Dear Editor,
Professor Clive Thomas in his column titled ‘GuySuCo’s under-performance: The explosion of costs’ published in the March 16, 2014 Sunday Stabroek, among other things, spoke to the high employment costs in the sugar industry.
Naturally, in any company in which labour costs absorb in excess of 60 per cent of revenue, concern and alarm ought to be expressed. It is well-known that the last few years have been among the most challenging in GuySuCo’s 38-year history. Many factors, including poor management, have influenced low levels of production in recent times and, therefore, serve to diminish revenue levels.
Any discussion of the sugar industry’s employment cost, however, has to be placed within some context. The multi-billion dollar employment expenditure while absorbing a large proportion of GuySuCo’s revenue at this time, must be juxtaposed against the low and below capacity production being recorded as well.
Without a doubt, the industry has the capability of producing, at this time, in excess of 300,000 tonnes sugar taking into consideration its field and factory capacities. Such levels were realized in the not-too-distant past and certainly with dedicated effort higher production levels are achievable within a short time-frame. Higher production obviously will lend to the emergence of economies of scale and, therefore, the cost of production will decline and logically will see employment cost as a percentage of revenues declining.
Low revenues have also eroded the industry’s ability to pay acceptable rates of pay.
Today, GuySuCo has to contend with unfair competition for its workers from many quarters, including the construction and mining industries, among others. Although the playing field, in some instances, is not level as many employers do not comply with statutory deductions – NIS and PAYE – GuySuCo, unless it is able to offer competitive pay rates notwithstanding its grandiose plans and initiatives would not be able to maintain a reliable and adequate workforce. We have seen especially in the area of cane-cutting there is a lack of adequate labourers.
The industry to this day remains largely labour intensive and hence the present labour costs. Certainly, higher production levels will lend to a proportional decline of employment costs and make available additional monies for various activities. However, such achievements rest on the ability of the corporation to grow an adequate quantity of good quality canes to yield satisfactory production levels.
Yours faithfully,
Walter Sundar
