Consolidating sugar

Disregard for one moment the breathtaking bumbling by the APNU+AFC government on the sugar industry and consider the plight of nearly 5,000 workers who have been made redundant since the Wales Factory shut its operations at the end of 2016.

Not many of these workers have been able to find jobs or to strike out on their own. For rigorous examination of this crisis it behoves the government in collaboration with GuySuCo and the two sugar unions to draw up a comprehensive register of all those made redundant and to begin tracking their well-being and that of their immediate families. It would the best way to inform arguments and policy on the way forward. Purely on the basis of conversations between the media and dozens of now unemployed workers and their unions, the situation is dire. Around half may have gotten their full severance payment by now and the rest a portion of it with the remainder promised by the end of the year.

The most troubling aspect of the redundancies, as one can imagine, is that there is no ready alternative employment for the workers or the prospect of becoming overnight entrepreneurs. The government and what remains of GuySuCo have signally failed the workers in this respect. Taking the redundant Wales workers as an example of the fate that may await the roughly 4,500 made jobless by the end of December last year, the situation is bleak.

Around 350 Wales estate workers have been clamouring to be paid severance in accordance with the Termination of Employment and Severance Pay Act (TESPA). GuySuCo is challenging the former workers’ interpretation of the Act. In the meanwhile these workers don’t have access to severance pay or other means to develop an alternative livelihood. Of the other Wales hundreds who took severance, few of them have found other jobs. Moreover, the promises that GuySuCo and the government had made about diversification from sugar have fallen flat. The much heralded seed paddy cultivation at Wales has been quietly declared to have not met expectations and is unlikely to return. GuySuCo spent much time and commissioned studies on the feasibility of integrated aquaculture at Wales. Nothing has been heard about this recently and this proposed diversification also appears to be a non-starter. Analysts had also warned that neither of those two ventures would be automatically commercially viable and furthermore neither had much prospect of bringing in foreign currency lost from sugar operations.

In the interim, the only other initiative of any note has been a job fair organised by the Private Sector Commission which saw hundreds of persons registering for openings. It is yet to be seen how many of these positions will be actually filled by the former sugar workers. GuySuCo and the Ministry of Business have also held seminars for the former sugar workers and provided financial advice but it is not likely that this will result in flurry of jobs and instant entrepreneurs.

The government, given all of its promises and the danger to the economy now from the loss of nearly 5,000 people purchasing goods and services, paying taxes and making contributions to the National Insurance Scheme, needs to make a much better effort at creating conditions that will lead to more jobs for these ex-workers or getting them back into functioning sugar estates.

It is the latter option which has really exposed the incompetence by the government and its GuySuCo planners and called into question whether they are capable of running any complex part of the economy. At whichever point the government or GuySuCo, or both, decided that they were going to shutter four estates, they completely discounted or were oblivious to the possibility that they might later seek investors for a going concern which investors would have wanted to see a demonstration of the factories in action.

The upshot here is that after the swift and callous closing of factories in December, two of them are to be reopened in a limited manner to harvest canes still in the field and to impress investors. A significant sum would have to be expended on this.  Despite having experts advising it on the sugar industry, the government has been completely at sea about how to approach the crisis.

Having been well aware of the industry problems following disastrous PPP/C government decisions such as the Skeldon Sugar Modernisation Project, the APNU+AFC government wasted time and money on a Commission of Inquiry into the state of the sugar industry which has now been cast aside, produced an innocuous White Paper and has now delivered  the coup de grace by having to reopen factories.

Rather unsettlingly, the fate of the industry now seems to be in the hands of the Special Purpose Unit (SPU) of NICIL as the Ministry of Agriculture has now made it clear that it is no longer responsible for this area.

Robust action has to be taken by the government in several areas to consolidate the sugar position. First, Guyana needs to begin an urgent lobby within CARICOM – hopefully this will feature at the Heads of Government Meeting beginning today – to ensure that the sugar needs of the region are mostly met from this country’s production primarily by the rigid observance of tariff arrangements and by the timely exchange of information on market needs.

Second,  for the three estates being retained: Albion, Blairmont and Uitvlugt, a careful examination is required of how their production costs can be lowered and an investment has to be made to achieve this. It should also be analysed how these estates can expand cultivation and other operations to provide more jobs in their catchment areas.

Third, the government/GuySuCo/SPU must speed the ongoing evaluation of assets of the decommissioned estates and factories with the intention of having them continuing operations, thereby providing an opening for the rehiring of some of those who have lost jobs. Proper due diligence will have to be done on prospective investors to ensure that they have the wherewithal and are not straw bidders.

Time is of the essence.

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