Earlier this year, in May, I wrote a column entitled ‘The miniaturisation of sugar’ which commented on the planned future of the sugar industry previously announced. I suggested questions which seemed to need answering.
Time elapses, circumstances alter and decision-makers change their minds. Fallible men know they can never, or should never, set plans in stone.
As the originally contemplated future approached in 2018, it would have been understandable, indeed expected, for a new plan, or at least a new timetable, to be announced. Instead a full-scale row has broken out about sticking to the original plan.
I am repeating my May column in the hope that it might help to obtain clarification of what future plans should take into account – and in the hope of answers being forthcoming to the questions asked last May which seem more relevant than ever.
I wrote the following in May:
“It is hard to claim that GuySuCo’s losses on the scale now obtaining – leading to the diversion of precious taxpayer’s revenue from education and health for instance – can be sustained much longer. (Unless, of course, “a sugar subsidy” is looked upon in the same light as other payments made by taxpayers for national protection, the security and well-being of communities and “social cohesion”).
“It is even harder for someone no longer qualified (17 years since I left GuySuCo) to second guess those currently in charge and suggest any alternative to the no doubt meticulously thought- out plan to change the current situation – a plan which has been through the mill – recommended by management, approved by the Board, endorsed by the Minister and agreed by Cabinet.
However, what I can perhaps do is suggest questions to which specific and detailed answers would surely be welcome before the further drastic and imminent dismantlement/reduction of the Guyana sugar industry takes place.
- Has a careful exercise been carried out to calculate the full value of all the ‘public-benefiting’ services the estates provide free or below cost – at least to put the losses in the right perspective?
- Has the history – especially the recent history – of unit costs per tonne of sugar (a crucial measure of economic success) been carried out – so that at least we can measure if and how far those estates left open currently lag behind operating at the level of profitable productivity? We are left wanting to know the extent of improvement planned for what remains of GuySuCo – the unit costs of production in relation to market price benchmarks and therefore profit/loss in the miniaturised industry.
- In all that is planned, has full attention been given to the key issue of all agriculture in Guyana – drainage – and the essential need for it to be controlled by a knowledgeable, disciplined, efficient organization for the good of all? This involves both inland drainage to release excess water coming down from the higher lands but also coordination with sea defences to prevent ingress of salt water. When you abandon and dismantle be careful what coordinated services you might disrupt.
- What, specifically, is to happen at Skeldon? The rationale of disposal or closure of what has long been regarded as the industry’s potentially best land area remains unclear. Is there a purchaser in prospect and what are that purchaser’s intentions? Will sugar production cease there in 2018? How many will be unemployed at Skeldon by 2018? How are they to be found work to do? What compensation are they to get?
- The plan is to produce 147,000 tonnes at Albion, Blairmont and Uitvlugt in 2018 (Zero sugar production assumed at Skeldon). What are the field and factory performance estimates? What proportion of the production will be bulk raw and what proportion packaged for direct consumption? Have prices at various levels been estimated for the designated markets: domestic (25,000 tonnes), Caricom (60,000 tonnes), US quota (12,500 tonnes) and World (50,000 tonnes)? What is estimated profit/loss? Why not more sugar sold to Caricom, our natural market, and less to the world?
- Are there any plans for divesting Albion, Blairmont, Uitvlugt? Who are the prospective private owners?
- What is the permanent loss of foreign exchange estimated to be?
- Does the reduced quantity of molasses – and where its availability will now be located – present any problem for the important and rapidly growing rum export industry?
- If bulk shipments of sugar out of the Demerara Sugar Terminal (DST) fall to just a handful annually – what is to happen to that installation which has done its job so efficiently for nearly 60 years? Unlike in Barbados where the bulk terminal became a valuable docking place for cruise ships DST seems to have no alternative use. And have employees there been informed and consulted about future plans?
- Isn’t Uitvlugt in danger of being closed if moving cane and people from Wales fails in 2017 as seems to be the case?
- What will employment be in the industry in 2018? Is the figure 8,000? This would mean a reduction of 8,000 from the current figure. What is the plan for those suddenly unemployed 8,000 and their dependents say 36,000 more? What specifically does the government have in mind for them?
- As an aside, has an analysis been done of how many became unemployed at Wales in 2017 and what they and their dependents are doing? Surely a report on this and the impact on the whole community around Wales must have been made to Cabinet as a guide to future action?
- The impact on the communities suddenly without sugar operations at the end of 2016 (Wales) and at the end of 2017 (Skeldon, Rose Hall, Enmore, LBI) is bound to be severe in terms of unemployment, the ending of spin-off activities and services disrupted and neglected in transition to new arrangements. Very specific plans to alleviate the serious impact of such unemployment and disruption are presumably well in hand and must be carefully explained. Generalised expressions of good intentions in offering alternatives are surely unacceptable.
“I can readily understand the dilemma – I might even call it plight – of a government faced with an industry where a major project such as Skeldon has not fulfilled its expectations and productivity elsewhere has also declined alarmingly – not least under another government’s watch – and where losses now eat up precious funds which could be devoted, say, to dramatically improving education (which, God knows, needs it). But, equally, the government should understand that the nation as a whole, and the thousands of sugar workers and their families at risk in particular, need at the very least full disclosure of prospective alternative plans to ease the fears of the soon to be desperate unemployed and whole communities which will be bereft of a mainstay. And these plans need to be explained in advance of the irrevocable steps now contemplated.
“At this historic juncture in the nation’s affairs – sugarcane was first grown here (in Essequibo) in 1636 – it is essential that the government pulls out all the stops to earn the trust of all its people.”
Since that was written various steps have been taken. One such step is the move to have the industry’s assets valued. Another step, to be undertaken by the Government’s Special Purposes Unit of NICIL, is to find companies interested in taking over Wales, Skeldon, Rose Hall and Enmore estates.
Presumably, until these steps have been completed these estates would continue to operate and produce sugar and employ people.
Instead a tug-of-war in high places is playing out. An influential Minister announces that estate closures will be delayed. Hardly has he stopped talking than workers in their thousands are laid off. What on earth is going on? In his budget presentation the Finance Minister gives an estimate of sugar production in 2018 of 115,500 tonnes. This compares with the 147,000 tonnes in the original plan. Why should anyone believe that a recovery from this latest dreadful forecast will take place? It more looks like a sugar industry about to vanish completely.
Someone – but who among the warring parties? – should give an updated, no-nonsense, ‘this is what Cabinet intends’ account of what is now planned for sugar – and, most importantly, how many people are going to be employed in sugar in 2018 and what in the name of heaven is going to happen to the thousands of workers and their families and dependents who have been/and are going to be laid off?