CoI unlikely to address real problems facing sugar industry - Chris Ram

CoI unlikely to address real problems facing sugar industry – Chris Ram

Jul 29, 2015 News

Chartered Accountant Christopher Ram is of the firm belief that the critical problems facing the sugar industry go beyond the Guyana Sugar Corporation (GuySuCo). As a result, he said that the approach of the Commission of Inquiry (CoI) into GuySuCo is far too cautious and unlikely to address four grave issues before the industry.
On his blog, www.chrisram.net, he identified these troubles to be; whether Guyana can become competitive in sugar, given that its current cost of production is approximately US$0.40 per pound while the world sugar price is approximately $0.14 per pound; whether, how much, and for how long taxpayers should be asked to sustain GuySuCo with subsidies; whether, and to what extent, GuySuCo and Guyana should remain in sugar; and finally, if so, whether GuySuCo should remain in state ownership, alone or with private investors.
He said that these issues not only seem beyond the scope of the Commission, but appear to have been presumed as answered for them. Quoting a Government Information Agency (GINA) report, Ram said that the Commission is required to “develop a 15-year plan which is expected to bring the industry back to profitability and ensure long-term environmental and economic sustainability.” He emphasized that, “Every day of GuySuCo in its present form costs the taxpayers millions of dollars. There is no luxury of time.”

Chartered Accountant, Christopher Ram

The Chartered Accountant pointed out that one of the major concerns about sugar and GuySuCo must surely be to break the cycle of subsidies into which the country and taxpayers have been trapped. He asserted that the country will not move forward if it has to treat economic entities as if they were social services.
Ram stressed that no taxpayer can or will be happy with an endless flow of subsidies.
“It seems to make more economic sense to spend the money on termination benefits and retraining rather than annual subsidies. The days for treating sugar patronizingly must surely be over by now.
“Sugar in Guyana is more than GuySuCo. There are large private cane farmers in West Demerara, as there are in the Skeldon and Albion areas of Berbice. Not only are these operators not represented among the persons appointed by the Minister of Agriculture, but this “Commission of Inquiry” is not required to take evidence. It is almost inevitable then that important voices and views may be excluded. It does not even meet the minimum requirements which leading economist Professor Clive Thomas advocated a mere months ago.”
Those involved in the CoI include Mr. Vibert Parvatan who serves as the Chairman, Professor Clive Thomas who is tasked with Financial and Economic Analysis and John Dow and Joseph Alfred who are looking at Factory Operations.
Ram said, “By my reckoning the majority of the members have had some association with GuySuCo and bring relevant experience to the exercise. But even relevant in this case seems inadequate. For starters, it seems both misleading and a misnomer to call the body a Commission of Inquiry. The members were appointed not by the President under the Commission of Inquiry Act, but by the Minister of Agriculture as an administrative act. And significantly, the focus is more about GuySuCo than about sugar generally.”
He recalled that Dr. Thomas had written extensively on sugar and GuySuCo and said that in a series he did, he had identified two preconditions for charting the way forward. One was the establishment of a National Task Force leading widespread consultation, and the other, a professionally executed forensic audit.
Ram said, “I recall that Professor Thomas did not rule out privatization or ignore downsizing, estate closures and returning to foreign management. Readers will recall that it was Mr. Hoyte who had brought in Booker Tate in the late eighties.”
The lawyer continued, “Neither of Thomas’ preconditions has been met nor do the terms of reference – a copy of which I obtained only after dozens of telephone calls – which explicitly require the Commission to consider the broad areas which he had identified as options. It would therefore be interesting to see how Thomas’ bold views on the entity and the industry, are reflected in the report the Commission is required to produce in seventy days from the commencement of its work.”
He concluded that the scope of the CoI, its composition and its methodology are too restrictive to solve the fundamental, existential problems facing the industry. Ram said that even if the CoI were to demonstrate out-of-the-box thinking, the more controversial of its recommendations would have to be put to the country for wider discussion.