How much is too much?

Aug 18, 2015 Editorial, Features / Columnists

Yesterday, for the first time since the election, members of the opposition People’s Progressive Party/Civic (PPP/C) led by former president Bharrat Jagdeo, took their seats in Parliament to debate this year’s budget proposals. The sugar and rice industries will of course be the most serious areas of contention. For decades, sugar and rice have been the backbone of Guyana’s economy and notably, the stronghold of the PPP in terms of votes.
The 2015 budget proposals speak to the importance of the rice and sugar industry to the economy and by extension the people and the country. Even though the price and exploration of gold have in recent years been noteworthy, rice and sugar remain the main economic activities, the largest foreign exchange earners and in the case of sugar, the second largest employer of personnel after the government.
Guyana was once considered the bread basket of the Caribbean, but that is no longer the case due to the decline of agriculture products. The country’s potential to regain that status depends on the ability of the government, to somehow make a major entity like GuySuCo profitable and also stave off the impending crisis faced by the rice industry should Venezuela makes good on its promise and cancel the rice agreement.
The Finance Minister has allocated $23B to pay thousands of rice farmers and given an $8.2B lifeline to the sugar industry. The APNU+AFC Government obviously recognises the importance of rice and sugar to the economy, therefore it senses that it would be political suicide if it allows either industry to collapse. However, the development of a long-term strategy is imperative.
During the years when the prices for sugar and rice were high, there was better management, and production was not affected by floods, drought or some combination of these natural disasters, economic growth rates were also high. But with the rising cost for oil, fertilizers, machinery and other items, production declined, foreign exchange dried up and the country was struggling.
In good and bad times, sugar and rice dominated the country’s economy until the 1970s when the former was nationalized by the then PNC government. In that period, bauxite became the largest exporter and foreign currency earner, but sugar and rice remain the largest sources of employment and the heart of the nascent development. But their sharp declines in prices and importance on the world market have resulted in vast areas of land lying idle and in ruin, abandoned factories and scores of able-bodied unemployed young men and women.
As has been argued ad infinitum, sugar and rice had enormous potential, however, a litany of explanations have been recently advanced as to why they did not live up to that potential. Mismanagement has been at the forefront, youths no longer interested to work in the agriculture sector; shabby farm roads; poor irrigation systems; lack of investments and poor marketing and trade arrangements. But this is not the whole story. Other reasons include poor advice from government experts on the technology of planting, nurturing and harvesting, and indirectly, the continuous flow of remittances, which in many cases means that the recipients do not have to work.
The combined budget allocations amounting to $31.2 billion suggest that the current government is serious about saving the sugar and rice industry, at any cost, and intends to strengthen and expand agriculture services to ensure that the technical advice given to farmers and investors is of the highest quality and aimed at educating the public of the importance of agriculture to the country.
It is hoped that such a novel approach will encourage investment in agriculture – more specifically rice and sugar – and boost production, as well as increase employment and export earnings. Modernizing the sugar industry in particular is crucial to its survival. But the legitimate question will continue to be asked: how much is too much to invest in an unsteady industry?

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