Dear Editor,
I wish to thank my good friend Tony Vieira for his letter published in the media on November 1, 2020 in reply to an earlier letter of mine on the challenge in the sugar industry.
From the onset, let me say that I do not disagree with Tony on his “aquaculture” proposal, but my view is that it does not have to be at the expense of sugar. We can do both, and aquaculture could be perused in other areas of our country and provide even greater employment and wealth-creation.
Some or all of the arguments by Mr. Vieira against sugar are really managerial in content, and speak to the need to modernise the industry. I strongly believe that sugar still has a great future, its best days could well be ahead of it.
The biggest challenge in achieving a vibrant industry is fundamentally managerial.
For instance, Tony had told us about getting cut canes to the factory within 48 hours. This is a logistical/ managerial issue which should not be a determinant regarding the planting of canes.
I do not agree with him that our high cost of production is as a result of our rainfall pattern; I think a lot of it has to do with the inefficiencies in the factories, and that is a problem that could likewise be solved with improved management and some investments in the factories to enhance their extractive capacities.
Our rainfall issue is not a problem, as Mr. Vieira implies, but is more of a blessing; because of our rainfall pattern, we get two crops per year, as compared to other countries.
Mr. Vieira hinted at mechanisation, suggesting that it could not be done. However, if you look at the industry in Louisiana, where conditions are similar to ours, we see quite a lot of mechanisation there, because the Louisiana industry found engineering solutions to soft soil condition.
We in Guyana can go to semi-mechanisation. For instance, the field design at Skeldon was done to accommodate both mechanical and semi-mechanical harvesting; and the lands at Enmore were converted to facilitate both semi-mechanical and manual harvesting. So, we see that this is not re-inventing the wheel; it was done, it has been done elsewhere in the world, and it certainly could be done here. Indeed, we had gone a considerable way in this direction before the industry was struck by the “PNC hurricane”.
I did mention in my earlier piece that we can produce ethanol without sacrificing sugar production. My view is that we should arrange our factories to be able to switch quickly from sugar to ethanol, depending on the prevailing prices.
Implicit in Mr. Vieira’s letter is the idea that the price of ethanol is stable. It is not; it is a function of the price of fuel. That is why we should be able to switch from one to the other, as the Brazilians do. The price of raw sugar will not always be low, since the amount of countries going out of sugar production would surely create shortages which would send prices up again.
In any case, my view is that we should gear the industry away from producing raw sugar and to the multitude of products that it can produce. In my previous piece I mentioned some of the value-added products we can peruse.
The issues plaguing the sugar industry have firstly to do with management. We have to have the right people for the jobs. I am not convinced that this is the case at the moment. We are not tapping into all the rich experience that we have available here, many highly-skilled Guyanese are “kicking bricks”. Instead, we have in place some persons who seem woefully short of, or totally lacking in, the skills needed for this major effort to turn the industry around.
I spoke about attitudes both on part of the managers and workers. For the industry to go forward, sacrifices have to be made in this period. The industry is almost on its back, and therefore we should ask management and senior persons to take a salary cut to show total commitment to our cause. We can’t pay the same salaries as when the industry was vibrant. This is important, since it is clear that the workers would also have to be asked to make sacrifices in terms of wages at this time. However, we must not put all the burden on the workers.
Moreover, we must not confine ourselves to one form of ownership. We can have a rich mix: State-owned the factories, joint ventures’ private and cooperative ownership in agriculture and in the production of new products. Joint ventures and/or private in a new distillery, or in a new refinery and in other products. There are many other forms that can be explored.
To conclude, I believe that we need a strong technical team in the field as well as in the factory, to improve processes and to cut costs. GuySuCo could save millions in switching to using liquid fertilisers, which we can produce ourselves. Another area in which we can save a lot is in procurement, wherein we purchase inputs that could create significant savings, which the industry badly needs.
Failing to tackle these problems now – the people’s problem being the most important – would only result in the industry throwing money at the problem, which is a path to failure and to the demise of the industry.
We must avoid that; we can avoid that, and GuySuCo can take its place once again.
Sincerely,
Donald Ramotar
Former President
