Sugar is much more than a commodity with a market value

May 14, 2011 Letters

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Dear Editor,
The PNCR presidential candidate Mr. David Granger is reported to have said (Demerarawaves, Wednesday, May 10, 2011 edition) that should he be elected to office in the upcoming elections he would privatize a number of key state entities, including the Guyana Sugar Corporation, the Guyana Oil Company and the state media.
He was no doubt, playing up, as it were, to the private sector gallery since he was addressing members of the Guyana Manufacturing and Services Association when he made those remarks.
It would be recalled that similar sentiments were expressed by his political mentor the late Hugh Desmond Hoyte who indicated prior to the 1992 elections that should the PNC win the elections of 1992 one of the first things he would do was to privatize the sugar industry which incidentally recorded one of its lowest production target in 1990 under his presidency, a paltry 127,000 tons.
It is anybody’s guess as to what would have been the fate of the sugar industry today had the PNC still been in power. One thing for sure is that GuySuCo as we know it today would not have been around and most probably would have been shut down and with it the livelihoods of thousands of sugar workers and their families.
The demise of the sugar industry most probably would have been accelerated with the steep decline in the price of sugar following the end of preferential prices for sugar by the European Union.
For too long the sugar industry was treated by the PNC administration as a political football and was literally kicked around at the whims and fancies of the PNC regime. The problems encountered by the Corporation had little if anything to do with the nationalisation of the industry and everything to do with mismanagement and political shortsightedness on the part of the PNC administration. Sugar workers are broadly regarded by the administration as members and supporters of the PPP and every effort was made to squeeze the last drop of juice out of the industry with very little of the surplus extracted being utilized to adequately compensate sugar workers and for re-capitalization of plant and machinery.
One consequence of this vindictiveness on the part of the PNC towards the industry was an exodus of labour. Because of undercapitalization there was no programmed or scheduled replanting of new canes and a consequential reliance on ‘ratoon’ canes which in turn resulted in poor harvesting and low sucrose content.
The ratio of tons cane per acre (TS/A) and tons sugar per ton (TC/TS) were extremely low. Poor maintenance of plant and machinery led to significant productivity declines which coupled with industrial action on the part of sugar workers made the industry extremely untenable.
Similar treatment were meted out to rice farmers, again out of political considerations which resulted in sharp decline in export earnings which hurt not only the rice farmers but the economy as a whole. Rice production, like that of sugar, recorded its lowest production target again under the watch of Desmond Hoyte who was projected as an economic guru and a friend of the market.
It was not until the beginning of the 1990’s that the Hoyte administration took a decision to contract out the management of the sugar industry to Booker Tate as part of a broader reform package, styled the Economic Recovery Programme brokered by Washington through the International Monetary Fund and the World Bank. Under the recovery plan a management contract was executed between the Hoyte administration and Booker Tate which took over the management of GuySuCo under juicy contracts for expatriate staff who occupied almost all of the senior managerial positions. Under the management of Booker Tate, sugar production began to show significant improvements due to several factors among which were better incentives to sugar employees and a recapitalization programme which saw the planting of new canes and the upgrading of plant and machinery.
The increase in production was not the result of ‘superior’ management on the part of Booker Tate who retained most of the managers at the administrative and technical levels but resulted from a much better incentive package for workers as well as a recapitalization programme which boosted production and productivity levels. Under the PPP/C administration, the industry continued to make progress until the drastic cuts in EU preferential prices placed the industry under financial stress forcing the government to come to its rescue with massive injections of capital aimed at enhancing productivity levels to allow for greater competitiveness on the world market. It is in this context that the modernization programme commenced which saw the expansion of cane cultivation and the construction of a new state of the art plant at Skeldon.
It is to the credit o the PPP/C administration and the GuySuCo Board that the industry is embarking on value-added operations to compensate for declining sugar prices, the most recent being the commissioning of a sugar packaging plant at Enmore on the East Coast of Demerara.
This is consistent with a recent World Bank finding which argued the case for greater emphasis on value-added products rather than a reliance on exports of primary products.
Despite the enormous challenges facing the industry, the government has vowed not to close down the industry as advocated by opposition elements or to privatize as proposed by Granger.
Sugar is much more than a commodity with a market value. It is the lifeline of thousands of workers which cannot be wished away at the vagaries of the market.
The social costs are far too important to ignore. Privatization of the industry could spell disaster for those who depend on the industry for a living and for that matter on the economy as a whole.
Hydar Ally

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