WPA says backs restructuring of sugar

The Working People’s Alliance (WPA) today announced its support for the government’s restructuring of the sugar industry.

The WPA is a member of the major component of the governing coalition, APNU.

A statement from the WPA follows:

WPA Statement on the Restructuring of the Sugar Industry

Skeldon workers during a protest last December.

WPA wishes to go on record that it fully supports the restructuring of Guyana’s sugar industry. As others have pointed out, the concern over the future of the sugar industry is not new. Given the political and ethnic sensitivities surrounding the industry, we salute the government for taking this very bold step. In doing so it has broken the cycle of political manipulation by the PPP and its allies and in the process, joins other countries in the hemisphere in squarely facing the challenges of sustaining an industry based on government subsidies. Poor economies such as ours cannot carry that burden forever.

It makes no economic sense to continue to produce sugar at a cost that far exceeds the market price. The statistics in this regard are well known. In the end, financing the subsidy has had a negative effect on the rest of the economy. Indeed, over time it has become one of the barriers to economic growth. But given, the centrality of the sugar industry to the larger economy, WPA believed and still believes that the restructuring process should be well thought through and should be done in consultation with the workers and their representatives.

While we support the restructuring of the industry, WPA has always held the position that it should not be done at the expense of the workers’ welfare. We still hold strongly to that position. We believed that special care should be taken to ensure that where possible workers are relocated to other sections of the industry or sectors of the economy or be adequately compensated. It is against this background that WPA supported the Commission of Inquiry and endorsed most of its recommendations. We also supported the subsequent State Paper presented to the government by Guysuco.

As a party founded and grounded in the defence of the poor and the powerless, WPA would never be party to any plan that undermines workers’ interests. It was in keeping with this that we continuously urged the workers to ensure that their issues and positions are made known to the Guysuco Board through their Union representatives. Towards this end, we are satisfied that Guysuco has gone to great length to ensure that the sugar workers at the lower levels are adequately compensated. WPA rejects the accusations levelled at GuySuCo’s Board that consultations were not held with workers and their representatives on plans to right size the operations. It is widely known that GuySuCo had on numerous occasions initiated discussions with the workers representatives on the future of the industry. Even the Guyana Times of Wednesday, 17 January 2018 admitted that “Government has long made known its plans to close the Enmore and Rose Hall sugar estates, sell the Skeldon Sugar Factory, reduce the annual production of sugar, and take on the responsibility of managing the drainage and irrigation services offered by GuySuCo”. Also, “GuySuCo which was saddled with billions of dollars in debt, is currently engaged in divesting its assets to get cash to meet its operational and other expenses”.

It is regrettable that funds for the severance payments were not catered for in the 2018 budget, but government must be commended for acting to ensure speedy payment of 50% of the amount promised. WPA would be vigilant in ensuring that the government keeps its promise to pay the remainder in a timely manner.

WPA notes that it is public knowledge of how we got to the point of rightsizing the sugar industry projected at around 150,000 tons by 2020 serving the most profitable markets given available labour supply (State Paper on Sugar, 2017). In addition, GuySuCo plans to develop diversified enterprises to complement revenue from sugar. We call on GuySuCo to make the requisite investment in people, technology and managerial systems to sustain the competitive advantage of sugar and to stabilize employment at around 11, 000 workers. We urge government to give Guysuco the autonomy to make business decisions free from political interference and to ensure that managers are held accountable for those decisions.

It has been noted elsewhere that our people use the income from employment in sugar to sustain the rural economy. Of equal importance is the fact that when ‘king’ sugar was in economic distress from manipulation of sugar prices, changes in technology and trade policies or erosion of market access, our people demonstrated resilience in adding new economic activities like rice, gold, balata, etc.

The WPA urges workers to demonstrate once again their capacity to develop alternative employment that do not depend on cheap labour. Already, peasant cane farmers at Uitvlugt have increased their supply of cane from 0 % to 58 % under GuySuCo’s Farmers’ Land Leased Initiative. GuySuCo has also launched its own Alternative Livelihood Programme for affected workers. We call on government to provide the necessary institutional and financial support to enable displaced workers to develop sustainable livelihoods in which Government cannot be the only stakeholder. WPA supports private sector initiatives that promote economic linkage and provide quality jobs for working people. We call on government to observe all labour laws and collective agreements in dealing with the separation benefits of displaced workers.

The public should also be aware that government will have to meet additional financial commitments for pensions, NIS, taxes that Guysuco was unable to pay because of the disparity between cost of production and sugar prices since 2006. This is in addition to the estimated G$4 billion for severance, the G$32 billion since 2015, the G$2 billion guarantee for operations in 2018. We believe that the incumbent Government of Guyana cannot be accused of neglecting sugar, and we urge the public to support the measures to make the industry viable and competitive.
Our long term view sees Guysuco as a diversified publicly traded entity financed and managed by Guyanese in much the same way as Banks DIH, DDL or Sterling Products Limited.

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