Upper Corentyne Chamber wants drastic reform of sugar industry

-says farmers being short-changed

The Upper Corentyne Chamber of Commerce and Industry (UCCCI) is questioning the Guyana Sugar Corporation’s formula for paying farmers and wants drastic changes to the industry.

President of the UCCCI, Abraham Subnauth told Stabroek News that GuySuCo was reporting that some private cane farmers attached to the Skeldon factory have tonnes of cane per tonne of sugar (TC/TS) as high as 40 to 45. He said that it was his belief that there was no way the farmers’ levels could be that high.

Subnauth stated that Skeldon uses an average of 20 to 25 TC/TS and that private cane farmers regularly have a higher than average TC/TS. This is known but the recent assertions by Skeldon that the ratio was as high as 45 seemed highly unlikely.

Payments to farmers are based on the amount of sugar produced at the factory and not on the tonnage of cane delivered to the factory, which some farmers are lobbying for.

Abraham Subnauth
Abraham Subnauth

Subnauth told Stabroek News that GuySuCo provided reports to individual farmers on their TC/TS, but the reports were not based on controlled conditions. The factory would need to grind one portion of cane at a time to get a controlled reading for individual farmers, however this would incur significant downtime and would be a waste of operational time.

The UCCCI president stated that core sampling could be a solution to properly testing the sugar quality. GuySuCo currently uses the Puerto Rican Formula which is a system which is used to calculate the cane per sugar ratio and also determines that private farmers are paid 70 percent of the net profits of sugar sales.

Farmers have asserted that this does not work for them but against them, according to Subnauth. He said that the high TC/TS is crippling small private farmers. He explained that he himself used to grow cane but even prior to the Skeldon factory it was no longer feasible for him to farm his 50 acres at a profit.

Subnauth told Stabroek News that the current global prices for sugar, which sit at around US$0.16 per pound, impact the prices that farmers receive from GuySuCo and that to remain competitive it is nearly impossible. He said that there is land for expansion but that private cane farming is not seen as feasible because of the problems blocking the Skeldon factory from grinding anywhere near the promised 350 tonnes of cane per hour. It should be noted that while the factory promised this figure from 2008, it was never able to do so which has many including factory workers stating that Skeldon never had this capability from the inception. Remedial works have since seen a declaration that its capacity is now 250 tonnes per hour but even this figure is not being met.

Subnauth called for drastic changes to the industry including small scale privatization and cooperatives. He said that the cane farmers are attached to Skeldon and with this heavy reliance on a factory that is fraught with technical problems the farmers are on the losing end.

GuySuCo’s Manager for Agricultural Services, Raymond Sangster on Thursday stated that farmers are paid based on tonnage of sugar produced by the factory and not by the canes supplied. GuySuCo’s concern lies in the reality that paying for poor canes could be even more detrimental.

Sangster was at the time speaking at a meeting of the Economic Services Committee of Parliament before which GuySuCo was called. Member of the Committee and PPP/C MP Manzoor Nadir stated that while farmers are being paid based on sugar produced the payment may not be based on the actual sucrose content of their cane but in fact on the poor technical capacity of the factory which farmers should not be punished for.

Chairman of the Com-mittee, Carl Greenidge noted that there were challenges on both sides when the GuySuCo Chief Executive Officer, Rajendra Singh stated that the corporation was providing other services to the private cane farmers. Greenidge pressed Singh on what these various services were.

Meanwhile, the UCCCI issued a statement on July 14 stating that the government had to intervene and find solutions for the beleaguered Skeldon factory whose poor performance continues to the dismay of farmers.

The government has tried to play down the problems of the Chinese-built US$110 million factory which was intended to be the saviour of the industry but which has been riddled with problems since its launch in 2008.

The Chamber said that at a meeting recently held between UCCCI and Skeldon cane farmers it was reported that GuySuCo’s Skeldon factory is taking an average of 20-25 tonnes of cane to make one tonne of sugar. It said farmers had been promised that the new factory would be using an average of eight to 10 tonnes of cane to make a tonne of sugar.

The release said that as a result of this, farmers’ liability to the banks and to GuySuCo keeps increasing crop after crop.

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