The sugar industry will not recover with this board and managers

Dear Editor,

I refer to the article captioned ‘GuySuCo bringing Indian experts to rescue corporation.’

Stupidity is in full bloom at this corporation which does not account to the public and especially not to the opposition which has no representation on the board. We saw a 2013-2017 plan which told us that in those five years the industry would magically improve from 218,141 tonnes in 2012 to 350,000 tons in 2017 ‒ an improvement of 62.3%. If we take this 62.3% and divide it over the five years of this plan it would mean an improvement of 12.46% per year. So according to this new plan which had stated at the very beginning that it is “based on the initiatives put forth in the original Strategic Blueprint and new initiatives put forward by Estates’ and other Key Management personnel” in 2013 we should have seen an improvement of 12.46%, ie, 245,626 tonnes. We now know that GuySuCo will not make 200,000 tonnes this year, ie, before the ink was dry on this new plan it was obsolete, as have been all the other plans of this corporation since 1992.

Now remember that we have a new chairman/CEO whose qualifications are woefully inadequate for this job, and it was he as chairman and CEO who put forward this disastrous plan. We pay this man a huge salary, not because he understands the Guyana Sugar Corporation but because he is a mobiliser for the PPP in New York and New Jersey. He does not even live here and has to be brought in whenever he needs to attend the board meetings at the corporation’s expense. We were told that he lives here now, but evidence of this has not been provided.

Mr Raj Singh has had his pitch and he was found wanting, so what does the PPP government do? Do they fire him? Do they take action against the incompetent board of the corporation which clearly doesn’t know what it is doing and only makes promises, in between running to the Parliament for more and more money to bail them out of the quagmire they find themselves in?  No we don’t! First we bring in a South African company Bosch Engineering to fix the Skeldon problems for US$4M. We are not completely certain what they did, but we paid them to be here for two weeks according to KN; then they hired a Tate and Lyle official to manage Skeldon. He spent 9 months here, accomplished nothing, and we have information that he has since resigned. At least one person in the industry is showing some sense. I would get out too. We would like to know what Bosch Engineering did for the US$4M we paid them. We would like to know what Tate and Lyle’s consultants were paid and what they were to do, and we would like to know why Richard Orr, the Tate and Lyle manager of Skeldon resigned.

The opposition has no alternative now, to protect the workers of the industry from the incompetence of the PPP, they must demand representation on the board or no $4B new subvention to the industry which the PPP is currently seeking from parliament to bolster the numerous problems plaguing this industry.

The latest symptom of being totally lost at sea is that having brought in Tate and Lyle and Bosch apparently to no effect, we are now bringing in Indian specialists to tell us what is wrong with our industry. The 2013-17 plan is deficient in many areas and does not address the major areas of concern which have contributed to GuySuCo’s biggest problem, which according to Messrs Bhim and Komal Chand is that “there are no canes in the fields.”  The plan begins by telling us that stakeholders and shareholders were consulted to make inputs to the plan; the management, the workers and the board of GuySuCo were consulted, but nowhere did I see that the opposition were considered or consulted either as a stakeholders or as shareholders.

The PPP are maintaining the sugar industry simply to employ the sugar workers who are now migrating away from the sugar estates; the government’s own housing policy in an effort to change the demographics of the country has removed workers from the sugar belt. To now ask us taxpayers to subsidise an industry which is in fatal decline on nostalgic grounds, simply because it once was the main industry in the country, is illogical; there are very viable alternatives to sugar which have not been explored in any significant way, which can still be implemented and offer meaningful employment to the few sugar workers now working in the industry. GuySuCo needs to establish a vibrant and committed other crops/aquaculture division to resolve some of the issues facing the industry through diversification.

