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Guyana urges EU to be flexible on sugar-cut budget support

Feb 15, 2011 News

…loss of 14M Euros not a lost cause-Agri Minister

Government yesterday called on Europe to be more flexible in its assistance to the sugar industry instead of commenting on possible future productions.
Questioned yesterday about Head of the European Union in Guyana, Geert Heikens, said that the Guyana Sugar Corporation (GuySuCo) has set too ambitious a target for this year, Agriculture Minister, Robert Persaud, urged that the body desists from commenting.
Rather, he said during a press conference, the EU should be urged to “look” at how it can fulfill its obligations and commitments rather than “offer commentaries on what is possible and not possible”.
Last week, Heikens told the media that 300,000 tonnes of sugar targeted by Guyana may have been too ambitious. He stopped short of suggesting that the entity plucked figures out of the air.
Last year sugar production was its lowest in some two decades at 220,000 tonnes after two target adjustments. Ambassador Heikens said that the failure to reach the production target may have been responsible for the country losing 14M Euros.
The European Union voted 90M Euros by way of budget support for Guyana following the EU decision to modify the sugar treaty, leading to price cuts for Guyana. So far The EU has released 58M Euros to the Foreign Ministry with a further 18 million Euros due this year. The total sum would be released in four tranches.
“We had anticipated that the EU would be flexible for the (country’s) Sugar Action Plan and that there will be more consultations as we move forward,” Persaud stressed.
Initially, the Minister admitted yesterday, he had some questions over the GuySuCo’s targets which were between 298,000 and 303,000 tonnes of sugar for this year.
With 40,000 tonnes of sugar from canes brought over from last year and other projections, the target seemed likely, the Minister said. The problem is not the availability of canes but rather how to get the canes to the factory.
According to Persaud, it is the hope that the EU would be “sensitive” to these issues. Last year, the country lost $10B from an overall 36 per cent price cuts which took full effect.
Regarding the 14M Euros, the Minister does not believe that it is totally lost since Guyana and the EU are constantly in dialogue.
Further, Guyana is the only ACP country to be drawing down in such a significant way on the EU’s budgetary support since the price cuts.
The EU Ambassador had said that the 14M Euros loss could have been averted had Guyana not insisted on tying the budget support to production targets, a mistake that the programme planners do not intend to make again.
Ambassador Heikens said that the country must hope that the Skeldon sugar factory performs at the desired level. He said that it is a huge investment given that the country has chosen to remain in sugar.
This decision at this time could prove rewarding given that the world price for sugar is high at this time.
The EU has contributed funding for the Enmore Packaging Plant. Asked about monitoring the money, Ambassador Heikens said that once the money goes into the budget there is no way that the EU can trace it.
According to Ambassador Heikens the EU would have no way of knowing how much of the money is actually spent on the packaging plant.

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