…will weigh heavily on the nation’s budget – Finance Minister
In light of recent calls for another bailout to the cash-strapped sugar industry, Finance Minister Winston Jordan said recent challenges have made sugar “not as sweet”. At a press briefing Monday Jordan explained that to sustain what he deemed an “expensive industry” the Guyana Sugar Corporation (GuySuCo) would have to undergo “severe structural transformation” for it to be sustained.
“Sugar is not what is used to be and it is probably not as sweet and sugar has to go under severe structural transformation to survive as an industry,” Jordan pointed out.
In reference to the recent announcement that the Wales Sugar Estate would convert to new enterprises including dairy production, the Finance Minister revealed that government is currently petitioning the Inter-American Development Bank (IDB) for a loan to aid in agricultural development.
“We are talking to IDB to get an agri development loan that will look at agricultural diversification… this loan is going to target dairy and livestock development,” Jordan explained.
He however cautioned that the loan is still in its formulation stages. Notably, when the media questioned him as to whether considerations are being made for Wales to be covered by this loan, Jordan declined to confirm this.
“I’m not saying that [the loan] would include Wales,” he said.
“Diversification of sugar was attempted in the 1970s but we have to do more than attempt, we have to be realistic,” he pointed out.
The minister said sugar production is not able to compete in international markets. In this light, he explained that government has an obligation to support the ailing industry but warned the industry will weigh heavily on the nation’s budget.
“We have an obligation to try to carry [the industry], given its contribution to the economy; it is clear that this cannot continue forever but in the short-term the industry will weigh heavily on our budget,” Jordan pointed out.
The country’s finance manager also noted that most of government allocations to the industry has already been expended.
“This year, we put in $9B… today, almost 75 per cent of that has already been transferred… El Niño reduced the first crop by 30,000 tonnes. This obviously means that the sugar industry will be coming to government again for more money… this is the reality, this is not something that government can change overnight,” he posited.
He further noted that government had “stepped in” and allocated $12 billion for last year as “a matter of urgency” and was also of the view that too much was expended in the past to Skeldon Estate and the Enmore packaging plant. The minister likened the two initiatives to coloured elephants.
“The last government spent tremendous amounts of money including the money spent on the Skeldon and the money spent on the Enmore packaging plant and both of these are either white, black or brown elephants at the moment to which we are expected to carry,” he observed.
It was only last week that Chairman of GuySuCo Dr Clive Thomas related that the corporation would need another bailout as most of the funds were already used up. President Granger in response noted that his government might be inclined to award another bailout to the declining industry.
It was on Wednesday last that Agriculture Minister Noel Holder announced that Wales Sugar Estate would be converted to into a dairy product, fruit juices processing facility.
“We can see the land being used for dairy production, and we can see some land being made available to people in the area so that they could farm and provide milk, provide fruit juices, provide things of that nature, and we would want to see that replicated in other estates,” Holder is quoted by the Government Information Agency as saying.
Holder explained that since the lands will no longer be used for sugar cane cultivation, it will be allocated for cattle rearing, and cultivation of myriad of crops to sustain the operations of the juice plant.
“[This decision presents] an opportunity to convert the estate into a model for other areas within the sugar industry’s diversification,” he noted. However it is yet to be made clear as to how these measures will be implemented.
In January, it was announced that Wales would cease sugar operations by yearend.