Private Sector urges Govt to rethink closing sugar estates

In light of Government’s expressed intention to downsize the sugar industry via the closure of estates, the Private Sector has highlighted several reasons why the State’s largest provider of employment should be allowed to continue current operations.

In a joint statement released by the Private Sector Commission (PSC) and several associate bodies on Monday, Government was implored to “hold its hand” on the current approach towards closure of sugar estates.

“The Private Sector stands ready to place its considerable experience at the disposal of and to work with Government to explore all possible options to avert closure,” the PSC announced.

Recognising the contributions the sugar industry has made to the country’s economy since being taken over by the State over 40 years ago, the Private Sector bodies reminded all stakeholders of the vital role sugar continued to play in the upkeep of the nation’s sustenance.

“The industry remains the largest employer other than Government and the main foreign currency earner. GuySuCo’s role has expanded to include providing Drainage and Irrigation (D&I) for many communities and other sectors as well as providing community health services,” the PSC noted on Monday.

It was also highlighted that the industry encountered many financial challenges over the years, compounded by the loss of the preferential pricing of the lucrative European Union (EU) market. The Private Sector, however, espoused the view that the industry could be turned around, reminding that the Administration’s inquiry was against the closure of estates.

“The Government-initiated Commission of Inquiry (CoI) did not recommend closure of any estate, but, on the contrary, recommended divestment into private hands,” the Private Sector pointed out.

The PSC further stressed that a 2015 audit of the financial statements of the Guyana Sugar Corporation (GuySuCo) had disclosed that more than $10 billion would be removed from private employment income should Government proceed with the closure of estates.

“This, in turn, would have a direct negative effect on consumer spending in the communities, which, directly or indirectly, depend upon income from sugar. Such a decline in consumer spending would also have a diminishing impact upon all commerce with concomitant negative spin-off effects on the economy as a whole,” the PSC posited.

Highlighting the country’s current challenges with the availability of international currency, the PSC reminded that GuySuCo was a major earner of foreign exchange, noting that estate closures would severely impact the availability of foreign currency which could increase the price at which it is sold.

“The restoration of Guyana’s economy is inevitably, and intimately, linked to the future of sugar. It would be sad to lose the sugar industry and realise five years later that this would have been a success story. We must learn from the history of the scrapping of the railway which would have opened up our country to development,” the bodies outlined.

“Our members are located across the length and breadth of Guyana and the survival of their businesses depends upon a public that spends on goods and services. Most income generation is derived from employment and when this is reduced significantly, it affects the entire chain, from manufacturing and importation to household consumption,” the PSC said in the joint statement.

The associated bodies of the PSC, joining the call against estate closures include the Georgetown Chamber of Commerce and Industry (GCCI); the Upper Corentyne Chamber of Commerce and Industry; the Linden Chamber of Industry, Commerce and Development; the Region Three Chamber of Commerce and Industry; the Central Corentyne Chamber of Commerce; and the Berbice Chamber of Commerce and Development Association.

On May 8, Agriculture Minister Noel Holder presented Government’s white paper on the future of the sugar industry to the National Assembly. He had announced that two sugar estates would be closed and the annual production of sugar would be reduced, among a number of other measures, as part of a new policy on the sugar industry.

He further noted that GuySuCo would have three estates and three sugar factories. These being Blairmont on the West Bank of Berbice, Albion-Rose Hall in East Berbice and the Uitvlugt-Wales Estate in West Demerara. The three estates will be complete with factories and will have cane supplied from all locations, the Minister had noted.

He had also claimed that this process would result in improvements to the relationship with some cane cutters, estate staff and about 1710 private cane farmers.

A series of protests followed the announcement of the closures. In December 2016, sugar operations ceased at the Wales Estate, leaving over 1000 workers without employment. Thousands more, their families and their community stand to suffer the consequences of more closures. Additionally, many farmers have cited financial and infrastructural challenges in attempts at crop diversification.