Slowly but inexorably, it is clear that the production of sugar in Guyana is grinding to a halt. At the beginning of this month, the Board of Governors of GuySuCo briefed the Cabinet on several options in the face of what they considered to be an unsustainable level of subsidies demanded by the ailing Government-owned corporation. In 2015, the latter had received billion; billion in 2016 and requested billion for 2017. They estimated that GuySuCo would subsequently need an average of billion annually to cover operating expenses under the present plan in addition to the billion debt it is saddled with.
What has been troubling observers, however, is the decisions on GuySuCo seem to be driven more by politics than economics. When on assuming office, the Government was informed GuySuCo needed a massive infusion of funds, the Government said it was a “political gimmick”. They insisted that a Commission of Inquiry (CoI) examine the industry and make recommendations on the way forward. The million CoI was duly constituted with the Chairman of GuySuCo, Dr Clive Thomas as a member, and delivered its report last October. It was presented to Parliament at the end of the year and made public at that time.
Essentially what it recommended was GuySuCo be privatised in toto within three years. “In the interval, as the privatization process is awaited, the new management of GuySuCo must focus on basic essentials to rehabilitate the fields, factories and infrastructure of GuySuCo. There should be no accommodation for any projects which will demand limited funds. This is aimed at making the estates more saleable and attractive to investors, local and foreign. A few expressions of interest both formal and informal have been received.”
However, the ink had barely dried on the copy of the CoI to Parliament and the public when this newspaper broke the news that the Government had decided to close the Wales factory on the West Bank of Demerara. After a period of denial, the Government conceded this was indeed the case and that with the closure of the factory, some of the lands would be diversified into fish farming, some sold off and the remaining cane especially those from private cane farmers would be transported to the Uitvlugt, West Coast Demerara factory for processing. This would necessitate the construction of roadways that would cost at least billion.
This decision, which violated the central recommendations of the CoI, demonstrated conclusively that the exercise was simply window dressing. Additionally, further details surfaced that showed the plan on processing Wales’ cane at Uitvlugt was not feasible and most farmers would have to abandon cane farming. Now it has been reported that Wales was only the tip of an iceberg that involves actually closing four of the seven factories – Enmore; Rose Hall, Canje; Skeldon, and of course, Wales.
The Chairman of GuySuCo, Clive Thomas, announced that in addition to design flaws in the US0 million Skeldon Factory, the present equipment was “falling apart” and the cost to rehabilitate it would be a prohibitive US million or G billion. The Skeldon Modernisation Plan, which included the new factory, had been the centrepiece of a move to reduce the cost of sugar production in Guyana to make it competitive outside of the then existing preferential prices in protected European markets. According to one report, the abandoned lands of the closed sugar estates would be leased to “redundant workers” to produce crops identified in a yet undisclosed “diversification plan”. Specifically the Skeldon lands would be producing premium selling “aromatic rice”.
Since a sugar factory cannot be transformed to mill rice, this essentially means that the US0 million investment would be abandoned and probably a like amount will be deployed to transform cane fields into rice and other “fields”. The scheme as revealed, in addition to rejecting the advice of the CoI, seems harebrained and designed only to hasten the end of sugar in Guyana.
