Prime Minister Moses Nagamootoo said on Thursday that government is ready to transform the sugar industry but said consensus is needed on the new direction.
In his address on the occasion of the 68th anniversary of the Enmore Martyrs at the monument site at Enmore, Nagamootoo said that the transformation would be in the form of diversifying plantation lands and opening up new opportunities for wealth creation and sustainable livelihoods in the sugar belt.
He said too that the new board at GuySuCo must intensify consultations with workers and related organisations. The government has come under intense scrutiny over its plans for the industry since its surprise announcement in January that sugar will no longer be cultivated at the Wales estate. This was followed up in April by an announcement that the remainder of the LBI estate would cease operations. These are cost saving measures and will result in job losses.
According to Nagamootoo, “Since the mid-1980s, the plan was to diversify production. There were plans for other crops, for aquaculture or fish farms, for dairy industry. Apart from diversification, the option for privatization was also on the table.”
He said there is need to shift to value added products and for more production of refined and packaged sugar and that GuySuCo must diversify to include aquaculture, cultivation of legumes, fruit crops, citrus, dairy and livestock farming.
He said that “after nationalization, Booker Tate Ltd was brought back to prepare the sugar industry for privatisation. Either way; diversification or privatization, employment levels in the sugar industry would be affected.”
According to him, “We must divest our estates of lands that are no longer profitable for sugar, and include peasant cane-farmers and agro-processors in the production chain. Lands can be given to workers who grow and supply GuySuCo with vegetables, fruits and milk. GuySuCo must provide packaging and handling facilities, and marketing.”
He asserted that no one wanted to “put any sugar worker out of job. We face a crucial crossroad: we will be damned if we don’t do anything; and damned if we do something. But doing nothing would spell disaster.”
The PM said that the Commission of Inquiry report on GuySuCo, which is now before the Economic Services Committee of the National Assembly, has warned that if steps are not taken soon, sugar will not only perish but it would take the entire economy down with it.
Nagamootoo said that 21 years ago, in 1996, the National Development Strategy (NDS) had warned that the costs of keeping employment in the sugar industry was going to bring the industry down.
In order to survive, he said, GuySuCo existed on credit and borrowing and that the sugar debt rose from $55.3 Billion in 2006 to $91 billion in 1991. In 2014, it was $118 billion.
This resulted in several strategic reviews and the proposal of turn-around plans. The strategic reviews between 1994 and 2004, promoted modernisation of the industry and the construction of a new factory at Skeldon.
He pointed out that former President, Dr. Bharrat Jagdeo, had said that sugar was dead without the new Skeldon sugar factory and some $50B was pumped into that factory, which is “limping along and cannot stop the paralysis that has hit the sugar industry.”
The sugar industry, Nagamootoo said, has been put on “life-support” and every year since 2011, parliament has been voting huge sums as bailout package. About $60 B from the National Treasury has been diverted to pay wages to GuySuCo workers.”
He said too, “Last year and this year, our coalition government has voted $21 B to bail the industry out. Today, we are spending billions and billions of dollars to keep a similar system in place, to keep thousands of our working people trapped in back-breaking routines.”
He added that the best factories must be invested in and modernised to produce at less costs and to make ethanol and more molasses for the alcohol industry.
Meantime, he said that this year, there are plans to merge the LBI factory operations with Enmore, and the Wales factory operations with Uivtlugt, reducing the number of factories to seven.
When the announcement of the planned closure of the Wales factory was made via a press release in January, no mention was made of merging it with the Uitvlugt estate.
GuySuCo has explained that the cost of producing sugar has risen because both the Wales and Enmore factories were grinding at half capacity.
“We have learned that the cost of production of sugar on the Demerara estates rose from 30 cents US per pound (G$60.00) before 2011 to 41 US cents. In 2013, it jumped to US54 cents (G$108.00) per pound while Guyana was selling sugar at US 16 cents (G$32.00) per pound on the world market. The sugar industry has been making tremendous losses as a business. To survive, it cannot rely on sugar alone”, the Prime Minister declared.
