Sugar on the line: Again

Nov 30, 2008 Features / Columnists, Ravi Dev

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The announcement by the Arbitration panel on sugar wages that the “increase” will merely match the projected inflation rate for 2008 raises once again the question of the management of the largest industry in the country. This linkage was made quite explicit when one of the arbitrators conceded that the poor health of the corporation was the major factor that determined the miserly pay increment. This “poor health” is the result of a confluence of several structural challenges and some local irruptions.
GuySuCo is owned by the people of Guyana, whose interests are putatively represented by a Board of Directors that is appointed by the Government of Guyana. Since 1990, the actual running of the industry was placed in the hands of the British consulting firm, Booker Tate (since acquired by a South African sugar firm), which is paid several hundreds of millions annually for the services of a handful (literally) of men. Because of conditionalities attached to support provided to the Government, the World Bank is also a major player. It has not only exercised ultimate veto powers over the macro policies guiding the corporation but has established parameters that go to the heart of the present wage imbroglio. These, then, are the bodies responsible for the Guyana sugar industry and it is to them that we must look for answers for its “poor health” – not to the ordinary sugar workers.
To its credit, the Board rejected the plan foisted on the previous administration to privatise the industry, and in 1998 accepted a Strategic Plan for the industry, premised on its expansion and on the preferential markets in Europe being sacrosanct. This is not the time to open old sores, but the Board was badly advised as late as 2004 on the latter issue when in fact there were signals to the contrary since early in the millennium when Europe floated its “Everything But Arms” (EBA) initiative to the Lesser Developed Countries (LDCs).
Back in 1999, we critiqued the Strategic Plan from the standpoint of the survival of the Demerara Plantations. The World Bank had grudgingly accepted the plan not to privatise the industry but had taken a hard line on the closure of the latter plantations because they were seen as drags on the overall profitability of the industry. Compared to the Berbice plantations, the Demerara ones have less suitable soils, more rainfall (not good for ripening and harvesting – esp. mechanically), greater competition for its labour force and limited scope for increasing efficiencies of scale. Yet they had matched the Berbice operations in efficiency during the 1950s under Bookers’ watch.
Faced with the Government’s firm stand against any closure, the Bank conceded that if the Demerara Plantations were returned to profitability they could continue to exist. However, the conditionalities that they imposed, and to which the government agreed, made us question the fate of the Demerara Plantations. There were going to be no significant spending on the factories. An Agricultural Improvement Program (AIP) was unveiled to lower the cost of production in the fields but, at the same time, labour had to be reduced by three percent annually and wage “increases” had to be capped at five percent annually.
The old high Demerara production had been the result of labour intensive practices in field husbandry – applying fertilizers directly to roots, weeding, banking of trash, forking for aeration of roots, etc. Our contention was that if gains were not going to come through significant mechanisation, how would it arrive by alienating the workforce through placing all the responsibility on its shoulders while squeezing them financially? It was hard not to believe that the Bank was merely conducting a holding operation on the Demerara Plantations, until the new Skeldon Factory became operational
A major problem was the intensification of an age-old conundrum in the sugar industry under the Booker Tate management team: the problem of absentee ownership. The GuySuCo Board is not a hands-on one which meets very frequently to monitor the performance of the corporation. The remuneration of most members, apart from the Chairman, is not significant. Booker Tate is therefore accorded an inordinate leeway, but even though they draw an extraordinary remuneration, they are never in the factory or the fields, where the action takes place. The role of the local managers of the plantations is consequently critical.
Booker Tate, however, replicated to the highest degree the old colonial relations on the plantations – social as well as economic. The ordinary workers who actually produce the sugar have not been facilitated to see themselves as part and parcel of the industry: they are still the drudges. These workers are exhorted to sacrifice for the survival of the industry, yet when they compare their lot to that of the management, only cynicism is engendered. While it is expected that managers ought to be paid competitively, workers question why the fringe benefits accorded to managers, such as housing, electricity, water, car, gas, servants, transportation for schoolchildren, etc, are not mentioned. Corruption is rampant on the plantations, not the least being padding of payrolls for non-existent workers. Workers joke about not seeing field managers or the six or so layers of managers below them, ever in the fields. Central and marketing costs are allocated to each plantation – and these amount to one-third of the employment costs that some are upset about – but not much seems to be done to bring them down.
The Minister of Agriculture has thrown out Booker Tate from Skeldon, announced the imminent search for a new management team, and ordered an inquiry into the observed decline in the production of those plantations – but the World Bank is still around. As an editorial of this newspaper observed, this is not the time for us to score political points on the travails of the sugar industry. The financial meltdown in the developed world will place additional burdens on our fragile economy and we all need to focus on how best we can weather out the storm. Let us all work to save what is still the most important industry in Guyana; sugar is on the line.
(To be continued)

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