‘Govt. cannot continue to prop-up loss-making GuySuCo’—WPA

Nov 06, 2024 News

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…says sugar is being subsidised for world market

Kaieteur News- The Working People’s Alliance (WPA) said that the government cannot continue to prop-up the loss-making Guyana Sugar Corporation (GuySuCo) by doling out billions to the industry which in turn subsidises the price of the product on the world market.

Reports are that the corporation has been suffering yearly losses despite huge spending by the PPP/C administration. Speaking at a news conference on Monday, Co-Leader of the WPA, Dr. David Hinds was asked to state the party’s position in light of heavy financial losses by a GUYSUCO report, “do you still hold to the view that the estates should not have been closed as recommended by the COI with Dr. Thomas?”

Hinds told reporters that “We do however continue to believe that it is not sustainable to maintain the industry in the way it is being maintained with the large subsidies from the government. We cannot continue to produce sugar at the high price that it is being produced. In effect what we are doing, and what we continue to do is to subsidise those who buy our sugar on the world market.”

Stating that the current world market price of sugar is somewhere around 12 cents per pound, Hinds highlighted that Guyana is producing sugar at around 40 cents per pound, “therefore in actuality what we are inevitably doing is subsidising the people who are buying our sugar and we think that that is not sustainable.” Dr. Hinds mentioned that the WPA is in no way surprised that the industry is in trouble and they are of the opinion that it is time for another look to be taken at the industry to see the current situation and what changes need to be made in real time.

“So yes, we recognise that there is trouble in the industry and there continues to be trouble but as a party, we are not guided by decisions that are made at the top of our heads. We supported a Commission of Inquiry a decade ago and we would not hesitate to support another Commission of Inquiry to see where the industry is at the moment and to make recommendations for the necessary changes,” Hinds said.

Only recently, the Alliance For Change called out the government for its treatment of the dire situation at GuySuCo, saying that merely changing the company’s Chief Executive Officer (CEO) will not fix the problems. Former Leader of the AFC Khemraj Ramjattan said that “The sugar industry suffers fundamental problems, which cannot be solved by replacing CEOs, or fooling Guyanese with expectations of the hollowest order.”

Going into some statistics, he told reporters that out of the 37,000 tons target for the first crop of 2024 GuySuCo managed to produce only 6,738 tons and for the second crop so far, they have managed to produce 25,000 tons of the 63,000 tons, with two months remaining to conclude it.

“All the chatter which came from former PPP appointed CEO Sasenarine Singh early this year that GuySuCo will realise increased sugar production in 2024, by expansion of acreage, retooling and mechanization was just poppycock and propaganda. When the PPP realised that Sase has fooled them, it sent Sase Singh off to Brussels and then brought one of its loyalist activists Mr. Cheong as the replacement,” Ramjattan lamented.

He highlighted that the loans taken to facilitate the project, which he deemed as “probably the worst investment ever since independence” is saddling the backs of Guyanese with a minimum repayment of US $3.8M per year. “This burden would run at a minimum until 2033. Additionally, subventions to GuySuCo from the PPP government this year alone stands at $9.2 B. Since the PPP’s coming to office in 2020, an approximate sum of $43B, have so far been imputed to that corporation. So, the sweet talk of improving the production is thus all hollow. The intent was to create great expectations to the support base and to perpetuate massive misspending and corruption in the sector,” the former AFC leader said.  Furthermore, he repeated the party’s position that “sugar has been dying since Guyana lost our preferential prices to the European market when the WTO ruled that the preferential prices violated open market rules.”

The Guyana Agricultural Workers’ Union (GAWU) also recently raised concerns about the GuySuCo not meeting its production target. As of October 26, 2024, the Guyana  Sugar Corporation Inc (GuySuCo) produced 24,711 tons of sugar, representing just 39 per cent of its 63,276- ton target. GAWU said as much as 60 per cent of the cropping period has been exhausted, and it is apprehensive that the deficit cannot be closed in the remaining cropping weeks.

According to GAWU from its perspective, “the industry’s sad situation cannot be delinked from the management of its cultivation and agricultural operations. According to GAWU, before the commencement of the crop, the Union drew GuySuCo’s attention to several important issues that required intervention. “It appears that our concerns were brushed aside. Recently, we have expressed concern about the production rate and trajectory. It seems that those charged with agricultural management in the industry have, for reason/s best known to themselves, chosen to turn a Nelson’s Eye.”

GAWU said given the conducive weather to mechanised sugar operations over the past few weeks, it is puzzled that daily production levels remained constrained. “It begs the question: What are the factor(s) which have inhibited production levels? The industry remains heavily reliant on manual cane harvesting complemented by mechanised loading, a practice that is now decades old.”

(‘Govt. cannot continue to prop-up loss-making GuySuCo’—WPA)

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• Government, market. Subsidize, sugar, WPA

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