The Re-opening of Guyana Sugar Estates on Track

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President Dr Irfaan Ali Assures Sugar Workers at Rosehall, Canje

By Dr. Tara Singh

Guyana’s President Dr Irfaan Ali stated on September 1, 2020 at an outreach in Canje, Rosehall estate that plans are already proceeding to re-open three of the sugar estates that were closed by the previous PNCR government.

This announcement has been consistent with the President party’s election manifesto pledge that a PPPC government will reopen the closed sugar estates. This is good news to sugar workers and their families, most of whom were hurled into the poverty pool with the sugar estates’ closure in 2016. The dark clouds that hovered above have begun to dissipate.

While people’s memory of political events are short, the closure of 4 sugar estates will live long in the memory of sugar workers and advocates. This has become integral to their history. When the PNCR government decided to close 4 sugar estates within one year and place over 7000 workers and their families (totaling about 39,000 individuals) on the breadline, that was not only a massive blow to the estate communities but also to all decent Guyanese.

The Government’s own Commission of Inquiry (COI) recommended a 3-year turn around period, but that was rejected on the pretext that sugar was losing about $(G) 5-8 billion a year. Former President David Granger increased his staff at OP which consumed more than this amount. Even the figure cited is highly suspect since it was padded with the cost of drainage and irrigation to non-sugar communities, health care and other community services within sugar estates, as well as subsidies to the local market. Not forgetting that between 1976 and 2000 sugar workers paid over $(G) 96 billion into the Sugar Levy Fund which had been used to subsidize other sectors of the economy. In addition, sugar workers also pay into NIS, indirect taxes, and income taxes. When these contributions are combined, the net loss of the sugar industry had been considerably less.

Critics point to this perceived loss (unquantifiable) as the main reason for justifying the sugar estates’ closure. Their approach is strictly financial in nature. They fail to consider the economic and social impact (ESI) of closure on the sugar estates and surrounding communities. To get rid of thousands of workers and not providing them with alternative jobs was brutal. The enlightened and humane approach was to first conduct the ESI before dismissing those workers, who have known no other industry other than sugar, and whose lives and livelihood have been enveloped by sugar. It’s no good to cite what other Caribbean countries did, as they provided alternative employment to displaced workers.

There is a growing body of sugar advocates including sugar union GAWU that there is a bright future for cane sugar notwithstanding competition from beet, corn syrup, and artificial sweeteners. Cane sugar has distinct qualities like its spinoff of molasses,that sets it apart. While sugar had been losing money particularly since the 34% decline in the European Union price beginning in 2006, many people feel that sugar could survive hard times with restructuring and diversification.

While the EU cut sugar price drastically, it did set aside funds between 2006 and 2013 to mitigate the negative effects of the sugar industry as well as the country. The challenge to sugar became more severe when the EU quota system was abolished in 2017. While that cut in quota led to a 10% increase in EU sugar production, it precipitated a decline of 25% in sugar production in ACP countries, including Guyana.

But these formidable challenges should not blunt the new government’s passion to restore viability to the industry upon which over 100,000 people depend, whether directly or indirectly. With restructuring and diversification, sugar’s could rebound.

With respect to diversification, advocates point to energy production, ethanol from corn cultivation, expansion of peasant cane farming, etc. At Wales sugar estates, for example, over 60% of the cane produced was by cane farmers. Of course the role of mechanization might be crucial as well as getting high yield variety of sugar cane. Perhaps India can help here.

As to restructuring, GUYSUCO should be disbanded and a board (Sugar Marketing Board!) established along similar lines as the Rice Marketing Board. The SMB main mission is the marketing and promotion of sugar and its by products. Each sugar estate must have its own management structure and accounting office.

Decentralizing sugar production will allow for higher productivity, better competitiveness, better returns, cost reduction, and greater accountability. Also, the tremendous GUYSUCO administrative over heads will be avoided.

Another option might be privatization or joint government-private enterprise. I prefer the latter. How the government will approach this matter is not known at this time but the country waits anxiously for the restoration of the sugar estates.

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The views expressed in this article are those of the writer and do not necessarily represent the position or policy of the THE WEST INDIAN.

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