Confusion has replaced logic on the sugar industry

Apr 13, 2019 Letters

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DEAR EDITOR,

The GAWU, in the April 05 Guyana Chronicle, saw the newspaper expressing criticism regarding talk to re-open the closed estates. The state-owned newspaper in championing its view quoted several individuals and advanced a number of contentions.
The Union must say that it is confused that the Chronicle would venture in the direction it did. The very article, towards the end, reported that the Coalition Government, at this time, is actively considering proposals that would re-open the very closed estates, albeit under private hands.
So the obvious question is why the Chronicle is taking a position that is contrary to the Government’s stated position. It seems that logic has been thrown to the wind and confusion has obviously stepped in, as the paper seeks to defend the indefensible actions of the Administration.
In the article, the newspaper speaks about the support the Government provided to the industry, and its intent “…to protect the livelihoods of workers”. In our view, any Government worth its salt has a moral obligation to protect the well-being and welfare of its citizens. But if the Government was so concerned about the workers’ livelihoods, why is it that it pursued a policy that put some 7,000 sugar workers out-of-work?
Why is it that by closing estates it has essentially harmed the future of thousands of our nation’s children? Why is it that by its decisions, it has, in essence, taken away the vibrancy from the many communities that were linked to the shuttered estates?
For us, and for the thousands affected, it is most difficult to be convinced that the Administration really had the livelihoods of the workers at heart and in mind.
The paper next says that the State’s assistance to sugar was coming at the expense of other sectors. But lest we forget, the Administration’s support amounted to less than 3 per cent of its aggregate expenditure in office, so far. Moreover, that assistance benefitted at least 10 per cent of the Guyanese people. Clearly, the investment was more than worthwhile, considering that the State also recouped some through taxes.
We are also told that some of the dismissed workers have been able to secure jobs at the operable estates. This on the surface sounds nice, but fails to consider how much earlier those workers must rise from bed to travel the long distances to the still-operable estates. The fact that workers are forced to do so, also tells us about the dearth of job opportunities in their communities.
The Chronicle next says that some workers have been employed in other sectors while some are engaged in self-employment. This again sounds plausible, but have the Chronicle, or for that matter the powers-that-be, asked themselves to what extent is this really so?
The state-owned paper, quotes Dr Justin Ram, the CDB’s Director of Economics, who said that the sugar industry’s survival is linked to, among other things, “…the utilisation of technology to allow it to become competitive in the modern world”.
The Union agrees with Dr Ram’s assessment and we urged such an approach be taken by the Government. Dishearteningly, as we all well know, the Government went in a different direction. Interestingly, and one could say perplexingly, the Administration, as far as we know, has not explained why it didn’t embrace the view expressed both by GAWU and Dr Ram. It seems to us that there is more in the mortar than the pestle.
The Chronicle next says that an economist, Sydney Armstrong, opined that the minimization of the sugar industry was “the way to go”. The GAWU wonders whether Mr Armstrong was correctly quoted, as the article later quotes Mr Armstrong as saying that the industry’s survival could also be assured through “…getting GuySuCo into value-added processing”.
Again, this was a major plank of the GAWU’s position. Moreover, the Government also accepts such an approach, as it approved, ostensibly, the borrowing of $30B of which a significant proportion, we are told, will be spent on ventures that moves the industry up the value chain.
The Union saw too that Mr Armstrong is quoted as saying “…Brazil is producing it for about US$0.14 cents per pound”. We find this statement interesting, as at this point in time, sugar on the world market is being sold at a lower price. The point we wish to make here is that no country in the world produces at the world market price, but the difference between cost and price are covered through various mechanisms employed by respective sugar-producing states.
On this score, Mr Christopher Ram, in his presentation to the Sugar CoI, pointed out that the World Bank said “…the international sugar market is one of the most highly distorted agricultural commodity markets. Raw and refined sugar markets, it noted, are generally characterised by significant and widespread domestic support and trade distorting policies, such as guaranteed minimum payments to producers, production and marketing controls (quotas), state-regulated retail prices, tariffs, import quotas and export subsidies”.
Mr Ram goes on to say “[t]here is nothing in the available literature to suggest that this situation has changed in any significant way”.
The paper also spoke to Mr Rawle Lucas, who opined that the assistance to sugar was not bringing any benefit to the economy. Here we wish to point out, that the CDB, in assessing a request to finance the Sugar Industry Mechanisation Project opined “…it is economically viable for GOGY to continue subsidising and protecting the cultivation and harvesting of sugar cane and processing of sugar for export and local consumption.”
The CDB further said “Projects and programmes that enhance sugar cane cultivation and sugar manufacturing have the potential to earn foreign exchange, but may not be always financially profitable. Consequently, given the importance of foreign exchange to the economy, such operations may, at times, need government’s protection and/or support in meeting operating and capital costs”.
Indeed, given the situation playing out in the foreign exchange market, it is clear that the CDB’s assessment was correct.
The GAWU, like many others, strongly upholds the view that the decision to minimize the sugar industry was patently wrong and the ramifications will be felt not only now, but in the future as well. Today, in the areas of the closed estates, some children cannot attend school regularly; bills are not being paid in a timely manner; families have broken up, and the provision of healthy meals for some is not a regular feature.
While some may choose to consider economics and finance above all other matters, at the end of the day it is people who are suffering and facing hardship and no amount of propaganda can wish away that reality. At this time, we reiterate what President David Granger said in December, 2017, that people must come before profits!
Yours faithfully
Seepaul Narine
General Secretary
GAWU

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