Sugar industry ‘stewardship’ very questionable

The Guyana Agricultural and General Workers Union (GAWU) once again must express its concern over the direction and operation of the Guyana Sugar Corporation Inc (GuySuCo). Such concern is obviously justified bearing in mind that thousands of Guyanese not only depend on the industry in one way or another for their well-being and sustenance, but as taxpayers they  also provide the financial support to the sugar company.

Given the industry’s wide reach and the magnitude of its responsibilities its success and viability is very much important to Guyana’s future and prosperity.

Taking those factors into account and given the current state-of-affairs in the Corporation, we are puzzled that alarm bells are not being sounded, and if they are sounded it’s not being heard by those who are in charge of managing GuySuCo’s affairs. According to the Corporation’s 2017 factory production schedule, the sugar company is on track to deliver its lowest production in twenty-seven (27) years. The 2017 second crop, now in infancy stage, is expected to see the six (6) grinding estates producing aggregately 124,844 tonnes sugar. That target when taken together with the miserable 2017 first crop output of 49,599 tonnes sugar, will see the sugar company producing 174,443 tonnes sugar this year. This is an abysmally low target, given the company’s potential and the huge financial resources at its disposal. It is the lowest production since 1990 when 129,920 tonnes sugar was produced. At the beginning of the year the Corporation had set itself to produce 198,458 tonnes sugar – 74,172 tonnes in the first crop and 124,286 tonnes in the second crop. It means therefore that the actual production this year will be 24,000 tonnes less than projection, and this takes into consideration that the company’s target of 124,844 will be achieved. Given the company’s track record of hardly, within recent times, achieving anything near to its target, the 124,844 could even be in jeopardy.

The expected sugar production at the various estates is as follows:-

Regarding this year’s production, based on information seen by GAWU, we wish to make the following points:-

• At the end of the first crop, 1,873 hectares of canes that should have been harvested at Albion, Rose Hall, Enmore/LBI and Uitvlugt Estates was not harvested for several reasons. Those canes, had they been harvested, would have seen GuySuCo producing an additional 7,137 tonnes of sugar. In other words, had all the first crop canes been converted into sugar then GuySuCo would have produced 53,736 tonnes sugar or just over 72 per cent of its crop target. Clearly, the Corporation hadn’t the canes in the first place to realize its target.

• The un-harvested first crop canes have not disappeared and though over their maturation stage they can still be harvested and yield some amount of sugar. This is not by any means a new phenomenon. Even if half of the realizable sugar is obtained, then sugar production in the second crop ought to be 3,569 tonnes sugar higher than what is estimated. But, disconcertingly, the second crop target has increased marginally by 558 tonnes sugar (124,844 – 124,286). The company is seemingly confused or unable to determine its sugar production estimates.

• When Skeldon is taken into account the situation becomes even more troubling. At the beginning of the year that estate was estimated to produce 36,701 tonnes sugar – 8,871 tonnes in the first crop and 27,830 tonnes in the second crop. GuySuCo, earlier in the year communicated to the Union, that the first crop canes would be harvested in the second crop. Thus, even if half of the first crop estimated sugar is obtained when those canes are finally harvested (8,871 ÷ 2 = 4,435), then Skeldon’s production ought to be 32,265 tonnes sugar (27,830 + 4,435). In other words, production at Skeldon’s second crop output is 2,168 tonnes lower than what it really should be (32,265 – 30,097).

• Those two situations taken together, tells us that sugar production in the second crop should really be 132,290 tonnes (124,286 + 3,569 + 4,435). The difference 7,446 tonnes (132,290 – 124,844), would have yielded the Corporation about $821M in revenues. The stark difference and its impact on finance tell us that something is clearly amiss. It seems, from what the data is telling us, that large areas of harvestable canes will be abandoned and not harvested during the second crop. This for us is of grave concern taking into account that the Corporation would have made investments in terms of planting, fertilizing, spraying, weeding, water management, among other husbandry expenses. This, in our view, points to gross mismanagement and incompetence. The Company, which has said that it has the ‘best minds’, certainly is very much answerable for the poor state-of-affairs.

• The GAWU has noted that the perennial excuses of ‘weather’ and ‘industrial action’ have been deployed as the expressed rationales for the production levels recorded and estimated. In the case of strikes, a Corporation report seen by GAWU, pointed out that the number of strikes has fallen by as much as 44 per cent in the 2017 first crop when compared with the 2016 first crop. Certainly, the strike argument doesn’t have a strong, if indeed, it has a leg to stand on. In terms of the weather, while we accept that it was a bit unusual during the crop we saw GuySuCo report which advised that rainfall was just 15 per cent higher than normal. Certainly, it was within tolerable levels but it seems that this excuse is being shamelessly magnified to cover the Corporation’s tracks of perpetual failure.

Clearly, the usual ‘whipping boys’ for the GuySuCo’s failures cannot be scapegoated when GuySuCo’s own data is taken into account.

So then the obvious question is: what are the real, true and correct reasons for the Corporation’s declining state of health. The GAWU, by itself, does not believe it possesses all the answers to that burning and important question but at the same time recognizes that clearly something is deeply wrong at the top of GuySuCo. We have seen production moving from 231,000 tonnes in 2015 to 183,000 tonnes in 2016 and now 174,000 tonnes in 2017 – assuming the target is met.

In the two (2) years under the stewardship of the Corporation’s IMC, production has fallen by a whopping 25 per cent. This is, in our estimation, warrants serious examination. It seems the ‘stewardship’ of the sugar industry is very questionable.