The bulk of the 5.6 million euros Guyana received last year to cushion the 5% cut in the price of sugar on the European market went towards upgrading the Guyana Sugar Corporation (Guysuco) packaging plant.
Sixty per cent of the funds would have gone to the sugar industry and in this case directly to Guysuco; 20% towards diversification of the sugar sector and 20% towards cushioning the social impact that the slash in the price of sugar would have had on the social sector.
Minister of Foreign Trade and International Cooperation Dr Henry Jeffrey, told this newspaper in a recent interview that it is expected that Guyana would get even more money this year to mitigate the effects of the price cut.
Last year Guyana received 12% of the 40 million euros the EU granted to the African, Caribbean and Pacific (ACP) group of countries as accompanying measures, and Jeffrey said that this year, the EU is expected to provide some 184 million euros to the sugar protocol countries. Guyana would likely receive 10% or 12% of this sum based on its current sugar modernisation plan.
The EU has earmarked 1.3 billion euros for the ACP countries as accompanying measures to transform their sugar industries through modernization, diversification and to mitigate negative social impacts.
Jeffrey said while there was a debate about how much money should be released to the ACP sugar producing countries annually, it was not so much a matter of frontloading funds on a year-to-year basis but a matter of the funds being available to the countries that need it at any point in time to move their restructuring programmes forward.
He contended that if the EU said it had 1.3 billion euros for the ACP countries, “you should be giving this up front.” Guyana’s sugar modernisation plant to improve production and upgrade products and which includes diversification of the industry, he noted, required funding in the region of US$700 million.
The 36% price cut over a four-year period, which took effect from July 1, 2006 will see another 5% cut for the 2007/2008 period; a 14% cut for the 2008/2009 period; and the final cut of 12% in the 2009/2010 period.
The price cut is an attempt by the European Union to bring the prices within the range of the price on the world market.
Though he could not say what impact the 5% price cut has had on the local sugar industry this year, Jeffrey said it was obvious that any price reduction would have an impact on budgeting. (Miranda La Rose)
