Crippling sugar price cuts…EU transferred $3.4B to Guyana last year
Guyana received $3.4B last year as part of the European Union
(EU)’s continued support for the sugar sector.
This year, another amount to the tune of 24.9M Euros, is scheduled to be disbursed once the Financing Agreement is signed between the EU and the Government of Guyana, which is expected in the near future.
This will be part of the second Multi-annual Sugar Programme for the period 2011-2013. The assistance program has come on stream following a cut in sugar prices by the EU which crippled the industry in a number of Caribbean countries. The EU remains Guyana’s biggest market for sugar.
In a statement yesterday, the EU said that the 12.5 million Euros ($3.4B) was transferred in December 2011 to support the sugar sector in Guyana. This disbursement was part of the EU-funded Multi-annual Sugar Programme 2007-2010, which supports the Government of Guyana in its efforts to improve the competitiveness and viability of the sugar industry in Guyana.
From 2006, when the programme started, the European Union has already made available 72.5 million Euros to the sugar sector in Guyana, equivalent to GYD $19.3 billion at today’s exchange rate.
“The EU support continues to assist Government’s policy to reform the sugar sector by upgrading GuySuCo (Guyana Sugar Corporation)’s sugar factories, establishing a sugar packaging plant at Enmore, increasing sugar production and mechanizing GuySuCo’s field operations in particular, thereby improving the cost effectiveness of the sugar industry,” the statement said.
This EU assistance is provided through a direct budget support mechanism and the disbursements are made based upon the achievement of performance indicators that monitor the implementation of the sector policy on sugar. Funds are also channeled towards studies, evaluations and audits to ensure effective implementation.
In November 2005, EU agriculture ministers reached agreement on controversial reforms of the sugar regime. The ministers agreed that EU prices, kept high by a 40 year-old price guarantee agreement, should be cut by 36% over the next 4 years from the 39% originally proposed.
The African, Caribbean and Pacific (ACP) sugar-producing countries had expressed outrage at the agreement, which is only a 3% smaller cut than the 39% originally proposed. The ACP countries have been significant beneficiaries of the EU system. They had been pressing for a cut in prices of only 19%, failing which they claimed they stood to lose 300 million Euros a year in direct export earnings and the destruction of their sugar industry. The EU, however, has promised financial assistance to ACP countries to help cope with the changes.