…following unaddressed challenges in sugar, rice sectors
The Finance Ministry’s recently released end-of-year Outcome Report has recorded even bleaker statistics on the nation’s manufacturing sector than Minister Winston Jordan’s 2017 budget had projected.
Finance Minister Winston Jordan during his budget presentation
The report, which covers the year 2016, contains revised projections from those presented in budget 2017. It stated that the manufacturing sector contracted by 9.5 per cent and not the 7.1 per cent Jordan had announced in November.
The decline in the manufacturing sector was linked to the shrinking production in agriculture. The manufacturing sector is heavily dependent on sugar and rice production, a fact that Jordan had acknowledged last month at a press conference.
“Very little manufacturing activity takes place in Guyana… The last (time) I looked at manufacturing without sugar and rice milling, (it contributed) a mere five per cent to GDP (Gross Domestic Product), which is very low,” Jordan had told journalists at the press conference.
The Finance Ministry has revealed that, overall, the agriculture and fishing and forestry sectors had contracted by 10.4 per cent in 2016. According to the report, this is 0.9 per cent more than the rate projected at the time the 2017 Budget was presented.
“Sugar production contracted even further than projected in November 2016, as the industry underestimated the negative impacts of late planting of the second crop on production.
In addition, the late arrival of spare parts for factories negatively affected the processing stage of production,” the report revealed.
At his 2016 end-of-year press conference, Agriculture Minister Noel Holder had explained that sugar production for the year had been plagued by poor labour turnout; lack of spares; equipment shortages, in particular cane punts; and factory breakdowns in the sector.
He had also revealed that the shortage of skills and experience, in addition to underinvestment in the industry, was taking its toll.
The 2016 second crop had started late as a result of the wet conditions which succeeded the drought. Holder had said that the Guyana Sugar Corporation (GuySuCo) would be unable to harvest all its cane before the end of the year.
But the Government has also embarked on a deliberate plan to downsize production in the industry, with profitability being cited as a reason. Following a visit from an International Monetary Fund (IMF) team, Government had been warned of the social impact from making these and other decisions.
Rice production has also performed worse than projected. This has been blamed on lower-than-expected yields and acreage, all related to late planting.
Rice farmers currently face a myriad of challenges, which include insufficient supply of water in their fields, the El Niño weather phenomenon, combating paddy bugs, and fiscal matters such as late payments and indebtedness.
Farmers also have to contend with fertiliser and pesticide prices.
Farmers have stated that they have not been afforded the prices they were once offered by the previous Government to assist them in offsetting their overhead expenses.
Since the loss of the Venezuelan oil-for-rice agreement with Guyana in 2015, farmers have not been getting the lucrative prices they were once paid per bag of paddy.
Farmers in Region Two recently voiced their dissatisfaction about the prices offered by millers, which range from $1800 to $2400 for grades A and B paddy.
The end-of-year report has however stated that fishing and other crops were the only industries in the agriculture sector to experience positive growth.
