– Skeldon first on market
Government on Tuesday decided that the sugar industry is not sustainable and cannot be saved as is; it will soon roll out a plan for the ailing sector that includes keeping only three estates and privatizing the others, sources say.
At a Cabinet meeting on Tuesday, the sector was deeply discussed with data of GuySuCo’s performances over the last five years analyzed.
The dismal performance of the sector, large amounts in subsidies over the years and billions of dollars in pending requests this year were the focus of “intense discussions and decisions” at Cabinet, sources said.
One source said government highlighted an upcoming meeting with representatives from the Inter-American Development Bank (IDB) to discuss a proposal on the way forward for the sugar industry. “If a feasible, that is a viable, plan is not given to the IDB representatives, that can spell trouble for the borrowing capacity of this country,” the source explained.
“You have to take into context the IDB, because what can we tell them? We have been plugging billions into an industry that is not even breaking even… In January GuySuCo asked for $5 billion and that was given. Now by the end of March another $2 billion has been requested. Last year we were short $38 billion and if you looked at the budget, we had to take out $19 billion to give to the sugar industry. IDB’s lending contributions far outstrips everyone we borrow from and if you can’t satisfy (them) that proposals are viable, how you can ask (them) to furnish additional loans?” another source added.
At that meeting, scheduled to be held in the next two weeks, the APNU+AFC government will hand over a plan that includes diversification at some estates and the privatization of others but will give its long-term over-view for sugar in Guyana.
According to a source, Skeldon will be the first estate to be sold and government is currently looking at “the best deal possible” as it peruses proposals for a buy over from Brazilian and Indian companies among others. “Skeldon is out. That can’t stand at all so that is a definite sell,” a source stated. There are questions about what would become of the debt incurred by the Skeldon estate in any deal.
By the end of 2018, it is anticipated that other estates will be closed: Rose Hall and Enmore. The closure of Enmore would have a severe impact on the community.
Those the government will keep and for which it has development plans are Uitvlugt, Blairmont and Albion.
There is also a plan for some sugar workers to be given land to grow and harvest sugar cane.
One government source said that most Cabinet members were shocked when it was revealed that the average estate worker receives an average of $200,000 per month, which is four times the country’s minimum wage. Cabinet was also informed of manager’s salaries which range from $800,000 to over $1 million.
It is government’s view that the former PPP/Civic administration kept heavily subsidizing the sugar industry because of its longstanding political ties with that sector’s workers.
This week, former long-serving GuySuCo executive, Dr Ian McDonald urged that everything possible be done to save the sugar industry and called for focus on the market in Caricom and other options.
In his column in the Sunday Stabroek, McDonald cited four reasons for saving the industry, which he said carried a weight that was beyond simple profit and loss.
He pointed out that the industry provides direct employment for 16,000 people and therefore a livelihood for as many as 90,000 Guyanese.
He noted that the industry brings in considerable foreign exchange which is very hard to replace and it does so with an ever-renewable resource.
Furthermore, estate operations also generate spin-off economic, social and infrastructure activity without which whole communities would deteriorate into deprivation and disorder.
He added that much of rural Guyana was historically held together by the framework of the sugar industry and if this fabric was abruptly rent, the socio-political consequences would be grave and disruptive.
“Those who manage the economy and the nation should, at the very least, make sure they have a good idea of how these four contributions are to be achieved in a sugar-less economy and society before taking any action which will effectively kill off an industry which still can give the nation so much and which sustains the lives of tens of thousands of Guyanese,” McDonald admonished.
In recent months, concerns have grown that neither the government nor GuySuCo had a viable plan for restructuring the industry. Despite promises by both the Ministry of Agriculture and GuySuCo, workers of the Wales estate which ended sugar cultivation on December 31, last year are still to be told of options in their community. Many have rejected the proposal to travel on a daily basis to the Uitvlugt sugar estate to work.
Meanwhile, the PPP/Civic continues its call for the APNU+AFC coalition government to conduct a social impact assessment (SIA) of the shuttering of sugar estates, warning that any closure could cause displaced workers to organize major protest actions.
In January last year, government announced that it would end sugar cultivation at the Wales estate. Since then, the workers have staged many protests and candlelight vigils in an effort to get the government to keep the estate in operation. It ceased operations on the last day of the year.
The workers have also called repeatedly for President David Granger and Minister of Agriculture Noel Holder to visit the area and listen to their concerns.
