Skeldon fiction

At his press conference on Saturday, President Ramotar spoke optimistically about the sugar industry and lauded the performance of the beleaguered Skeldon factory. He noted that the 74,600-tonne first crop target for sugar had been exceeded by 5,300 tonnes. Skeldon’s target which had been set at 13,795 tonnes had been surpassed by 15 tonnes, he added. The President’s optimism was similar to that exuded by his Minister of Agriculture, Dr Ramsammy in an earlier release.

Were it the case that there was a genuine recovery in the sugar industry then all should undoubtedly be elated. The real truth is that sugar remains in dire straits as has been magisterially laid out in the current series on the state of the industry by Professor Clive Thomas in the Sunday Stabroek. President Ramotar, who spent many years on the board of GuySuCo prior to his ascending to the presidency is doing the country a disservice by making it seem as if there has been some turnaround. There hasn’t been.

One statistic would put the whole fiction to a rest. Upwards of US$110M was spent on the new Skeldon factory as part of a US$200M sugar modernization programme that was intended to secure the future of the industry. Instead today, the factory is a huge burden on the industry with no prospect in sight of meeting its intended production. The new Skeldon factory was meant to produce 117,000 tonnes of sugar per annum as part of a total output of 450,000 plus tonnes of sugar. Yet, what the President and the Minister have been expressing pride at is first crop production of a paltry 13, 810 tonnes of sugar at Skeldon. At this rate, its annual output will be around 40,000 tonnes of sugar, barely a third of what it had been projected to produce annually since 2009.

Further, the tonnage from Skeldon is being produced at an enormous cost because of its low production. Indeed, there were reports last week that the factory was labouring for days producing small amounts in a costly exercise to meet its target. This was no doubt meant to be the lynchpin of a propaganda campaign which is now underway to make it seem that Skeldon is performing reasonably well. It is not, despite what has been costly repairs and retrofitting by a South African company to what was a defective turnkey project compliments of its Chinese builder.

The industry on the whole was meant to have arrived by now at optimum production of 450,000-plus tonnes. It is far from this and it appears that there is no realistic plan to achieve such a target. Last year it came off its lowest annual production in 22 years of 186,000 tonnes and the projected output this year isn’t impressive.

The industry’s problems are manifold. Its financial health is disastrous. Deep losses have been suffered in recent years and billions have been sunk into it by the state in the last three years via subvention. It is a further drain on taxpayer resources that cries out for radical revamping to stem the haemorrhaging. It is the lack of this recognition by the policy makers that is deeply troubling.

Manpower problems continue to beset the industry. Labourers have migrated to other industries, gone away or simply died off. This has forced the industry into a renewed drive for more mechanized harvesting, a project fraught with difficulties. The state of GuySuCo’s sugar fields and its agricultural practices have attracted critical comment from many stakeholders including the main sugar union GAWU. Husbandry of the cane fields has been questionable and there has been downstream impact on sucrose content.

Opportunity days have been significantly reduced because of the now ill-defined weather seasons. While ironically this year’s first crop benefited from dry weather, heavy rain has been the bane of the industry over the last few years and there is no easy answer to this.

There is no doubt that the unconscionable and radical reforms of the European Union (EU) sugar regime aggravated the problems of the sugar industry and robbed it of much needed cash flow. Those reforms however had little to do with the disastrous Skeldon factory, substandard field maintenance and agronomic practices, poor production and the industry’s labour problems. This on the back of billions in EU funds for the industry which had been intended to solve these shortcomings.

At his press conference on Saturday, President Ramotar called for all Guyanese, including the media, to be more “supportive and objective” in their criticisms of GuySuCo. The call is appropriate but President Ramotar and his government must understand that there can be no sugar-coating of the deep problems faced by the industry. His government must present to the nation a realistic plan for pulling the industry back from the brink. The present disaster that faces the industry has arisen entirely under the PPP/C government and it must now be prepared to take courageous steps to retrieve the situation.

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