THE SUGAR INDUSTRY – TO BE OR NOT TO BE?

Nov 24, 2024 Consumer Concerns, Features / Columnists, News, Waterfalls Magazine

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…CONSUMER CONCERNS

                                                                                                 

  By PAT  DIAL

Kaieteur News- In the 18th and for much of the 19th century, Sugar was among the most profitable investments in the world.  Most of the Caribbean countries were founded and peopled because of Sugar and its earnings created a rich and influential class in Western Europe, particularly in England, France and Holland.  Indeed, Sugar was regarded as so valuable that many wars were fought for the possession of Sugar colonies and in the final peace treaty of one of those wars, for example, Holland found it was advantageous to surrender its colony of New Amsterdam, now New York, to the English for Suriname.

Guyana, formerly the Dutch colonies of Essequibo, Demerara and Berbice, mirrored this same characteristic of profitability from their sugar plantations which colonies like Barbados and St. Domingue (Haiti) had long been enjoying. In the 19th century when the Booker Bros. company consolidated most of the colony’s sugar estates, the Sugar Industry became very profitable and Bookers grew into a large company and the most important economic and social force in the colony.

Independence came in 1966, by which time the Industry had been nationalized and began a spiral of decline and survived only  because of the subsidy granted to exports by Britain, the former colonial power.  With the change of  circumstances, the subsidy was removed and the Industry became financially unprofitable and had to be supported by Budgetary subsidies.  When the APNU/AFC came into office in 2015, they decided to end the financial drain of the country’s finances by closing some estates with intention of finally closing the Industry.

An opposing body of opinion felt that to regard the Industry in narrowly financial terms was one-dimensional and was a formula which was applicable to smaller companies and not to a large company which affected so many other areas of Guyanese social and economic life.  President Irfaan Ali, in his media engagement programme, “In the Seat”  was optimistic that the Industry  would again be financially profitable and that even in its present state, it is so economically and socially important to other areas of Guyanese life that it must be maintained until it again becomes financially profitable.

It was pointed out by President Dr. Ali that the present budgetary support of the Industry will decline as the Industry is revived and begins to be less and less unprofitable.  At the present, the reviving of the Industry is almost like beginning the Industry de novo since the factory and other physical infrastructure of the Estates had been neglected and almost destroyed and the work culture of the Industry had almost disappeared. The initial costs of reviving the Industry would therefore be high but this will decline as the Industry regains its efficiency and the Gas-to-Shore project begins to supply electricity at half the present cost. Eventually, the subsidies will not be needed and the Industry would again return to its halcyon days.

The Industry, even in its present debilitated state is of positive help to other areas of the Economy.  For one, it makes available to the Guyanese consumer first quality sugars at affordable prices.  If there was no Sugar Industry, Guyana would have had to import its sugars and first quality sugars would not have been affordable to a large segment of consumers.  On one occasion, for example, Guyana imported sugar from Guatemala which turned out to be of extraordinarily poor quality and was rejected by many consumers.  The existence of the Sugar Industry therefore, in addition to satisfying consumer needs, saves the drain of foreign exchange which would have been expended to pay for imports.

With the use of Molasses produced in the Sugar manufacturing process, the Rum Industry has been able to produce the best Rums in the world.  Rum producers have tried imported Molasses, but their preference remains for the Guyanese Molasses and as such, the Rum Industry and most of the business community support the maintenance and revival of the Sugar Industry.

The Sugar Industry has always had a multiplier effect on the local economies in the rural areas and President Ali gave an example: “When you look at what Sugar meant” he said, “think of Wales for example.  When the factory was closed down at Wales . . . a market that had hundreds of vendors closed immediately and the shops around also closed”.

When one considers the value of the spinoffs of a Sugar Estate and the Industry as a whole and places this against the financial loss the Industry would have sustained in any one year, there is at least an equalization.  The Management of the Industry, the Indian and Cuban expertise working with the Industry, the State Authorities and the workers and their Trade Union are all optimistic that Sugar will again be an essential part of the Guyanese Economy.

(THE SUGAR INDUSTRY – TO BE OR NOT TO BE?)

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• Caribbean countries, CONSUMER CONCERNS, Dutch colonies of Essequibo, President Irfaan Ali

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