Govt White Paper on sugar: A political prop to disguise the “too big to fail” lies- Ramsammy


Below is a Commentary by Dr Leslie Ramsammy on Government’s recently advanced White Paper where Agriculture Minister Noel Holder outlined their vision and plans for the troubled sugar industry going forward:

Dr Leslie Ramsammy

The White Paper on Sugar, as presented by the Minister of Agriculture, Noel Holder, is a non-paper. It is another cruel and shameless attempt to change the narrative. Like the previous desperate attempts, this white paper is just as futile; the ugly narrative cannot be changed. Far from changing the narrative, the White Non-Paper confirms that, at the very least, APNU+AFC is maliciously downsizing SUGAR as a prelude for CLOSURE. This is the narrative they desperately want to change, but the Guyanese people are not buying APNU+AFC’s misinformation and misdirection.

The White-Paper, a doomsday presentation, provides no assurances, nor any plans on how three sugar estates, Albion, Blairmont and Uitvlugt will stay open. In fact, reading between the lines, the definite closure of three more sugar estates in 2017, added to Wales which was closed in 2016, represent the beginning of a plan to close sugar. David Granger, Nagamootoo, Ramjattan, Holder, Trotman, Charandass, Thomas and the whole APNU+AFC machinery, together with the hatchet team of GUYSUCO senior management and Board must carry this shame with them forever. The scandal and fiasco and the shame of SUGAR downsizing, the subsequent closure and the loss of more than 15,000 jobs and the threat of poverty for between 50,000 to 100,000 people will be tattooed on their forehead forever.

More than half of the paper is filled with interesting, but irrelevant historical information, with a hefty dose of inaccuracies. Production data, even if historical, is meaningful only if it is accurate. For example, between 1976, when SUGAR was nationalized, and 1992, production averaged about 245,000 tons annually and not 328,000 tons. This average production under the nationalized industry was significantly below the average sugar production between 1946 and 1976 when the industry was operated by Bookers. GUYSUCO’s records, Bank of Guyana Annual Statistics, Bureau of Statistics and National Budget data will confirm my statistics. In fact, production in the 1980s fell to an average of about 200,000 tons, and, by 1991, fell closer to 100,000 tons. Production rose to an average above 250,000 tons in the 1990s and even surpassed 300,000 tons on several instances in the 1990s before encountering difficulties beginning in 2010. These difficulties followed the EU’s arbitrary 37% reduction of the price for sugar, the impact of climate change and the need for accelerated mechanization, all difficult issues, but each of them solvable, but unaddressed in the paper.

Interestingly, the White-Paper omitted relevant information. SUGAR provided almost $100B in today’s money worth to Central Government, through the Sugar Levy between 1976 and 1996. This omitted information is relevant as it places present day cash inputs from Central Government in a different perspective – Central Government is repaying, not subsidizing SUGAR. In addition, the White Paper ignored the $30B in EU Budgetary Support as compensation for the arbitrary reduction of sugar prices. This, too, is relevant information for relevant assessment of what is going on in SUGAR. Significantly, diversification of GUYSUCO’s operation was an important part of the 1980s, SUGAR Story. This was ignored in the White Paper. The omitted information do not support a narrative that APNU+AFC wants to disseminate to people.

The so-called White Paper ignored the recommendation of APNU+AFC’s own COI and, further, ignored the recommendation of the IMF. While it makes reference to some aspects of the COI Report, it conveniently ignored the more relevant information and it simply pretended that the IMF had nothing to say about SUGAR.

The historical perspective, with its hefty portion of inaccuracies, and its listing of problems represent more than 75% of the paper. The section dealing with the future of SUGAR is skimpier than the bikinis that are just lines on almost naked women that leaves little for the imagination. In fact, there is little for us to imagine or speculate on, whether it is the skimpy bikinis or the White Paper on Sugar. It is clear, SUGAR is being downsized to begin with, and, three estates will continue, but without plans on making them more efficient and profitable and for diversification, these will also be thrown aside.

Diversification has always been a much-touted plan for GUYSUCO. The White Paper ignored any discussion of disastrous 1980s diversification schemes. Yet, the elephant in the room is APNU+AFC’s much touted plans in various public engagements to resuscitate some of these same failed diversification plans. Are these still being considered?

The PPP’s approach on diversification in the 1990s to 2015 was diversification of sugar-based products, as opposed to the PNC/APNU+AFC plans which diversifies into non-sugar areas. For example, the PPP sought to add value by reducing bulk sugar production while increasing packaged sugar – Demerara Gold and other branded packaged sugar products and bottled molasses. The White Paper ignores completely the Blairmont and Enmore sugar and molasses packaging plants. These are profitable value-added sugar products for CARICOM and other markets around the world. Is it an oversight or deliberate because it does not fit the narrative for closing SUGAR?

The PPP’s diversification plan included production of ethanol to meet, first, the demand of the local market as legislation was being prepared to mandate ethanol-based gasoline for all vehicles, with at least 10% ethanol as a requirement at all gas-stations. A prototype ethanol plant was established at Albion and showed that ethanol production was feasible and could add-value to sugar. Nothing was said about this important venture. Again the question is asked why? is it because there is no plan and a closed SUGAR industry will not allow this?

The White Paper conveniently ignored real questions about consolidation of estates. Already, Uitvlugt has demonstrated that transportation of canes from Wales to Uitvlugt is filled with problems – transportation of cane to the factory has increased cost of production. The same will be true for canes from most of the Rose Hall cultivation to Albion. In spite of GUYSUCO’s denial, Providence cane cultivation which is part of the Rose Hall estate was closed since the end of 2015. Albion which presently boasts the lowest cost of sugar production and the most efficient in terms of cane to sugar ratio will be transformed into a less efficient estate. It will be impossible to maintain Enmore/LBI cultivation since transport to any factory will be prohibitive.

Finally, the idea that GUYSUCO will continue to maintain Drainage and Irrigation in closed estates is a myth. The cost for maintaining the drainage and irrigation in the closed estate will become a cost that Government must take up. This is a cost that GUYSUCO has borne and it is now being recognized that this was included in the cost of production. GUYSUCO has always subsidized central government and local government in Regions 3, 4, 5 and 6 when it comes to maintaining D&I. The same can be said about health. GUYSUCO has provided primary health care for its workers forever. Now this will become a cost on Government.

The White Paper confirmed downsizing, setting-up SUGAR for closure, just as APNU+AFC promised in 2014 when at least twice at APNU press conferences they declared that SUGAR should be closed. Terms such as consolidation, diversification, re-engineering etc. are dog-whistles for CLOSURE of SUGAR. The White Paper gives effect to the 2014 position. It makes a mockery of the promises that Granger, Nagamootoo, Ramjattan, Trotman and Charandass made to sugar workers and Guyana during the 2015 election campaign when they said that SUGAR was “too big to fail”. Sadly, the White Paper is merely a political prop to disguise the lies that these men told the workers.



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