Three policies
For much of the period of the 2000s (and indeed for most of the presentation in this series of columns on sugar) attention has been chiefly directed towards the failure of the Skeldon Sugar Modernization Project (SSMP). This is to be expected, since by all accounts this project remains the main plank on which GuySuCo’s strategy rests for achieving its originally planned target of producing 450,000 tonnes of sugar annually. As readers are aware, the most critical component of this project is constructing a new factory at Skeldon. Although as I have indicated previously, the project is not simply confined to building a new factory at Skeldon, it is predicated on the view that factory capacity is the most binding constraint (or the main bottleneck) preventing the sugar industry from returning to sustainable profitability.
However, despite this, I am sure GuySuCo planners would be the first to concede there is no merit to expanding factory capacity (output or productivity) if there is an insufficiency of sugarcane grown for grinding and conversion into sugar. By parity of reasoning, the reverse also holds true. That is, it would be clearly pointless to increase the output of sugar cane beyond the efficient grinding capabilities of the available factory. This recognition leads to the inescapable realisation that, in order to raise overall industry efficiency (and thereby to reduce the unit cost of producing sugar), improvements need to be sought in tandem, for both cane supply and cane processing.
It is not generally recognised that this general strategy of GuySuCo has always been accompanied by what may be termed a ‘trio’ of supporting policies. The first of these derives from the consideration that because sugar production is anintegrated agricultural and factory operation, this places a very high premium on maintenance as a cornerstone of GuySuCo’s operations. This is required so as to ensure that all systems are working well all the time. Dedicated, consistent, and thorough maintenance of GuySuCo’s physical assets (land drainage, irrigation, and transportation networks); capital equipment (factories, agricultural machinery, storage, and vehicles); and its cane and sugar quality are essential.
The second accompanying GuySuCo policy has been the systematic pursuit, (as a matter of priority) of the privatisation (that is, the increased role of private stakeholders) in the operations of GuySuCo. This policy has held firm over the past three-and-a-half decades, both in the periods when GuySuCo was state-owned and state-operated and during the period of the foreign private management contract with Booker Tate. Indeed some readers may argue that the management contract itself was a move in the direction of privatisation!
The third accompanying GuySuCo policy has been directed at reducing reliance on an abundant supply of cheap wage labour in the sugar production process. It is obvious that the chief reason for this is that cheap wage labour (for a variety of reasons) is no longer assured.
For the remainder of this column I shall begin to discuss these accompanying (supportive) policies in the order in which they have been introduced above. As I do so, readers should acknowledge that “maintain, privatize and mechanize” are important GuySuCo rallying cries. Afterwards, I shall discuss sugar reform to wrap up this series of articles.
Policy 1: Maintenance
Let us begin by considering GuySuCo’s strategic approach to maintenance. Maintenance activities are, by their very nature, unspectacular. They are nevertheless essential to a relatively large corporation like GuySuCo, which combines both agricultural cultivation and commodity processing in a single continuous production value chain. I shall illustrate in what follows some of the conceptual areas of maintenance challenges that GuySuCo faces.
For example, proper maintenance at GuySuCo requires the continuous reliance on scientific land selection for sugar-cane cultivation. The requirement here is to ensure that land quality does not only meet acceptable standards, but that it is incrementally upgraded as the years go by. Thus GuySuCo has sought to increase the proportion of what are termed Class I and Class II lands in the mix of its cultivated lands, as a main goal for the Skeldon area. The incremental improvement in land quality is, therefore, also a fundamental drive for technological enhancement, which needs to be incorporated into the aims of maintenance activities.
Second, the same expectation would hold true in regard to planting methods, especially in the areas of fallowing, cropping period, and planting density; the last item has a direct bearing on the cost of weed control. Here maintenance can lay the basis for the rapid introduction of innovations from GuySuCo’s expenditure on R&D, laboratory work, and, field testing of equipment into production.
Third, maintenance of hydraulic operations at GuySuCo is central to good agricultural practice. Drainage, irrigation and water management systems have, at all times, to be in good working condition, if the company is not to be overwhelmed by adverse natural events. To take an example, the rehabilitation and maintenance of GuySuCo’s numerous canals are crucial to effective water management on its estates.
Fourth, good agricultural practice requires systematic chemical application, after paying due regard to its environmental effects. Chemical application is more often than not designed to support the propagation of high-yielding cane varieties in order to improve the sucrose content of the sugar, as well as to contain the propagation of pests and diseases.
While the above four examples are all confined to agricultural practices on the estates, factory maintenance and the upkeep of GuySuCo’s distribution equipment and vehicles also form part of its dedicated maintenance activities, which must be pursued, at all times, both in and out of crop.
Next week I shall conclude the discussion of the other two GuySuCo’s rallying cries: privatize and mechanize!
