GUYSUCO gets $9B cash bailout in budget 2016

Jan 30, 2016 News

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-rice production projected to decline by 8.4 percent

By Jarryl Bryan
Budget 2016 featured some novel measures, but Minister of Finance Winston Jordan has announced that some $20.3B has been allocated to the Agriculture sector, a sector in which Government is anticipating a 0.3 percent growth.

The money includes $9B allocated to the beleaguered Guyana Sugar Corporation (GUYSUCO) for the year 2016, $800M more than last year’s allocation.
According to Jordan, “The Government will inject $9B to assist the (sugar) industry in its recovery and modernization programme.”
He projected that the sugar industry will grow by 4.8 percent to 242,287 tonnes. This is up from the 2015 figures of 231,145 tonnes.  Last year’s figures itself represented an increase over 2013.
“Though this level of production is still below the average achieved in the previous decade, the industry is showing encouraging signs of recovery,” Jordan said, on last year’s figures. “This, no doubt, can be attributed to new management and the measures taken to increase efficiency and productivity.”
Jordan also acknowledged that the sugar industry is threatened by weakening sugar prices, aged machinery and high production costs. This is a fact that has played an important role in the sugar industry over the past few years.
Currently, the sugar industry is going through phases that have shaken the industry to its core. A Commission of Inquiry (COI) commissioned in 2015 had recommended that Guyana Sugar Corporation (GUYSUCO) be privatized, after months of work including field assessments.
Subsequently, Government had taken the decision to close down the Wales sugar estate. In light of projections that showed that Wales stood to make billions of dollars in losses in 2016, it is a decision that was hailed by some but opposed by others.

Rice
Rice is projected to decline by 8.4 percent in its productivity, from the 2015 level to 630,028 metric tonnes.
“Not unexpectedly, the projection for rice output has been tempered,” he said. “(This is) as the industry continues its efforts to synchronize production and existing stocks with domestic consumption and external markets.
Government will continue to support the industry in accessing new trade partners, in view of the collapse of the Venezuelan market last year.
He also noted that while there was some uncertainty in the rice industry, its recorded output was 687,784 metric tonnes, representing an increase of 8.3 percent.
Jordan cited the premature end of the Venezuelan market, which accounted for 37.5 percent of the volume of rice exported in 2014, as the reason for the turmoil for both rice farmers and millers.

Hinterland agriculture drive
Some $598M will be allocated in a bid to diversify agriculture in the hinterland, riverain communities, the intermediate and Rupununi Savannahs.
“Diversification will make our Agriculture sector more resilient to economic shocks,” he said. “The Government proposes to establish several research, training and extension facilities in such locations as Ebini, Hosororo, Manari and Bina Hill.”
According to Jordan, this will be with the view of promoting sustainable food production that can support the ecosystem to the ability to adapt to climate change, drought, flooding and other disasters.

Livestock production    
Jordan announced ambitious plans for the cattle industry, including developing a milk pasteurization plant. He also noted that plans are underway for developing 4,000 acres of state lands in Region Nine to construct an agriculture station.
“This station will serve as a pilot for the sustainable harvesting of surface water for agriculture in this region,” Jordan said. “The land will be utilized for the rearing of cattle and small ruminants, aquaculture and planting of rice and vegetables.”
The livestock sub-sector grew by 5.8 percent in 2015, double the rate achieved in the previous year. For the year 2016, the livestock sector is expected to grow by 0.5 percent.

Fisheries
Meanwhile, Jordan affirmed that the Fisheries sub-sector is expected to record increases in output, growing by a modest 1.5 percent.
“This sub-sector will require greater policy and management intervention if it is to realise its potential,” he said.
Jordan announced that continued efforts would be made to attain Marine Stewardship Certification for the sea bob sub-sector.
He also said that the Vessel Monitoring System will be fully implemented on all trawlers, in addition to the enforcement of no-trawl zones and harvest control regulations.
Against this backdrop, however, Jordan reported that a negative growth was returned by the fisheries sub-sector of 7.2 percent for 2015.

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