Oct 22, 2011 Letters
Speaking at Khaleel Bridge junction, Enterprise, on the East Coast of Demerara, President Jagdeo promised sugar workers that he would make the sugar industry in Guyana viable.
First, this should have been Donald Ramotar’s promise to make, not Jagdeo, seeing he will be demitting office in a few weeks. However the PPP leader went on to say that his party’s vision for sugar was to move the industry in a sophisticated direction, where operations are mechanized and manual labour is miniscule (reduced).
Nineteen years ago this would have been a very timely and forward looking statement, but in light of today’s reality, the state of the sugar industry in Guyana, and anemic world sugar prices, this was the ramblings of a leader pandering to his base.
Make no mistake, without the support of sugar worker in Guyana; the already badly wounded PPP would be dead on arrival. This particular constituency has been the mainstay of the party since 1957, and Ramotar needs them in order, to have a respectable showing, as the rest of the base crumbles.
The truth about sugar though is much less rosy, and if the PPP makes the industry “viable”, and mechanization trumps manual labour, then many more sugar workers will find themselves among the ranks of the unemployed.
What Jagdeo did not spell out to the people at Enterprise was that with mechanization would come less need for manual labour, and with viability, low producing and under-performing assets (estates) would be shut down, this is the only path to viability.
The sugar industry in Guyana has been one of the most subsidized industries in the history of the Caribbean, and continues to be heavily subsidized. Because of a lack of vision by the PPP, Guyana failed to diversify and invest in alternative industries. So in 2009 when most of the preferential treatment ended, industry bosses were caught flatfooted.
The 2009 price of approximately US$530 per tonne of sugar is roughly equivalent to world market prices; this constitutes a minimum price for our sugar until 2012. This is a major reduction from the US$830.27 per tonne we were getting just a few years ago. The lucrative period of EU support for our sugar is now over and we must now fend for ourselves. That is the truth, but the PPP failed to tell the workers that the party is over; instead trying to hustle votes, they promised more from an already empty cup.
In the first half of last year sugar production stood at 81,864 tonnes, representing a 1.8% reduction from 83,357 tonnes in 2009. In 2008, sugar exports earned US$57M, which declined to US$47M in 2009 and even further to US$37M in 2010 representing a 21% reduction from the 2009 level.
So to my friends in the sugar industry, if the PPP is going to make this industry viable, or profitable, then they will have to start by finding a way to make a profit. As we speak, since 2001, the sugar industry wage bill has amounted to over 63% of total operating cost. Any economists, even the Russian-trained ones, will tell you that that is unsustainable. Add to the high wage bill the high cost of production and we have a formula for failure.
GuySuCo by its own estimates said that in order to be competitive, production cost had to be below12 cents per pound, but estates all across the country have failed to meet target; Skeldon 30 cents per pound, Albion 19 cents per pound, Rose Hall 19 cents per pound, LBI 26 cents per pound, Wales 23 cents, ICBU 41 cents. This is the picture of an industry in crisis.
The Skeldon factory, that flagship of the industry, demands 350 tons of cane per hour; the current loading at Skeldon today is around 93 tons an hour, and to grind continuously it requires 2232 tons a day! This new factory at 350 tons an hour would require 8400 tons a day. We all know that due to labour stoppages, reduced production and “technical” problems, Skeldon operated at around 64% of the time last year, there is also evidence that other estates did not fare much better and many are being deprived of money to keep their operations economical and competitive.
Old people used to say “fool me once shame on you, fool me twice shame on me”. I hope our brothers and sisters in the sugar industry will not be fooled by PPP government into thinking that all is well and things will get better; the bitter truth about sugar is that, things will probably get worse before they get better. Politically, that is Hari Kari, and Ramotar and Jagdeo know that, but they continue to fool the sugar workers hoping that they will vote for them come November 28th.
It is my opinion that these hardworking men and women deserve better, Ramotar sits on the board of GuySuCo, and essentially was an architect of its demise; he should not be rewarded with the votes of the very people whose livelihood he allowed to be gambled away.
The future of sugar in Guyana requires vision and straight talk, something the PPP knows nothing about. Sugar workers should this year vote their future and not their past; their hopes and not their fears; if they do, a new and better Guyana awaits!
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