A $4B allocation for GuySuCo in this year’s budget will go towards the operational expenses of the entity and a national action committee has been set up to monitor the ailing sugar industry.
Minister of Agriculture Dr Leslie Ramsammy, while being grilled by members of the Committee of Supply during the consideration of the estimates of expenditure for 2012, said yesterday that the corporation has forecast a deficit this year. He said that a national action committee, which was set up through the Finance Ministry and which will be overseen by Cabinet, will be monitoring the industry and its operations. He did not identify the members of this committee. A new board also has to be sworn in.
As regards the $4B figure, Ramsammy stated that, “it is not earmarked for a specific expenditure but will be part of the pool of resources of GuySuCo to meet its operational expenses.” While being quizzed by APNU MP Volda Lawrence, he said that the government has signalled its intention of supporting the corporation in the face of the projected deficit.
Lawrence, while acknowledging that Ramsammy was new to the ministry, asked whether GuySuCo had carried out any form or research prior to the price cuts for sugar from the ACP countries.
Ramsammy stated that there was little notice from Europe on the price cuts and, according to him, nothing could have been done regarding the value of the Euro relative to the US dollar. He said, however, that this year negotiations have resulted in the Europeans paying in US dollars.
Shadow Finance Minister and APNU MP Carl Greenidge expressed surprise at Ramsammy’s statements regarding the sugar price cuts being given on short notice.
He said that even before the agreements were signed between Caricom and Europe, in 2000 the Europeans indicated that arrangements for the sale of sugar would change “and studies were done at that time in which Guyana was singled out as being probably the only viable sugar producer in the region based on anticipated falls in the sugar price”.
He added, “So I don’t think that is accurate to say that the sugar price decrease whether the 36% you are talking about or another, would have been the issue.”
Ramsammy said that even though he is new to the ministry, that in the year 2000 he was aware of the intention of the Europeans. He said that in that year, there was no indication of the extent of the cut in prices. ”In fact, the 36% cut was far more abrupt than anybody thought… it was going to be phased in and Guyana did not have the long phased-in period that was signalled at the time.”
Greenidge noted that as the ACP representative at the time involved in the negotiations with Europe, together with Sir Shridath Ramphal and others, he was aware that studies were funded by the ACP and Guyana was well aware of the changes that were imminent. He said the Agriculture Minister “might wish to put his point a little less strongly, I beg to differ as to the shortness of the notice.”
The sugar industry has been plagued by problems in recent years and the government has spent major sums to improve production. However, industrial action, poor worker turnout and a low output of canes have created headaches for the management of the corporation.
Recently, GuySuCo announced that the US$200M Skeldon Sugar factory is set to undergo major rehabilitation works in the coming months in order to have the facility fully operational. This includes the redesigning and re-engineering of several aspects of the troubled facility.
GuySuCo is working with a South African firm, Bosch Group of companies to remedy the major bottlenecks at the facility which have been identified and which will be attended to during the out of crop season.
