Introduction
Historically the sugar industry developed in Guyana because of its favourable agro-climatic coastal features. While sugar cane is one of the hardiest commercial crops, because of Guyana’s low-lying coast its successful cultivation requires a complex network of canals, drains and other waterways, supported by widely distributed sluices and mechanical pumps.
Cultivation Challenges
Presently, several cultivation challenges face Guysuco, including 1) the need for a more science-based land selection 2) improved planting methods (better fallowing, ratooning, weed and pest control, as well as plant material distribution and density) 3) effective water management practices 4) more science-based chemical applications in order to enhance sucrose quality and contain pests; and, 5) wider use of mechanized cane growing and harvesting.
These challenges are basic and have been duly recognized in Guysuco’s Strategic Plan 2013-17; where a number of targets have been set to overcome them. These include a tillage and replanting target of 20 percent per year; the targeted elimination of all old ratoons (cane older than five years plus); and, targeted flood and legume fallowing.
Generally, the two primary planks have been devised by Guysuco for combating these agricultural challenges. These are: the development of a cadre of private independent cane farmers and greater use of machinery in cultivation and harvesting. However, although recognized as the primary planks, Guysuco has been half-heartedly pursuing these in recent years.
Thus for example, the 2013-17 Plan has targeted increasing the hectares of private cane cultivation from 11 percent of the total in 2012 (5,387 hectares) to 16.41 percent (8,876 hectares) by 2017. The Plan also targets 10,000 hectares of cane land prepared for mechanization by 2017. Indeed the original Plan had targeted 40 percent of Guysuco’s cane cultivation to be mechanized by 2011; and, the remainder to be semi-mechanized by the end of this year! Alas, at the end of 2012 only about one-quarter of the cultivated cane land had been configured to facilitate mechanization.
Labour Supply Challenges
Guysuco has over the years aimed at “becoming and remaining the premier employer or employer-of-choice in Guyana”. To achieve this, it implemented a human resource strategy that monitors its wage and salary levels, benefit packages, and general working conditions, so as to ensure those remain, if not above, among the best provided in Guyana. This target was later refined and restated as keeping its remuneration levels in the “upper quartile of the labour market” (see SN, October 28, 2012).
In the article cited above I had estimated that, at the minimum, Guysuco had increased its wage rate under the PPP/C Administration between 1992 and 2012, by about ten-fold. However, as the pressure of losses developed in later years, Guysuco could no longer “afford” to fulfill its Mission Statement. This reduced the attractiveness of working for the Corporation. Labour shortages (and more importantly unplanned labour shortages) have become constant challenges to Guysuco’s lofty goal of being the “employer-of-choice”.
Furthermore, these unplanned labour shortages when combined with aged factories (and their unscheduled break-downs); poor and variable cane quality; add to the number of intermittent “stop-go” incidents in the sugar production process, and therefore unit costs of production.
In the current Guysuco Strategic Plan (2013-2017) the effort to mechanize cane cultivation and harvesting is targeted at particular estate locations, principally Skeldon, Uitvlugt, Enmore, LBI and to a lesser extent Rose Hall. On the whole, while Guysuco’s management-trade union relations are tense, these have not broken down entirely, even though a pattern of regular conflict has emerged.
Labour and the Turnaround Plan 2009-2013
Of note, in Guysuco’s Turnaround Plan of 2009-2013 (which preceded the current Strategic Plan 2013-2017) the corporation had targeted a reduction of its labour force by about 10 percent per annum up to 2015. This together with the transfer of traditional payments of non-wage benefits from the corporation to the state (for example, health and community services) was expected to contribute significantly to the lowering of the overall unit cost of producing sugar.
What readers should bear in mind is that if labour productivity had trended upwards in the 2000s and 2010s, Guysuco would have been better placed to “afford” improv-ed wages and working conditions. Inefficiencies in Guysuco’s operations have not allowed rising worker productivity to become a significant contributor to cost reduction for its operations.
Strategic Perspective
It is important for readers to properly appreciate Guysuco’s strategic perspective for addressing the predicament it has been facing since the 2000s. Its focus on the SSMP is based on the conviction that, since the 1990s, factory capacity has been the most binding constraint on its operations.
Arising from this, its ability to raise overall industry efficiency has been interpreted as a “trio of requirements” by the company.
These requirements are: firstly, since sugar production is an integrated set of agricultural and processing operations, its efficiency is based on the combination of physical assets in agriculture (D&I; transport networks; such as canals, dams, roads) capital equipment (factories, agricultural machinery, storage, vehicles etc) and the quality of cane produced and used as input for sugar processing.
Operationally, all three of these require that high priority is given to maintenance (readiness).
Secondly, Guysuco, although a state entity, recognizes that private efficiency could be significantly superior to state efficiency in certain operational areas.
Indeed, going back to the time of Booker Tate’s management contract, private control of as much of the industry operations as possible in the context of state ownership has also been a recognized priority. Therefore, in going forward, Guysuco has always supported privatization as far as practicable.
Finally, Guysuco has also long recognized that reducing its heavy operational dependence on an abundant supply of cheap labour was imperative. This abundance could not be relied on indefinitely.
The “trio of requirements” indicated above are well summed up in Guysuco’s rallying cry: “Maintain-Privatize-Mechanize”.
This column provides a useful entry point for the final topic in this series on sugar; that is, the way forward for the industry, which I shall commence next week.
