The GAWU recognized Mr Rawle Lucas in his article titled “The No Confidence Vote and the ‘Ides’ of December” which appeared in the January 01, Kaieteur News. Mr Lucas in seeking apparently to be critical of the recently approved No Confidence motion against the Coalition Government, addressed, among other things, the performance of the sugar industry.
Mr Lucas, in seeking to offer a defence, wrote “[w]ith sugar production costs in Guyana way above world prices, Guyanese taxpayers, who were bailing out the sugar industry, were also helplessly subsidizing sugar consumption by the rest of the world through the export of the product”. It seems Mr Lucas has joined the small bandwagon that is convinced or believes that sugar producers actually have production costs lower than the world market price of sugar. This, however, is completely fallacious.
In fact, to make such statements is to be largely ignorant of the international sugar trading mechanisms. The World Bank, in a report titled “Sugar International Market Profile”, points out that the international sugar trade “…is largely defined by preferential trade agreements”. In fact, a very small volume of sugar produced is actually traded on the world market. Regarding the world market itself, well-known commentator Christopher Ram, in his presentation Sugar Commission of Inquiry in 2015, said “…to compare and equate the cost of production of sugar in Guyana with the world market price for the commodity…[it]would be dangerous to assume that the scores of countries[are]offering sugar on the international market actually produce the commodity below that price and therefore make a profit.” Ram went on to say “…the international sugar market is one of the most highly distorted agricultural commodity markets… characterised by significant and widespread domestic support and trade distorting policies, such as guaranteed minimum payments to producers, production and marketing controls (quotas), state-regulated retail prices, tariffs, import quotas and export subsidies.”
The author goes on to say that the “…government could ill-afford to subsidize…” the sugar industry. This, however, is far from reality as we see the Coalition Government planning by the time 2019 ends to spend as much as $1.2T dollars. In other words should the Administration be in office by the time that 1,691 days would have elapsed, it would have spent astoundingly about $710M per day. It hardly gives credence to Mr Lucas’ notion that the Government is cash-strapped and cannot afford to assist sugar. But again lest we forget, the Coalition’s support to the sugar industry represented just 3 per cent of the large sum the Government has earmarked to spend.
We also wish to remind that to solely take into account, GuySuCo’s financial position as has been the case of many in the Government’s quarters, is a most dangerous position. On this matter, the Asian Development Bank instructively pointed out “[p]rofits… may not be a good signalling mechanism… to the national economy.” Moreover, the Caribbean Development Bank (CDB) in 2014, in considering the Guyanese sugar industry, had this to say “…that it is economically viable for GOGY [Government of Guyana] to continue subsidising and protecting the cultivation and harvesting of sugar cane and processing of sugar for export and local consumption”.
Mr Lucas also tells the public that “[b]y its actions of not closing the industry, the Coalition saved about 12,000 jobs while having to let go of 6,000 workers”. We had to wonder where is it that Mr Lucas is getting his figures from. We wish to share with Mr Lucas that it was 7,000 Guyanese men and women that lost their jobs after the Government decided to close four (4) estates. Using a family size of 5 persons, it means that as many as 35,000 persons have been directly affected. Of course, that does not take into account the many Guyanese and their families who depended on the consumption of those 35,000 persons for their livelihoods. For us, its hard to talk about saving when tens of thousands of Guyanese find themselves in 2019 facing miserable situations. The goodly Mr Lucas also boldly says that 12,000 jobs were saved. We wish to urge Mr Lucas to check and double-check his sources before putting pen to paper, or as some people say now putting fingers to the keyboard. We hasten to remind that no lesser than His Excellency President David Granger has repeated, on several occasions, that the industry would have 10,000 employees. It is difficult to see how Mr Lucas arrived at clearly the incorrect destination he finds himself. Nevertheless, to bring even greater clarity, GuySuCo told our Union at the end of August, 2018 it had 7,970 workers in its employ. Of that 463 were retained at the now closed estates and will be terminated soon as the Corporation ends its operations at those estates.
Contrary to Mr Lucas’ seeming belief that sugar cannot be made successful, we wish again reiterate that GuySuCo’s survival involves shifting focus to moving up the value chain. The Sugar CoI report unambiguously recommended “[t]he industry can no longer rely solely on the production of Raw Sugar. Added -value products are required.” Along those lines, suggestions have been advanced regarding the production of electricity through bagasse co-generation; the production of refined sugar; to produce direct consumption sugars; to produce extra-nuclear alcohol for the rum industry, among other things. Going in this direction, is not by any means a new concept. The World Bank, in the report we referred to earlier, informs that “[s]ugarcane offers production alternatives to food, such as feed, fibre and energy, particularly biofuels (sugar-based ethanol) and/or co-generation of electricity”.
Sugar’s woes have been exacerbated and magnified by the uninformed and callous approach of the Coalition. Today, too many are facing hardships they really shouldn’t find themselves in. Interestingly, we noticed the January 03, Kaieteur News reporting that the Leader of the Alliance for Change and Minister of Natural Resources, Raphael Trotman in an email to members of his party said he wanted a “…social impact programme for sugar workers…”. For us this is an interesting about-turn of sorts, as Minister Trotman was present when his colleague, Vice President Khemraj Ramjattan on February 03, 2017 said without hesitation that the Government would not undertake a socio-impact study regarding the Government’s then proposal to close estates. The fact the Minister Trotman, from all appearances, sees belatedly the wisdom in such a programme is a clear indication that the decisions regarding sugar have not been in the interest of the people and the country.
