With the year almost at an end, hundreds of Wales estate workers remain in limbo and Minister of Agriculture, Noel Holder yesterday said that sugar is no longer viable and that GuySuCo does not see a way to make the Skeldon estate profitable.
He told the media at an end-of-year press conference that the issues of the Wales estate need a lot of discussion and that it would be brought up at a special meeting tomorrow morning that would include selected ministers and some members of the opposition People’s Progressive Party/Civic and the sugar unions: Guyana Agricultural and General Workers’ Union and NAACIE.
Since announcing the closure of sugar operations at Wales in January this year, GuySuCo and Holder’s Ministry have had a year to come up with concrete plans but these are still being awaited.
He confirmed that there have been some expressions of interest with regards to the purchasing of the estate or GuySuCo in general but pointed out that the government has not taken a decision as yet.
According to him, there has been no formal approach with regards to the purchase but said “we have been hearing things through middle people and I wouldn’t want to get into hearsay…”
The crop has ended at the Wales estate which is going out of operation and almost 100 workers from the tillage gang have accepted severance pay.
Some have opted to work at the Uitvlugt estate while GuySuCo is currently in discussions with the others about their future. All of the cane harvesters have been offered jobs at Uitvlugt.
At the press conference, GuySuCo’s Finance Director, Paul Bhim in response to a question about the notice for the closure of Wales, said that the crop had been extended to December 16.
He said the workers would have to receive a week’s pay and only then they would be given the one month’s notice.
Asked what would happen to the workers after January 1, Bhim said that although the operations have ended, the factory along with equipment still has to be cleaned “because if they are going to be transferred elsewhere, they have to be in pretty good condition.”
This would be undertaken by some of the workers. He said that about 1000 workers, including senior staff would be displaced.
Some have also been employed for the preparation of land at Wales for rice cultivation that is slated to commence in March.
Bhim also told the media that the tender for the road project from Wales to Uitvlugt to facilitate the private cane farmers to transport their cane, had been “open some time back” and has gone past the first stage and is awaiting final approval.
With regards to the closure or diversification of the other estates, the minister said the cabinet would have to make a decision with regard to the way forward.
He said they have had proposals and he hopes that that would be discussed with the opposition when they meet tomorrow.
Holder stated: “Over the past years not much was done by way of securing the future of both the industry and the future wellbeing of its employees… Opportunities existed in the past to reorganize and modernize the industry but these were not pursued.”
According to him, “The current Government, in May 2015, inherited a sugar corporation and sugar industry that were badly run down. Indeed, the first approach by the then management of Guysuco was for support from Government amounting to G$16.9 billion, excluding capital investment, to finance the operations for 2015.”
He pointed out that the magnitude of the request came as a great shock to the government and after the appointment of the new Board of Directors and Interim Management Team, it started to appreciate the extent of the decline of the sugar industry.
He noted that the onset of the El Nino weather phenomenon had an impact on harvesting during the second crop of 2015 and resulted in a shortfall of 23,600 metric tonnes of sugar.
Additionally, he said, 2016 has been plagued by poor labour turnout, lack of spares, equipment shortages in particular cane punts, and factory breakdowns.
Underinvestment
The shortage of “skills and experience together with the serious underinvestment in the industry are taking their toll.”
The second crop for 2016 started late due to wet conditions and GuySuCo was unable to harvest all its canes before the end of the year.
An estimated 153,300 tonnes of cane, which is equivalent to some 11,300 tonnes sugar would be carried over into 2017.
Holder said the arid El Nino weather has resulted in a drop in world production of sugar over the previous season of over 13 million tonnes.
Between July 2015 and December 2016 government would have provided GuySuCo with G$23B in support.
GuySuCo has advised that should the industry remain as presently structured, it would require subsidies from the Government in the sum of G$ 18.6B and G$21.4B for the years 2017 and 2018, respectively.
“Where is this money to come from without causing serious dislocation to other sectors of the economy which are also in great need of investment,” Holder questioned.
“What is even of greater concern to the government is that this magnitude of subsidy would have no positive impact on the financial state of GuySuCo.”
He said that because of the “prevailing sugar prices and GuySuCo’s cost structure, the corporation would continue to lose billions of dollars each year and would continue to require billions of dollars in subsidy also each year, despite significant increases in production. The economy simply cannot afford this.”
He said too that “government is deeply concerned about the future wellbeing of the sugar workers and their families… [and] the state of the other sectors of the economy and the critical need for investment in these sectors.”
Meanwhile, the minister mentioned that the work of the ministry during the last year, has been a challenging yet rewarding one.
There were challenges to maintain the rice and sugar production, address the drainage woes, while ensuring that Guyana taps into regional and international markets.
He said “agriculture remains a priority area for addressing problems of unemployment, poverty alleviation and for fostering economic development.”
He added: “Significantly, the country is focusing primarily on sustainable food security, increasing productivity, expanding commercial agriculture, import substitution, income diversification and export orientation.”
According to him: “In 2017, we will continue production transformation through agricultural diversification; improvements in drainage and irrigation systems; improvements in research, extension education and marketing; strengthening our regulatory framework governing fisheries, chemical and ground water management. Hinterland development with large-scale agriculture in both the Rupununi and Intermediate Savannahs will also be advanced.”
