The sugar industry is in free fall

Dear Editor,

I have a few comments in relation to the allegations by the unions that there are not enough canes in the fields of GuySuCo to offset the disaster which was the first crop. The Guyana Sugar Corporation came into being when the then Bookers sugar estates were nationalised and added to the previously nationalised Sandbach estates of Diamond and Leonora in May 1976. Since that time we have never had a first crop with such a low production representing less than 48,000 tonnes of sugar, that was also significantly less than the crop’s initial target of 71,000 tonnes.

In a Stabroek News article of June 3rd, 2013 captioned ‘GuySuCo not tackling poor cane quality’ Mr Komal Chand tells us that from the feedback of the workers of the industry (that’s clearly where he gets his information on how much cane is in the fields) there is not sufficient cane for the corporation to meet its local and overseas market obligations of 148,000 tons in 2013, much less the 170,000 tons required to meet this year’s annual production target.

In view of the ridiculously low 48,000 tons achieved in the first crop of 2013, it is clear this industry has been in free fall since 2004 when we produced 325,433 tonnes compared to 2012 when we produced 218,141 tonnes. The only significant thing in terms of management which has happened during that time, as far as I can tell, was that Robert Persaud fired Booker Tate as our managers, and put an incompetent set of people to manage the corporation. I am still asking myself why Mr Errol Hanoman, a very competent former Finance Director of the corporation resigned from this job as CEO after only about year in office!

As result of GuySuCo’s dismal performance Mr Ramjattan, Mr Roopnaraine, Mr Earl John and numerous other people, including myself, have asked for some sort of public enquiry to be conducted into the industry to expose where the problems of the corporation lie, since it is clear for all to see that it is going down the drain at supersonic speed.

Recently the total contempt which this government has for the public was demonstrated when the new Minister of Agriculture, Dr Leslie Ramsammy, told us in the Chronicle of the 14th May, 2013, “that the corporation was deliberately curtailing this year’s first crop in an effort to achieve, in the next crop, a better yield from canes which had not ideally matured!”

I was born into the sugar industry and performed as a Bookers and then a GuySuCo manager with substantial field experience beginning in 1966, and I have never heard such nonsense. From the time sugar cane was first brought to the Caribbean and Brazil the canes grown in Guyana and in other parts of the world were bred to mature in one year, so this not maturing nonsense referred to by the Minister is not clear to me, and someone should ask him in Parliament what it means. But in case he can’t answer, I will tell you what my field sources told me: GuySuCo was so short of cane in the first crop of 2013 that they started bringing forward canes scheduled to be reaped in the second crop. This means that the corporation was reaping the canes from the second crop of 2013 at approximately 6 months old. My father, probably the greatest Guyanese sugar cane planter in our history had a name for this act of reaping the cane at 6 months instead of 12 months ‒ he called it rape! Dr Ramsammy therefore insulted our intelligence by telling us that he is waiting for the canes to be ideally matured!

To confirm that an enquiry is essential and that the corporation is in confused and incapable hands we have to look more closely at the Stabroek News article of June 3rd; we are doing this not to see what Mr Chand is saying, but to see the responses of  CEO Bhim to Mr Chand’s accusations.

Mr Bhim’s first response to Mr Chand’s challenge is unbelievable when he was reported as saying that currently the corporation was conducting cane estimates for all seven estates. The report went on to say, “He noted that going into the second crop of the year, GuySuCo had to ensure that enough cane was planted to produce the yield necessary to make the original second crop target of 170,000 tonnes.”  Editor this is the CEO of our biggest industry telling us in June 2013 that he has yet to see if enough cane was planted to produce the yield necessary to make the original second crop target of 170,000 tonnes! He should have known this before he made his corporation estimates at the beginning of this year when the Finance Minister gave the projections in Parliament, not now, a few weeks before the start of the second crop when he is saying that he still doesn’t know how much cane was planted in the 2012 second crop, and how much cane he will have available for reaping in 2013. Any private company would have fired this man immediately. But the nonsense does not end there: he goes on to say, “We are not looking at importing sugar as yet because the second crop needs to be finished… but we have had to import sugar in the past.”  This SN report as said above appeared on June 3rd. Do you mean to tell me, Editor, that the CEO of the corporation in June does not know how his 2nd crop will do? But he projects that it will start earlier than usual in the third week of June, in the rain, and that he has to wait for the crop to finish before he decides if it will be necessary to import sugar for the local market or not?

Has it escaped everyone’s notice that the two packaging plants at Enmore and Blairmont, which like the Skeldon project were predicted by the PPP to boost the earnings of the industry, are not in operation since there is no sugar to be refined for bagging, and that we are only producing bulk sugar? Now remember that when we took the people’s money to build the second packaging plant at Enmore for US$12.5 million, we already had the Demerara Gold packaging plant at Blairmont, which in over 10 years of operation has never delivered on the promises we got from the corporation. Why then, one could legitimately ask, did we build a second one at Enmore?
Whilst Mr Chand is saying that there is no cane in the fields the CEO is saying “we have to look at the fields…the estimates need to be done before we go ahead or make any judgments and assumptions.” I repeat this is June, the crop will start in two weeks and he is saying that he doesn’t know what’s in his fields? Is that any way to run an industry, especially one as important as this one is to this nation?

In the Chronicle of 14th May 2013, the CEO had this to say: “A target has not yet been set for the second crop.” This is the CEO of a major national corporation who is telling us four weeks before our sugar industry is about to start the second crop for the year that he has no idea what sugar he will make from it! Words to describe this fail me, and even if I used the words I have in mind the Editor would not print them.

Editor, all of this is very wrong. At the beginning of the year the estates give their estimated levels of production to the head office which then makes a budget for the industry, and so from the 1st of January of that year work commences based on the level of income the corporation expects to collect from its production, ie it will be a significant factor in how much money will be allocated on capital and routine works, and if it looks like being a good year more will be allowed to be spent than if it looks like being a bad year. It is on this basis that each estate and the industry as a whole conduct their budgeting of how much to spend. Now if you say that you will be producing 71,000 tons in the first crop and 170,000 tons in the second crop of 2013, a total of 240,000 tons, it is on that level of production which the budgeted expenditure will be based. You can’t come in October or November and tell us (the people who own this corporation) that you spent too much according to a flawed estimate of producing 240,000 tons, but you only made 214,00 tones; it is a completely unacceptable situation and will bankrupt you and this nation in no time. This has happened year after year since the PPP got into power in 1992; it is these highly unrealistic and misleading industry estimates which are revised from month to month after the money has already been spent that is the real danger of this frequent revision of the budgeted production and it shows very poor management.

Finally I come to the last straw, and to examine it in all of its glory we have to look at the last annual report we have seen from GuySuCo in 2009 where we see the following: “There was an improvement in the corporation’s financial performance, in 2009 the corporation made an operating loss, after taxes, of 1.9 billion dollars compared to an operating loss after taxes of $6.2 billion in 2008”! This, the CEO of the corporation is telling us in the 2009 annual report, was caused by increased and improved financial management (sic).

Editor this a very mysterious situation, and I want to clarify it, so let me put it this way: In 2009 the corporation produced 233,736 tonnes of sugar compared to 226,267 tonnes in 2008, but with only an extra 7469 tonnes of sugar produced in 2009, the industry made a loss of $4.3 billion less than in 2008.

At this point we have to leave this matter until the commission of enquiry is set up, since it is impossible to explain this nonsense. The only question we could possibly have at this time is to ask where did this $4.3 billion go in 2008?

Yours faithfully,
Tony Vieira

Around the Web

Comments