The genesis of this problem is that without understanding the consequences GuySuCo has embarked on a process of levelling the cambered beds which I believe is the main reason why there are “no canes in the fields.” The 2013-17 plan seeks to continue and even accelerate that process, which is doing the same wrong thing over and over again, hoping for a different result.  I am contending that until they are assured that they have the manpower, the expertise and the conditions to mechanise the industry properly, that all conversion cease immediately. Rather than being the mainstay of their “plan” it should be halted and hand labour be used to cut as much of the cane as it can today, and use machines wherever possible to supplement harvesting until we get it right. What canes cannot be reaped by the combined efforts mechanical and hand labour which the industry has at present, should be brought out of cultivation (there has been some talk of flood fallowing) and some form of diversification introduced. We are planting at a rate which completely overlooks the fact that we cannot reap it if there is proper yield! A stupidity in itself.

Editor, the conversions of the cambered bed layout are contributing to the declining yields, since they entail pushing all the top soil into the inter-bed drains, thereby exposing the toxic subsoil on the top of the beds. Even if they do convert all the lands to mechanical harvesting, since the country sits in an extremely high rainfall zone, mechanical harvesting and loading will be expensive, onerous, unreliable, uncoordinated and dirty (a lot of mud). Combines which are supposed to reap 100 tonnes an hour only reap a maximum of 150-200 tonnes at best a day here! We therefore cannot continue down this disastrous path of converting even more lands without evaluating the results obtained so far and undoing the damage already done, if possible.

In 2012, according to the Bureau of Statistics, gold was at No 1 earning US$716,939,000 in foreign earnings; rice was at No 2 earning US$196,226,000; at No 3 bauxite earned US$150,781,000; and sugar was No 4 earning US$132,147,000 (source: Bureau of Statistics). The wages paid to the bauxite workers are a fraction of what GuySuCo pays to its workers, but bauxite is bringing in more foreign earnings a year ‒ US$151M when GuySuCo is only bringing in US$132M a year. In 2012 gold earned us more than half of the country’s GDP ‒ 51.4 %. It’s where all of the cane-cutters are now working; the only reason why an alleged 16,000 people remain on the coastal plain in the cane fields is because they are afraid of malaria. The GGMC tells us that there are 8,000 dredges working in the interior today and if we allocate (a low) 7 persons per dredge this means that the gold industry is now by far our largest employer with around 56,000 people.

We have been unable to mechanise the sugar industry owing to our unfavourable climatic and soil conditions, even though we knew since the 1980s that we had to mechanise or perish, since the labour costs of production were rising alarmingly and we were in competition with countries which had almost completely mechanised their field practices and who therefore had a much lower cost of production.

The sugar industry’s current wage bill is $19B for its alleged 16,000 workers in 2012. The current price for sugar is US17.77 cents a pound or G$35.54 a pound, ie, G$71,080 per tonne. The labour cost to produce 218,000 tonnes (2012 production) was $19B, ie, $87,155 per tonne, so we are losing $16,705 on every tonne we produce in labour costs alone. This means that we have to sit down as a nation and discuss if these figures make sense, and whether the sugar industry can exist without remaining a national liability forever. Diversification is necessary, and a phasing out of this expensive labour intensive industry for one which is less labour intensive and with better economic returns must be found. We can’t keep asking taxpayers who are earning between $400,000-$700,000 a year to subsidise an industry which is paying out $19B to a workforce of 16,000, resulting in an average annual income of $1,188,500; it’s unfair and should be examined more closely by the opposition.  But there are alternatives which can keep the sugar workers employed in a far less strenuous occupation; we just lack the will, the knowledge or the energy to pursue them. And most incredibly in the period 2008-12 against all norms of economics and business we made the biggest loss in the industry; in 2011 we lost $13.802B when we made the biggest production of 236,505 tonnes!

As for the economics of mechanization, quite apart from the very expensive cost and inherently damaging consequences of conversion of the land, we have to determine if it is even remotely feasible or not.  Currently the industry has only a ridiculously low total of 10 mechanical harvesters and the yield of cane after converting the lands for mechanical harvesting is very poor, since in the process they have exposed the acid and toxic sub soils and are leaving a soft area where the old drains used to be in which the harvesters keep sinking and have to be pulled out. A mechanical harvester costs US$375,000, ie, $75M.

