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Sugar trouble
During the past week, workers on four of the eight sugar estates in the country went on strike, forcing management to halt operations on those locations.
As one of their representatives has pointed out, the shutdown has come at a most inopportune time — when Guysuco is scrambling to fulfil its contractual obligations to the EU market.
Even though the special price that had characterised this market is in the process of being dramatically reduced after the unilateral abrogation of the Cotonou Agreement by the EU, it still remains very much higher than the world market price — or that of Caricom, which is the next largest destination for our sugar.
The reason for the strike, in the words of the workers, is the miserly offer of a four and a half percent wage increase by Guysuco during the ongoing negotiations between the workers’ union, GAWU, and Guysuco’s management.
The union initially demanded fifteen percent, but brought that down, after eight meetings, to fourteen and three-quarters percent.
One would have to agree that the two sides are quite a ways apart. As we pointed out, however, in our editorial on Enmore Martyrs Day, “…it is incumbent on the rest of the country not to forget the continuing plight of the sugar workers.
Their lot, while not as dire as in 1948, is still a grim and brutal one. To deal with the plummeting market for sugar, occasioned by the unilateral breach of the Sugar Protocol by the EU, the wages and working conditions of the workers have come under severe pressure, so as to lower production costs… Most of the hard-fought gains earned in 1948 and after have been eroded.”
The strike over wages actually goes very much deeper than the present wage demands, and is actually a comment on the whole strategy on sugar adopted by Guysuco, and by extension the Government, which owns the corporation.
Articulated since 1998, the strategy envisaged the increase of sugar production by some one hundred thousand tons, bringing the theoretical output of the industry to some four hundred and fifty thousand tons annually.
The jewel of the crown in the new dispensation was to be the massive expansion of cane cultivation in the Skeldon area with the concurrent construction of a new sugar factory.
However, the plan was beset by some internal contradictions – notably the Demerara estates, which had a much higher unit cost of production than the Berbice operations.
The goal of producing sugar at ten to twelve US cents per pound overall was always going to be problematical if the one hundred thousand tons produced by the Demerara estates could only be done at some twenty cents per pound.
One further complication was that, to secure World Bank funding, the Government had agreed not to invest in new machinery for the Demerara factories, while cutting labour costs to the tune of five percent annually. Something had to give – and it has: the workers.
A Guysuco spokesperson is now threatening that unless the East Demerara sugar workers return to their jobs, closure of the factory at LBI may be on the cards. Cynics may say that it was always on the cards – and so will be either Wales or Uitvlugt on the West Coast of Demerara.
The logic of the Government’s agreement with the World Bank in 2001 leads inexorably to this conclusion. And even the consequent economies of scale gained by those closures may not save the resultant entities.
While reeling from the devastating cut of the special EU price, the Government has also proposed that it was envisaging a further expansion of sugar cane that could be converted into ethanol rather than sugar.
But as our columnist Peeping Tom has recently pointed out, if we cannot meet the labour demands of the present acreage under sugar, how are we going to deal with a doubling of that acreage – unless all the expansion is in Berbice, where mechanisation is more feasible than in Demerara.
But that returns us to the wage demands of the striking workers, and to note that their action is not confined to the Demerara estates. Berbice also has severe labour problems. We can only say at this time that the road ahead for sugar appears to be very rocky.
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