The government has committed to making a decision about the future of the sugar industry before the end of December as pressure mounts on it to take steps to preserve jobs on estates while at the same time reducing subventions to the heavily indebted and loss-making GuySuCo.
Minister of State Joseph Harmon told reporters on Thursday at the post-Cabinet press briefing that a cabinet sub-committee will be examining several options presented to them at Tuesday’s meeting by a team from the corporation.
The team, which was led by Chairman of the Board of Directors Dr Clive Thomas, presented to Cabinet on the state of the sugar industry as well as the available options for the future.
According to Harmon, these options ranged from maintaining the status quo at GuySuCo [doing nothing and allowing the corporation to go on as is] to a point of a limited form of diversification. He explained that GuySuCo’s position was that maintaining the status quo was the worst possible option as this would have serious implications for the National Treasury.
“It will require $18.6 billion in 2017 and $21.4 billion in 2018 just to maintain the status quo. This is in addition to the current debt in excess of $80 billion which GuySuCo has,” he said
Harmon stressed that after hours of consideration, it was clear that that some decisions would have to be made about GuySuCo before the end of December and therefore a sub-committee, including Minister of Agriculture Noel Holder, Minister of Finance Winston Jordan, Minister of Natural Resources, Raphael Trotman and himself, has been established.
This sub-committee will consider the information and craft Cabinet’s approach to the issue. It is expected to present its report within two weeks.
GuySuCo’s meeting with Cabinet on Tuesday came amid continuing poor production in the industry. With nearly a full year under the oversight of the APNU+AFC government, as of October 22, sugar production for the second crop was 70,574 tonnes, just over half of the revised target of 137,764 tonnes, with just about six weeks grinding left and signalling a likely significant fall in output compared to last year.
This is after a poor first crop output this year of 56,821 tonnes, which was roughly 23,000 tonnes down from its target of 80,270 tonnes. Annual production this year will fall far below last year’s output of 231,071 tonnes. The original target for 2016 was 239, 513 tonnes.
Since taking office in May last year, the government was faced with a severe financial crisis at GuySuCo, which required a subvention. There was a shake-up in management and a new board was named. The government then proceeded to set up a Commission of Inquiry (CoI) on the way forward for sugar. The CoI made no recommendation for the closure of any estate but this is what the government and GuySuCo did in January this year when they announced that there would be no more sugar cultivation at the Wales estate after the end of the year.
With hundreds of Wales workers faced with the loss of jobs at yearend, the government had committed to taking measures to preserve jobs at Wales through diversification. Thus far, the only initiative which has been announced is the growing of seed paddy on a section of the acreage but this has not been greeted with enthusiasm by the workers and their unions. GuySuCo has also not explained how workers will benefit from this. With November already underway, no other announcement of diversification has been made and this has deepened concerns among workers.
GuySuCo this year also announced a merger of the remnants of the LBI estate with Enmore, which portends more job losses and this has also led to protests by sugar workers.
Options
Though questioned extensively on Thursday on what exactly were the options being considered Minister Harmon refused to provide specifics, saying instead, “…it is not always good to go about saying these are the options because you will very well find sometime at the end of your deliberation that you come up with a conclusion that is not consistent with your earlier position… None of the options we have at this point are ruled out, because they came out of a process into GuySuCo. They came out of a Commission of Inquiry, they came out of a special team of persons looking into various aspects into the operations of GuySuCo… so we would like to give serious considerations to these recommendations.”
He also noted that “it is always important that we be careful in what we put out there in the public because any wrong step, because of the nature of the industry, because of the number of persons who are employed, any wrong statement can send the wrong signal and create panic and confusion, and so it is important that we be very careful and deliberate in how we deal with the information that has been presented to us, and that is why I would not venture to go beyond those statements that were made.”
Asked specifically if one of the options being considered was further closure of estates, Harmon stressed that he did not wish to present specifics.
Asked if the 2017 National Budget accounts for severance for GuySuCo’s workers, Harmon said that “all of these are the options; these are all options because if you are going close down anything you have to consider the workers and how you deal with them. Severance is always a matter you have to deal. We are still in early days where that is concerned. Severance is part of the law of this country and we embrace the law.”
He acknowledged that the International Monetary Fund (IMF) is concerned about bailouts to GuySuCo as it “would basically be skewing the whole economic plans and economic arrangements of the country when you put so much money into an industry where the people in the industry themselves are saying that this is not a viable option if you do not change certain things in GuySuCo.”
“We cannot continue to pour this type of money into an industry at the expense of the other developments which have to take place in the country such as developments in education, development in health, development in security and all of these things that relate to the happiness and good life of the people of this country,” he added.
The corporation’s presentation to Cabinet on Tuesday is one part of a five-point approach developed by Cabinet, following the submission of the report by the CoI last year.
The points required GuySuCo to present to Cabinet a plan addressing the issues raised by the COI after which Cabinet would give consideration to that plan and then having considered the plan that Cabinet would engage the opposition and the National Assembly and other stakeholders, including the sugar workers and their families, in developing a final position.