Having already converted most of the cambered beds in the industry with disastrous results to our yield of cane, this new plan seeks to rush into more conversions without the money or the equipment to do either, ie, to convert from the cambered bed layout to the layout necessary for mechanical harvesting, and to actually harvest it mechanically. Even if we mechanise the roughly 50% of the sugar industry currently converted estate by estate and reap the rest by hand we would need to pay attention to the following: we will be reaping an average of around 4,287,500 tons of cane per year by 2017 (350,000 tonnes sugar x12.25 TCTS). It is impossible and unrealistic to project an improvement from less than 200,000 tons in 2013, to 350,000 tonnes by 2017.  This is more than 75 per cent improvement in 4 years, so here again the GuySuCo 2013-17 turnaround plan was obsolete before the ink was dry on it.

But if by some miracle we do manage to grow 4,287,500 tonnes of cane per year by 2017, if we can reap half of this by hand we still have to reap the other half of 2,143,750 tons by machine. In order to reap 2.1 million tons of cane per year with a cropping period of 36 weeks we would have to reap 9161 tonnes a day by machine and there would have to be totally dry conditions throughout the entire cropping period, since experience at Skeldon has demonstrated that even three quarters of an inch of rainfall in one day could interrupt mechanical harvesting by as much as three days. But if we are lucky and no rain falls we would need 47 harvesters @ $75M each ‒ a total of 3.5 billion dollars. Where are the operators, the operational coordination personnel, the 94 dumper trailers (two per harvester) to take the cane from the harvesters to the punts, and where is the complete chain of mechanical necessities including administrative and technical skills to do this operation coming from?

We are decades away from an efficient and economical method of mechanical harvesting, so again I have to ask the question where are the money, the administration, the skills and the equipment coming from? Certainly not from a bunch of people totally unprepared to cope with all of these technicalities who are sitting in head office, most of them not ever having seen a canefield, who are blundering along whilst the industry perishes, because they will never be capable of grasping the fact that they are dealing with one of the most, if not the most hostile situations to the mechanical harvesting of cane on the planet, ie, low-lying, poorly-drained, heavy clays and high rainfall.

And now that we have a mechanically friendly field layout in over 50% of our cultivation, have we, for example, begun mechanically applying fertilizer, doing inter-row tillage and stubble shaving of the ratoons to enhance our yields? The answer is no! Have we even considered that our current planting regime may not be conducive to mechanical harvesting since the rows of cane are being planted too close together to allow the tracks of the mechanical harvesters to ‘walk’ in between the rows comfortably to harvest the canes? No we have not! We have to prepare and plan from now to plant our fields to be harvester friendly, and to introduce mechanical operations to offset some of the damage done by the conversion and the shortage of labour. One is forced to ask who is in charge of this madness?

The policy of the corporation for the past 30 years has been to replant after the 4th ratoon, ie, a replant programme of 20% per annum. The plan tells us that we have never achieved this, but it says that in the next 4 years we will achieve it but we are not told how.

In any event according to this same plan the industry has been achieving around 16-17% per annum replant instead of the policy 20%. They are asking us to believe that the 3-4% of the entire industry’s cultivation which is older than 4th ratoons is accounting for the precipitous decline in production of nearly 40 per cent.

The corporation tells us that they are conducting training programmes, but they complain in the same plan that the managerial and supervisory staff are poorly trained.

They are leasing land at Uitvlugt to farmers but at numerous estates they are seeing a falling off in cane farming.

There is quite a bit more, Editor, but the conclusion is clear, the industry will not recover, not with this board, this chairman or these managers, and I don’t care who they bring, it will continue to fail.

 

Yours faithfully,

Tony Vieira

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