Guyana is expected to lose out on a reported 14 million euros ($3.8B) when the current round of European Union budgetary support for the sugar industry comes to an end.
Under the Accompanying Measures for the Sugar Protocol, the EU had provided a total grant of 94 million euros for the period 2007-2010. To date, 54 million euros have been disbursed to the government towards reforming the industry.
Ambassador of the European Commission to Guyana, Geert Heikens disclosed yesterday during a sit-down with media representatives that some 14 million euros of the total grant would go back to the Commission because this country failed to reach some of the commitments set.
Ambassador Heikens would not elaborate on what the commitments were, but he pointed out that the funding which had been set aside would have to be returned.
Of the sum to be returned, 6 million euros was lost in budgetary support during the period 2008-2009 after the late submission of a sugar action plan. The EU had reported there was a delay in the submission of the plan, but the government had insisted that the deadlines were met.
The EU will disburse 18 million euros to Guyana in budgetary support to assist the sugar industry for this year; a new round of funding is likely to be set for 2011-2013.
Over the years the EU grant has assisted the government in upgrading sugar factories across the industry, establishing a sugar packaging plant at Enmore, increasing total sugar production and mechanising field operations, to improve profitability.
Since the disbursements in 2007 there have been concerns regarding government’s past practice to tie sugar production to the funding, which meant that the money was released based on how the industry performed, and in recent years GuySuCo has been struggling to reach its annual production target. In addition, the new Skeldon factory has been plagued with defects and is operating below capacity level.
The funding came after the European Union decided that it would cut the price of sugar exported to EU member countries from the African, Caribbean and Pacific sugar producing countries by 36%. The price cuts took effect from July 2006 and were to be implemented over a four-year period. The Sugar Protocol under which Guyana sold a large amount of its sugar to Europe was also abrogated under the EU sugar market reforms.
