tasked with the job of raising the agriculture standard using science. In my reading of a commentary from Jock Campbell in the book “Sweeting Bitter Sugar”, Evans was tasked specifically with examining the “physiology and pathology of the cane plant, and to raise the standard of cane husbandry”.

Who across the industry in GuySuCo has a helicopter view of this kind of knowledge? Which team across GuySuCo is logging the cane husbandry problems, taking action on those problems and facilitating solutions using mostly scientific interventions and common sense? I was advised there is no team in all of GuySuCo that can talk comprehensively in detail about the state of the field. This information resides in the head of a collection of numerous people, who have not been sharing notes and ideas. You ask any “cane-cutter” basic scientific questions in layman’s language, and he has a better answer than the cell-phone manager; but yet his basic knowledge is not being catalogued. This is where billions of dollars are being lost before the canes are even harvested.

Until this is fixed, poor yields will continue to engender skyrocketing operational costs and the industry will continue to be dead on arrival.

This situation at GuySuCo did not happen by magic; it took years of cutting corners on fundamental core practices, such as flood-fallowing (flooding and resting portions of the field) and proper cane husbandry practices to arrive at this destination. It is time to turn back the clock.

What is essential now is a comprehensive business-turnaround blueprint that pays detailed attention to the front end of the business. It is expected that one of the outputs from the Commission of Inquiry is a “Road Map for the period 2016-2030” as prescribed in their Terms of Reference. It is expected that that document will identify the solutions and the resources to fund the regenerative works in the fields, canals and factories. If not, we have just wasted G$67 million.

One recommendation I am looking forward to is how to divert wasted funds to more productive use. I recommend the establishment of a special Inspectorate Department to ensure that all non-value added activities and all acts of financial waste are identified across the organisation and slashed.

Secondly, cost recovery has to be imposed, especially when it comes to the maintenance of the drainage and irrigation system in the sugar belt. Most people ignore the fact that the coastal plain of Guyana is nothing but a bowl that easily enables flooding. If GuySuCo does not actively fund and maintain portions of this flood control system, the livelihoods of more than 40 percent of our people will be at grave risk during the rainy seasons. The economic impact of such floods is immeasurable, and if one reflects to 2005, it offers a glimpse of how important GuySuCo is to national life.

It was the Vienna Commission that highlighted the fact that “every square mile of cane cultivation involves the provision of 49 miles of drainage canals and 16 miles of high-level waterways.” In today’s dollars, maintaining these intricate systems of canals and drainage pumps will cost an estimated US$0.07 for each pound of sugar produced. Some of this cost has to be paid for by the Central Government, since all of it is not exclusively for the benefit of the sugar industry. Anything else is totally unfair to the industry.

There must be some cost recovery system to compensate the industry for services rendered to the nation.

In 2015, the Central Government is scheduled to spend just under G$11 billion on drainage and irrigation and sea defence works outside of the sugar belt.  So to claim that GuySuCo is in receipt of G$12 billion in 2015 is not an accurate assessment of the situation, since part of this is payment for services rendered to mitigate our nation’s natural hydrological defects. The nation has to bear that burden because, if GuySuCo is allowed to collapse, then the flood control burden will fall exclusively on central government.

We shall continue this sugar series by looking next week at measures to cut non-value added out of the factory. Please feel free to contact me at sasesin1@yahoo.com with feedback.