Jan 31, 2013 News Comments Off on EU’s sugar quota extension…Guyana preparing measures to take advantage – Agri Minister
Government says that it is preparing a number of measures that will allow Guyana to capitalize on a critical five-year extension of its sugar quota to the European Union.
Last week, the European Parliament’s Committee on Agriculture and Rural Development voted to extend the sugar quotas for the African, Caribbean and Pacific (ACP) Group of States.
In 2006, the EU decided to end the quota system by 2015 as pressure grew by beet and other players in the sweeteners industry for a liberalization of the market.
Guyana has an annual sugar quota of 190,000 tonnes to the EU, a demand that it has been finding hard to meet.
The extension is a “welcomed decision” that evolved from a major lobbying effort, said Minister of Agriculture, Dr. Leslie Ramsammy in a government release.
“There has been extensive lobbying and many in Guyana and the Caribbean believed that the Government and the other Governments that joined in the lobby, were wasting their time that the Europeans will not extend their time beyond 2016. We believed that the European leaders would have listened to reason.”
According to Dr Ramsammy, after extensive lobbying, the Europeans had indicated that they were not willing to extend the quota beyond 2016. “In other words they would have given a one – year extension. Guyana was vigorous in our lobby and at an African, Caribbean and Pacific Group (ACP) meeting that was shared by our Foreign Affairs Minister; the ACP countries had started a lobby that the quota arrangement should not come to an end in 2015 or in 2016. We should at minimum extend it to 2020 and even beyond.”
The minimum position taken by the lobbying countries, including Guyana, was that the deadline should be 2020, he disclosed.
The Minister said that the sugar industry therefore has another seven years or so to adjust and this must occur. These planned adjustments will be announced at a later date.
Europe’s departure from Guyana’s sugar plantations had seen the birth of the Economic Partnership Agreement (EPA), launched in 1973, which initially promised that sugar sale to the EU was indefinite.
The EPA was designed to compensate countries such as Guyana, which for hundreds of years as a colony, supported the economies of developed countries.
However, in the 2005/2006 period, this EPA was revised and resulted in a drop of at least 36 per cent in the price of sugar supplied from ACP countries.
According to Dr Ramsammy, this move was seen as “a betrayal of trust”.
“We believed that the period of time for the industries to re-orient themselves was not enough and the mechanisation and modernisation of the sugar industry will take much longer than the period given to us.
“We also believed that this modernisation has to occur within a new reality, the reality of climate change. Because of that, we needed more extensive time for our industries to have to give up the preferential European market.
“That is why we thought that the lobbying effort must be tireless, must be vigorous and we mustn’t give up.”
The extension would be more than a welcome one for Guyana at a time when production is at an all time low but showing signs of recovery. It would be ironic too especially as sugar prices have been high in the last couple of years.
Sugar exports had become one of the biggest earners for Guyana but fell over the years as costs mounted, the work force dwindled and infrastructure became harder to maintain.
A US$200M investment in a brand new factory at Skeldon that was supposed to increase production as part of a larger sugar “turnaround” plan has not worked that well.
A US$12M packaging plant at Enmore has also been commissioned to help bring more cash to the industry but the industry has been battling against rains to meet the quota and this has suffered to an extent.
The Guyana Sugar Corporation has closed several of its estates to reduce costs.
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