Dear Editor,
On numerous occasions in the past I have been forced to write on our sugar industry’s difficulties. Recently we have seen a totally new set of sugar ‘experts’ writing under various noms de plume, but I can easily see that it is probably one person since the views and the concepts are the same. Today I am responding as Tony Vieira and not Anthony Vieira, director of GuySuCo.
The views I will express in this letter are no different from the views I had expressed over the past 14 years when other commentators gave opinions with which I did not agree, even those who are friends of mine like Raymond ‘Rambo’ Gaskin, who I know exist. Today I wish to offer a response to Khemraj Tulsie who wrote a long letter in the SN of Jan16 captioned ‘A sugar industry model should show a central entity…’
I would like to explain for the benefit of Mr Tulsie, if he exists, that his understanding of the sugar industry is not complete. I don’t mind saying that he appears to be knowledgeable, but to one who understands the industry, such as myself, his presentation falls short of being complete in quite a few major areas, since it bears no resemblance to the facts. There is only one set of facts, Editor, which happens, as always, to be what is true; everyone is entitled to their own opinion, but they are not entitled to their own facts.
I am not going to deal with Mr Tulsie’s concept of privatization and in fact I don’t know why this has been given centre stage since the release of the CoI report, but as a stated policy I have not seen anywhere that this coalition government has said categorically that the industry is to be privatized within 3 years.
After his introductory remarks Mr Tulsie suggests that the farmers, especially in West Demerara and the Corentyne, are making profit. This is actually only 50% true, since the farmers in the Corentyne owe commercial banks and GuySuCo three and a half billion dollars, but Mr Tulsie tells us that any restructuring must include an expansion of cane farming who clearly in his opinion are better growers of sugar cane than GuySuCo. He then lays out his 10 point plan.
Points 1-3 in view of GuySuCo’s current financial situation are not worth the paper they are written on. If the corporation is so cash strapped at this time that it cannot even buy fertilizer on time, where will it get the money to perform the miracles Mr Tulsie suggests?
No 4 calls for the provision of technical services to farmers, such as in the areas of soil, water and tissue analysis, and crop extension education with the particular transfer of best practice.
No 5 is developing and leasing to private farmers lands that are suitable for sugar cane farming.
No 6 calls for the development and maintenance of agricultural infrastructure which can enable timely and efficient drainage, irrigation, cane transport, and access to all parts of sugar cane cultivation including farming areas; agricultural research and development, particularly the breeding of new, more productive and resilient varieties and the introduction of enhanced mechanized operations. This looks great on paper but the poor condition which the PPP government has left this industry in today will not allow any expenditure on developmental projects, since the industry is bankrupt and cannot even carry its routine expenditure.
No 7 is a suggestion to expand the sugar products for better value added products, but he does not offer any hint at what these could be which are not being done now.
No 8 calls for the leasing of agricultural machinery and equipment to sugar cane farmers, more particularly to facilitate new entrants to the industry, ie, leasing machinery which GuySuCo does not have.
No 9 calls for the procuring and re-selling of agricultural inputs to sugar cane farmers, particularly agrochemicals, pesticides, fertilizers, ameliorants, etc. He concedes that it’s being done now, but he wants it be expanded.
So five of the 10 suggestions are based on GuySuCo making inputs which would make it more profitable for the farmers, whilst putting a heavier financial load on itself and the state. The other 5 are just words requiring finances which the corporation just does not have and mean nothing. No one has ever accused me of not being sympathetic to the farmers, in fact I was the only one asking that the farmers’ share of the European Development Funds should be given them, which Robert Persaud and the PPP refused to do; this was a travesty which should have been rectified.
But what are the facts and the truth? Do the cane farmers have their own workforce? Can they carry the GuySuCo workforce? The answer is no.
For decades the estates have had a system in place for offering their workers holidays with pay, production bonuses, free medical benefits at the estate dispensaries for their entire family, a guarantee of 4 days out of crop work whether it was available or not, and paying their NIS. There was also a pension scheme, Sugar Industry Welfare Fund assistance to build their houses which most sugar workers have benefited from for decades, etc. To obtain these benefits all the workers had to do was to work 80% of the days available to them and they would qualify. These are the benefits which have contributed to GuySuCo being unprofitable now, in addition to the unsustainable wage increases given without understanding the consequences under the PPP government. This is the main cause of GuySuCo’s imminent demise, culminating in the probability that the sugar workers may not have much of a future. I will not even go into the fact that for nearly 4 decades, GuySuCo has contributed (when it could afford to) massive sums of money to the state through the onerous sugar levy and the local subsidy of sugar. Farmers could never afford to offer any of these benefits to their workers, but why should they? GuySuCo is already providing these to its workers.
The fact is that when the estate worker works 80% of the days available to him and qualifies for the benefits, to avoid paying taxes, he then turns out to the cane farmers’ plots and works as a contractor, and at the end of the day the contract ends as a cash transaction and the farmer has no further economic commitment to the cane cutters or other workers. The employment cost to GuySuCo, which is crushing the industry, does not apply to farmers. For example in 2016 GuySuCo will have the following budget: total expenditure $36 billion, of which total labour costs are $21.8 billion; the corporation expects that in 2016 the industry will earn a little over $20 billion in sales of sugar and molasses to all markets. In other words, Editor, the cost of labour alone is higher than the sale of all sugar to all markets in 2016, and everything else, ie, all other costs, all crop expenses, maintenance of all field and factory equipment, administration buildings, fertilizer, insecticides, etc, and maintenance and renovation of bridges, kokers, canals, intakes, etc, are losses.
In the meantime the estates maintain the dispensaries, the community centres, absorb the cost of draining all villages in their extra nuclear areas, and subsidizing a barrage of social amenities for the communities contiguous to the sugar estate, which are too numerous to mention here.
Any analysis of the sugar industry which does not reflect these facts is unsound and mischievous and should be treated with the contempt it deserves. Any analysis which overlooks the fact that the corporation is in dire financial straits, and suggests that there must be more spending when in fact it cannot maintain its bread and butter corporate expenditures now, is not helpful, especially when such recommendations are in fact just words and contain no suggestions of real significance as to a way out of this dilemma. This is particularly so when it displays a totally skewed understanding of the labour problems and costs of the industry and the place the farmers occupy in its hierarchy. No one is concentrating on the havoc which the PPP government visited on this industry in the form of mismanagement, incompetence and corruption, and it is time that they did.
Yours faithfully,
Tony Vieira
