EVERY Guyanese know that the sugar industry is in trouble and that we had to do something about it was inevitable.

The Caribbean inherited sugar from colonialism; sugar was central to slavery and colonialism. Many Guyanese families were directly and indirectly affected by sugar—‘King Sugar’. Since Independence, we have continued to produce sugar in abundance, but we have never been able to determine its future or its price on the global market.

In the meantime, the demand for sugar declined, as new sweeteners emerged and other more economically well-off countries found ways to produce the product at much cheaper prices than we did. In short, we simply couldn’t compete anymore; yet our economy depended a lot on sugar, both as a form of revenue and, critically, as a source of employment for thousands. Increasingly, the Government found itself subsidising the industry.

In a relatively poor economy, this invariably had consequences for the country’s overall economic fortunes. Some experts called for diversification away from sugar, while others touted diversification around sugar. The previous Government invested in modernisation in the form of the US$200 million Skeldon Estate, but that did not solve the problem, as the industry continued to falter. Another important factor for the industry is the linkage between sugar and politics. Given the ethnically polarised manner in which our economy evolved, the majority of the workforce came from one ethnic group. It meant, therefore, that any decision on what to do with the industry had to take into consideration that politically explosive element.

One major party committed itself to maintaining the status quo at all costs, given the fact that its base is located there, while the other major force had to tip-toe around the problem for fear of being charged with disempowering the base of its rival. We seemed trapped. Upon assuming office in 2015, the condition of the sugar industry was one of the first crises the current Government had to confront. It found the industry bankrupt; there was not enough money to pay salaries. Government responded with the famous bail-out to ensure that workers were not adversely affected, but it also named a new board and set up a Commission of Inquiry. It was clear that the Government intended to tackle the problem head-on.

The sugar union–GAWU–meanwhile, unsuccessfully sought to mobilise the workers to confront the Government, which it claimed was not honouring its traditional practice of negotiating a new wage package. The latter had said it was awaiting the report of the CoI. After some speculation, the Government made its first move by announcing the closure of Wales Estate. It had been known that that estate was the most vulnerable. It was operating at a tremendous loss. According to the Government, at the time, the estate was working at 50 percent of its capacity, and was slated to lose between 1.6 and 1.9 billion dollars in 2016. Clearly, if one is moving in the direction of rehabilitation, then it made sense starting with the weakest link.

Then in May last year, the administration unveiled its much vaunted State Paper on Sugar, declaring in it that the future of the industry here lies in a smaller sector, with reduced losses and cash deficits, but coupled with a separate and profitable diversified enterprise. Agriculture Minister Noel Holder made it clear then that government’s intention was to focus on the poorly-performing estates and have them shift from sugar to diversification.

He then announced that “The proposed courses of action are to amalgamate [merge] Wales Estate with Uitvlugt Estate and reassign its cane to the Uitvlugt factory, since the estate is operating at 50 percent capacity. Sixty percent of its drainage and irrigation infrastructure is in a dilapidated condition. The corporation furthermore seeks to divest itself of the Skeldon Estate. The estates of Albion and Rose Hall are to be amalgamated and the factory at Rose Hall is to be closed.” Holder said GuySuCo would then consist of three estates and three sugar factories. The estates would be Blairmont on the West Bank of Berbice, Albion-Rose Hall in East Berbice and the Uitvlugt-Wales estate in West Demerara.

The three estates will be complete with factories and will have cane supplied from all five locations.
True to its plan of reforming the industry, the workers were given their redundancy letters at the end of last year and government is now making a move to pay them their severance package, albeit 50% in the first instance and the other half by June. Meantime, the opposition and GAWU, determined to confront the administration, are now challenging the legality of the severance.

It is no secret that it will cost the administration–not GuySuCo–roughly $5B to pay severance to the 4000 workers. Finance Minister, Winston Jordan, has assured that they would have to find the money and even announced that ministries’ budgets would be slashed to facilitate this. Such measures could not be ignored. We have said here before that Government had to make its case directly to the workers and that it would also have to find a way to ensure that the affected workers continue to earn a livelihood.

We are therefore pleased that President David Granger in his message recommitted his government to protecting the welfare of sugar workers and their families and also announcing that $100M have been earmarked to provide small loans for entrepreneurial activities which could open opportunities for employment after leaving the sugar industry.
He also assured: “The Guyana Sugar Corporation is not being dismantled.

It is working actively to ameliorate the impact of retrenchment on workers livelihood. It has established an Alternative Livelihood Programme (ALP), aimed at providing support by enabling displaced employees to access available opportunities to function in other fields; embarked on the training of employees to work in new operational fields across the industry in places such as the field workshop and providing services; engaged 500 employees from the West and East Demerara Estates, with over 100 of them signaling their willingness to be retrained in fields such as carpentry, masonry, plumbing, mechanical and electrical works and in small business enterprises.”

Change is always difficult, especially in the context of a well-entrenched aspect of the political economy; but it’s time that Guyana confronts the problem. Many of our sister CARICOM countries have already bitten the bullet and freed themselves from the shackles of sugar; it is now our turn to do likewise. Good sense has to prevail, we cannot be blinded by the need for political advantage. This is a national situation that demands a national response that, in the end, can only benefit all of Guyana. If we fix sugar, we could go a long way towards fixing our historically vulnerable economic reality.