Dear Editor,
It would be interesting to learn whether the Economic Services Committee had expected to receive a dissertation on the future of the sugar industry and the prospects for the Skeldon Project from the Minister of Agriculture, when it invited GuySuco to appear.
The conventional understanding is that the governance of GuySuco is entrusted to a board of directors headed by a chairman, who is expected to bear the responsibility of effectively representing the corporation at the highest level.
The board includes the chief executive whose senior management team in turn includes a core group of overseas experts. The outsider must wonder at what stage does the minister becomes a bona fide member of the GuySuco management structure.
The Minister of Agricul-ture is, however, known for the self-confidence he exud-es. Whether his imposition on the decision-making process imbues the same level of self-confidence in the micro-managed executive team is another matter.
The exhibition of confidence in expressing what one believes, neither makes that opinion a fact, nor the submission automatically credible to the audience, particularly of those who have a better and longer institutional memory of the sugar industry. For example, if the Minister perhaps has taken as his cue the year 1999 when sugar production was 321,438 tonnes, at cost per tonne of USc 17.63 per lb, he would have been able to place the industry’s current performance and prospects in a less effusive perspective.
Next, an international consulting firm retained by GuySuco reported in 2002 that employment costs had escalated from 41% of total costs in 1992 to 54% of total costs in 2001 – a period during which the number of workers decreased by approximately 9000.
Dated as these figures may appear to be, it still has relevance to the Minister’s projection regarding the replacement of manual labour by mechanisation. One would expect that the cost effectiveness of this replacement policy has been carefully computed and shown to be to the industry’s advantage, after allowing for the cost of terminal payments.
In a study conducted in 2002, the invited consultants made the following cautious observation on the impact of mechanisation on cane quality.
“Gains in cane quality could be made more difficult with the increased use of machinery for the harvesting and transport operations. Experience from other sugar industries indicates that a switch from hand loading to the mechanical loading of sugarcane often increases the level of extraneous matter in the delivered cane supply. Furthermore, a switch from hand harvesting to mechanical harvesting often has the same outcome. Normally, over time, industries improve their methods of machinery operation to improve the quality of cane. However, this often requires a financial incentive. The most likely incentive is through the cane payment system where higher cane quality is rewarded through a higher payment and lower cane quality is penalized by a lower cane payment. However, to make an incentive program truly effective, the facility must also operate at maximum efficiency.”
Meanwhile, it is expected too that the implementation of the displacement of workers would have the necessary support from the relevant worker representation.
It is clearly understood that current and prospective cane farmers will have to invest in mechanization of a range operations about which Skel-don Estate management themselves must develop the relevant expertise before passing on the knowledge to these cane farmers.
Presumably, a transitional learning period has been carefully worked out.
In this regard the consultants referred to above also expressed the following reservation:
“While the requirement that private growers finance their own land and crop development is understood, and is accepted by each of the prospective private growers at Skeldon, a ‘hands off’ approach by GUYSUCO is unlikely to be sufficient from both a grower viewpoint and from the perspective of the wider success of the Skeldon project. With private cane growers projected to supply 30% of the total cane supply at Skeldon, the participation of the new private growers is crucial for the success of the Skeldon project. It is therefore essential that each of the identified private growers participate, not only in terms of producing the required amount of cane, but also in terms of meeting the timing requirement of the Skeldon project. Although private growers are not scheduled to supply cane in the first crop (to avoid any teething problems associated with factory start-up), any slippage by the private growers would have a major adverse impact on the financial success of the project.”
Additionally, whether by choice or by default, other important human resource issues do not appear to have been given the priority attention they deserve. It is not certain what was the last year that Guysuco’s Annual Report was tabled in the National Assembly, or indeed seen by the Public Accounts Committee; but the following brief extracts may perhaps be indicative of concerns which still need to be addressed:
Labour Costs
1999 Annual Report:
“Labour costs now represent 57% of our total cost base.”
2000 Annual Report
“Labour cost continue to represent between 55 and 60 per cent of total costs.”
Departures
2001 Annual Report
“27 managers left.”
2002 Annual Report
“35 Senior Staff and 15 middle level staff resigned.”
While subsequent annual reports may have omitted to mention these departures, information is that its incidence has not declined appreciably, if at all.
Among others, the management experience lost could only be replaced by related but inexperienced skills, neither of which category is said to be represented by any Guyanese at the Skeldon Project.
Equally troubling, if not more so, was the CEO’s announcement only a year or so ago, that GuySuco was examining the revision of curricula for training programmes at the Port Mourant Apprentice Training Centre, bearing in mind the new technologies installed at the new Skeldon Factory. Presumably this examination has since been completed, resulting in a reduction of the normal apprenticeship from four years to two, that is if the new technologists were to be ready for the factory start-up in 2008. Presumably also, curricula are being prepared to ensure the availability of adequate skills in the various areas of mechanisation.
However, it must be most disquieting for GuySuco’s management to be faced with the perpetual drop in apprentice intake into an institution designed to accommodate 100 students annually. A few weeks ago there was a clear demonstration of innocence shown in the proud announcement that 38 apprentices had graduated.
A review of the spectrum: high outflows of competencies and low intake of potential skills, must leave the senior management of the sugar industry to ponder how attractive an employer Guysuco still is.
One would normally expect to find much more in the mortar than just a pestle of optimism.
Yours faithfully,
E.B. John
