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Rationalising Sugar

Oct 02, 2009 Editorial

The news that the management of the Guyana Sugar Corporation (GuySuCo) has decided to transfer some workers from Diamond estate on the East Bank of Demerara to La Bonne Intention (LBI) on the East Coast of Demerara would seem to confirm GAWU President Komal Chand’s suspicion that the corporation intends to close down that location’s field operations.
The sugar factory at Diamond, of course, had been jettisoned since the seventies. Chand’s assertion that, “GuySuCo has not been carrying out rehabilitation work and application of fertilizers on the estate” buttresses his surmise.
Workers are, not surprisingly, up in arms and have resorted to striking in protest. The union, the Guyana Agricultural and General Workers’ Union (GAWU), supports their position.
As we have always emphasized, worker dissatisfaction that results in industrial action and agitation is the last thing that the troubled sugar industry needs at this time. The difficulties precipitated by poor management, on top of the arbitrary 36 per cent cut in sugar prices imposed by the European Union, need no repetition.
What is more germane is that the government’s intervention, led by the President and the Minister of Agriculture, has forced the crafting and deployment of a Sugar Industry Revitalization Blueprint that had to envisage changes in the short, medium and long term.
It would appear that apart from securing enough cane to feed the mammoth Skeldon factory, the rationalization of the East Demerara estates is on the cards in the here and now. We would expect that the same should hold true for the West Demerara operations.
Even rank outsiders would appreciate that a host of factors have to be addressed to make the Demerara estates viable to a point where enough profits will be generated so that workers could earn wages comparable to those that prevail in the region.
At this time, the cost of production on the Demerara estates forces the corporation to cross-subsidize them from the Berbice operations.
The Diamond field operations may have become just too attenuated to the efficient operation of the East Demerara factories into which their canes were diverted upon the closure of the Diamond Sugar factory.
The lands at Diamond on which cane is presently grown may have also become too valuable from an opportunity-cost standpoint to justify their continuation on that basis. It has long been decided that a new highway, parallel to the present East Bank Highway that has become too congested, was on the cards.
Not only would this ease traffic congestion but would open up the Diamond sugar lands and, of course, much greater acreage to higher value-added usage.
But this latest decision of transferring Diamond sugar workers begs the larger question of the viability of the Demerara estates as a whole. One of the factors engendering high costs of production in Demerara has been the lack of economies of scale forced on the corporation when it has to run factories producing just around 30 thousand tons of sugar per annum – as do all the Demerara factories.
Can we viably sustain Enmore with LBI on the East Coast and Uitvlugt with Wales on the West Coast? We believe not. There will have to be consolidation eventually with only one factory each on the East and West Coasts of Demerara. Is this in the Blueprint?
From what the workers and the union are claiming it is obvious that they have not been integrated into GuySuCo’s strategic planning process.
In our editorial of a month ago, “Get workers on Board”, we advocated the introduction of workers’ representatives on GuySuCo’s Board along the German model of “co-determination”.  The present seemingly unilateral actions of management will inevitable be interpreted by workers as antagonistic and lead to a souring of industrial relations.
We repeat the closing admonition of that editorial: “(Guyana) cannot afford the historic antagonistic relationship between workers and owners/management – and neither can the latter parties.
“This relationship, however, will only change when we offer all sides an equitable stake in directing the fate of the industry.”
The GuySuCo interim Board should immediately sit down with the sugar unions, not only to discuss the Diamond redeployment, but their overall strategic plan for the mid- and long-term.

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