IS IT WORTH SUBSIDIZING GUYSUCO?

Oct 07, 2016 Editorial, Features / Columnists

Whenever GUYSUCO is in the news, the nation has to take a deep breath, because it is asking the government to cough up more of the taxpayers’ dollars to keep it afloat. GUYSUCO is on its dying bed and no amount of money can bring it back to life.
Warnings from some international experts over a decade ago that the sugar industry appears destined for unprofitability have fallen on deaf ears. The industry continues to operate in the red. But closing GUYSUCO could be seen as a death knell for governments whether it is the PPP or APNU+AFC because of the fear of losing votes.
The people know all too well about the problems facing GUYSUCO and they have resigned to the fact that the once prestigious “KING” sugar industry is no longer a viable entity. This should serve as a grim reminder to the government that GUYSUCO cannot be salvaged.
While there can be no denying of GUYSUSO’s past role as an essential component and lifeblood of the economy and as a major foreign currency earner, the government cannot close its eyes to the fact that it has become a drag on the country.
This government, like the previous administration, has taken little action to reduce its subsidies on GUYSUCO. For decades, some have argued for the privatization of the sugar industry, but the last government had refused and now this government is faced with the bitter medicine of injecting some $14 billion annually or $40 million a day to keep GUYSUCO afloat. Is it worth it?
It is true that the government subsidises other state entities, but that it could be seen as an enabler if it continues to subsidise GUYSUCO. It is unrealistic, to say the least. But is the government prepared to do otherwise?
So far, there has not been any plan or strategy by the Minister of Agriculture or anyone else in the government on the future direction of the sugar industry. Its CEO and the Board seem to be at a loss. Time has shown that the Minister, and by extension the government, is bent on continuing the subsidy to the industry with the aim that it could turn around and become profitable some time in the future. This may never happen, given the present state of the company.
This kind of thinking is similar to building castles in the air. For one reason, the cash injections of the taxpayers’ money whenever GUYSUCO comes begging are not the remedy. For another reason, the nation cannot afford that bitter medicine any longer because pouring money into GUYSUCO is like pouring water on a duck’s back.
It is time for the government to bite the bullet and take the criticisms and close those sugar factories that are unprofitable and keep those that are profitable. These are radical changes but in the long run, they will help to save the entire industry from total collapse. Indeed, these tough decisions must be made in the interest of the people and for the survival of the sugar industry. GUYSUCO requires immediate surgery.
The time has come for the government to be serious about continuing to subsidize a failing industry that has no hope of being profitable. Can the subsidies be sustained indefinitely without dragging down the economy? Can the government continue to be the cash cow for GUYSUCO forever? Subsidizing the industry is harming its competitiveness. There is no place for insularity when urgent action is needed. If the authorities have the nation’s interest at heart, it will end the subsidyof GUYSUCO.
The truth is GUYSUCO will not be profitable. The nation must demand accountability. To continue on the current course will only result in more disaster for the sugar industry.

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