Have we finally hit upon the solution for GuySuCo?

Mar 21, 2022 Letters

Dear Editor,

In a recent speech, President Ali declared that GuySuCo can be made viable, just as the Guatemalan sugar industry. He quoted some revealing figures. Among these were the Guatemalan sugar industry supplies 30 percent of that country’s electricity demand during the sugar crop. The President also quoted figures on sugar cane yields showing that the Guatemalan yield is presently more than twice that of Guyana’s.
This latter statistic, Editor, holds the key to the perennial conundrum of GuySuCo: “too big to fail” and yet bleeding enormous resources from the Treasury, to the point where in less than two years, the Government has reportedly poured another G$30 billion into the industry. We are aware that succeeding Administrations have struggled with this huge problem and have tried a number of very costly solutions to no avail.
What seems to have eluded our policy-makers is how to address the critical underlying variable, quoted by the President, of sugar cane yields. These yields have been falling continually for more than 60 years to the point where they are half of what they were back then. Stakeholders in and out of the industry warned of the danger to GuySuCo’s survival resulting from this reality. GAWU has repeatedly referred to it. In one instance, GAWU, in response to the proposal to close the most loss producing estates, communicated to the Government in February 2017, that it was critical that “research be furthered with a view to improving sugar cane yields”.
It is a truism in the sugar industry that sugar is produced in the fields, and on this fact rests the viability of the industry. Increasing field yields and sucrose content is directly correlated with factory efficiency, quantity of sugar produced, bagasse available for cogeneration, and reduced cost of production. Doubling sugar cane yields could conceivably reduce cost of production by half.
Generally, increasing agricultural yields is founded on an effective research and development (R&D) system. This system requires highly trained professionals operating in an environment that is motivational, which usually means competitive and market driven. These requirements translate into the need for significant increases in resources spent on R&D. In general, Guyana spends far too little as a percentage of agricultural GDP, on R&D. We are way below countries such as Brazil and Chile, for example, who spend close to one percent of agriculture GDP on R&D. This has to change for GuySuCo and agriculture in general to be sustainable, and achieve dynamic growth. For the vision of agricultural expansion to be achieved, the R&D system needs urgent attention.
It is noteworthy that the EU provided huge resources over a decade ago for the country to invest to make the sugar and rice industries viable, in anticipation of the removal of the effective price subsidies. In the case of sugar, the funds were spent largely on “budgetary support”, a new factory at Skeldon and other investments, with little emphasis placed on R&D. In contrast, for the rice industry, the EU support was channelled through the Caribbean Rice Association, a private sector body, which wisely put the funds to rice research. The result was dramatically improved paddy yields and the survival of the rice industry.
It can be noted too that back in 2017, a research proposal to address falling sugar cane yields was submitted to the Government by the Caribbean Agri-Business Association (CABA). This proposal was based on organic soil enhancement technology, as successfully used in India, and was a collaboration of CABA with researchers in the Faculty of Agriculture and Forestry at UG. This proposal got lost in the “noise” of Special Purpose Units and, the preparation of estates for privatisation by the International Management Consultants.
We have somehow missed the opportunities to address the fundamental cause of our problem in the sugar industry. President Ali’s quoting of the Guatemalan sugar cane yields will hopefully point us in the direction of the essential solution not only for GuySuCo but for the entire agricultural sector.

Yours sincerely,
Fitzroy Fletcher
Former Guyana Director of CABA

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