WOES IN THE AGRI SECTOR

Aug 29, 2010 Features / Columnists, Peeping Tom

We are in the month of August and the rains are still with us. This is again quite unusual for this time of the year, but it fits into the patterns associated with climate change.
Last year, stretching right into April of this year, there was a long dry season. The dry season was so long that it caused problems for many rice farmers, some of whose fields were parched while others struggled to have sufficient water for irrigation. The May/June rains of this year came as a relief to many, allowing fields to be irrigated and storage canals to be replenished.
The rains have persisted right up to now, but they have not been threatening. This is why it is disappointing to have read that in some areas of the country, yields are going to decline.
This is bad news for the rice sector. Sustained growth of the industry will eventually have to be based on increased yields. There is simply not the land available to continue to increase acreages under production. As such, there will come a time – we may already have reached that stage – when increased production will have to come from increased yields.
The reports of projected decline in yields in some areas are therefore worrying. Even though it is not likely to cause a deviation from the original projections for rice production for this year, it will affect margins for affected farmers since it is yields that decide whether a farmer breaks even or shows a profit after his crop has been reaped.
A poor yield will almost certainly consign a farmer into debt, while a good yield will ensure he has sufficient funds to go back into the next crop. Having more than one good crop in succession is necessary for a farmer to survive. Without it, the debts will pile up. While the prices may be good at the moment, you cannot exist on the success of one crop. Right now farmers are at the whims of the open market since there is resistance to the government setting prices.
Rice and sugar are the mainstays of the agricultural sector. A bad year for rice will compound the problems in the economy since it is now almost certain that sugar will underperform this year. Sugar production targets have been significantly slashed this year. 280,000 tons of sugar is not likely to be produced. By now sugar production should have been nearing 400,000 tons. The industry seems to be in an extended crisis which may take another ten years to overcome. There is no quick fix for the problems of the sugar industry.
When your two major crops which account for the bulk of your agricultural GDP are suffering setbacks, there is a serious problem. When this is happening on the eve of an election year, the problem becomes magnified. When sugar and rice are facing problems at the same time, the situation is not good for the country.
In the case of sugar, the weather is being blamed since in some areas, canes cannot be harvested. But the unseasonal weather patterns cannot be the sole contributing factor to the decline of the sugar industry.
There is a turnaround plan for the industry but it seems as if the plan is turning in the wrong direction. Any recovery of sugar must involve increased production. The slashing of the original production targets for this year is therefore a setback and can result in another year of losses for the sugar industry which may further force the corporation to dump some of its assets on the local market.
This will make life difficult for sugar workers. It will also mean that the government may have to come to the rescue of the sugar company, and this may force it again to constrain wages for the sugar workers who got a pitiful award in last year‘s arbitration.
The situation has to be carefully monitored as we approach the end of the third quarter of the year. The Guyanese economy is not diversified enough to allow it to disregard production in the agricultural sector.
Rice and sugar will remain important to the Guyanese economy for some time. Poor second crops will increase the problems for workers and farmers alike. It will also cause business to suffer, because it is now firmly established that in the out-of-crop period, most businesses suffer a decline. This is how important production in the agricultural sub-sector is to the overall economy.
The weeks ahead will determine more than just the type of Christmas that sugar workers, rice farmers and their families will enjoy. It may determine the future of Guyana, and who knows, the outcome of next year’s elections!

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