I was invited to be part of a discussion on sugar on Monday evening. The discussion while general, would have as its point of reference the sugar industry in Guatemala which formed part of a supplement on that country published in Sunday’s edition of the Miami Herald newspaper.
I thought I should pen this letter as evidence – contrary to the belief in some quarters – that sugar is not dead and that the sugar industry in Guyana could be profitably maintained with privatization in whole or in parts. The Guatemalan model of sustainable productivity employed by its privately owned 11 sugar producers which operate with absolutely no government support is indisputable testimony that with the right combination of innovation, diversification, market research, sales promotion and social programmes for its workers and communities, Guyana’s sugar industry can once again be viable.
The sugar industry in Guyana is in its current position because of the politics to which the industry has been subjected, especially since 1998. With a privatized sugar industry political influence would be diminished, and the workers would allow themselves to be politically manipulated at their own peril. The success of Guatemala’s private producers is credited to a well-trained and responsible workforce, high-end technology and well-thought out value added and diversification.
According to Herbert Gonzalez, current president of the Sugar Producers’ Association of Guatemala, “Guatemalan producers have invested inbeing competitive in the international market. One of the main challenges the industry faces is the price factor: they know how much it costs to produce sugar, but they don’t know the price at which sugar is going to be sold. The key then is to deliver value added sugars to buyers”. The production of by-products such as bagasse and ethanol, among others, is also critical.
Today, Guatemala is the largest sugar producer in Central America, the second largest exporter in Latin America and the fourth largest net exporter in the world in 2015. The industry employs over 77,000 people, five per cent of the country’s formal workforce that is credited with a high level of productivity. “The industry’s efforts to be environmentally and socially sustainable include a daily schedule of nutrition and hydration plans for cane-cutters that have been carefully developed to protect their health and wellbeing and which have helped to strengthen not only the skills of employees but also their families and local communities,” according to Gonzalez.
The private producers in Guatemala have collectively put in place their own infrastructure including their own port terminal which is today a global leader in port loading efficiency; a shipment of 30,000 metric tons is loaded in 18 hours.
While conditions in Guyana are not entirely similar to Guatemala, it is clear that with privatization and subsequent de-politicization of Guyana’s sugar industry through the emergence of a smart and enlightened workforce, coupled with visionary, professional and efficient management and a carefully designed diversification programme that should include a sugar refinery, our sugar industry can not only survive, but prosper.
As Guyana seeks to privatize its sugar industry it must ensure that the potential investors bring with them the commitment to invest not only in equipment and machinery but in the country’s efforts to address social inequality. New owners (if the industry is broken up into several companies as a result of privatization) must also be prepared to work together to develop facilities which they can share and even perhaps embark on joint research, as in the case in Guatemala where research has led to sugar for the local market being fortified with Vitamin A for the prevention of childhood blindness.
There are some reputable companies with the capital, experience, corporate good conscience and access to markets which have an interest in looking into investing in the sugar industry in Guyana. They are not rushing to come to Guyana, but with the right approach on government’s part (and right approach does not mean giving away the assets of the industry) and responsible behaviour on the part of the political opposition and the unions, would invest their time and money to further examine the feasibility of investing. Of course there also local business owners who are interested in investing as well; they should be held to the same standards so as to ensure the sustained viability of the industry, should they become its owners.