Private cane farmers were sued by banks after APNU/AFC closed sugar estates

Agriculture Minister Zulfikar Mustapha

Among the hardships that sugar workers faced when the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government closed down the estates, private cane farmers who had formed joint ventures and had their livelihoods snatched from them with the closures, were sued by banks after inevitably defaulting on their loans.

This was revealed from the answers to questions raised by Opposition Member of Parliament, Annette Ferguson, in the National Assembly. Agriculture Minister Zulfikar Mustapha, who responded to the questions on notice, provided details on the Guyana Sugar Corporation (GuySuCo) workers severed between May 2015 and August 2020.

In total, 5262 workers were severed when the estates closed. Most of them, 1830, were from the Skeldon estate, followed closely by 1589 from East Demerara (Enmore), 931 from Wales and 912 from Rose Hall. When the 1785 temporary workers are counted in, it means that the closures affected a total of 7047 workers.

But Mustapha went on to also reveal the struggles of the private cane farmers, who number in the hundreds and come from communities such as Canal No 1 and No 2, as well as from across the West Coast of Demerara and the Corentyne Coast.

“To appreciate the total and diverse impact of these large-scale dismissals and the closure of estates, one must also appreciate the thousands of other persons who depended directly on the estates and upon the income of the sugar workers for their own livelihood.”

“This would take the number into thousands. In fact, dozens of private cane farmers on the Corentyne Coast had joint venture agreements in writing with these estates to supply sugar cane. These operations were financed by commercial banks in joint venture arrangements.”

According to the Minister, the closure of the estates naturally led to these contracts being defaulted on, and a number of commercial banks have sued the private farmers, seeking hundreds of millions of dollars. The legal proceedings, according to the Minister, are pending in the High Court.

“The income from these sugar workers and the revenue stream from these estates contributed significantly to the village economy of dozens of communities affecting the lives and livelihoods of thousands,” Mustapha said.

“For example, grocery shops, restaurants, bars, markets in the villages and many other undertakings in these communities depended upon the income generated from these estates. All these activities suffered a tremendous blow by the dismissal of over 7000 workers and the closure of these factories, affecting several thousand lives and livelihoods.”

It was announced recently that final adjustments are being made to the Rose Hall Sugar Estate in Region Six (East Berbice-Corentyne), as it will be making a comeback by mid-September to recommence sugar production.

The Government’s efforts to reopen the Rose Hall Estate saw a whopping $1.1 billion being expended this year to have the facility up and running. A summary of the major works included both civil and structural interventions – including rehabilitation of the cane gantry, pre-milling, milling, boiler and process house roofing. There was also the replacement of a vacuum pan, condenser structures, a chimney, and servicing of all equipment.

The Rose Hall facility is one of four estates that were closed by the APNU/AFC coalition after it took office. Back in 2016, the former Government closed the Wales Estate, and the following year, shut down the Enmore, Rose Hall, and Skeldon Estates, putting over 7000 sugar workers on the breadline. The downsizing of the sugar industry resulted in only the Uitvlugt, Blairmont, and Albion Estates in operation.

After taking office in 2020, the People’s Progressive Party/Civic (PPP/C) Government had announced in the Emergency Budget presented in September 2020, that some $5 billion would be injected into the sugar industry for the phased reopening of the closed estates. Since then, sizeable allocations have been made to return the sector to its former glory.
GuySuCo was allocated a further $2 billion in Budget 2021 by the PPP/C Government for capital works to be undertaken at the various estates to help in the turnaround of the sugar industry. Then last year, GuySuCo received $1 billion in supplementary funds from the Government.

GuySuCo was allocated $4 billion in the 2023 budget to begin construction of the Albion Sugar Packaging Plant and to expand the capacity of the Blairmont Packaging Plant among other significant undertakings, which will increase the value-added capacity of the sugar company.

The PPP/C Administration has invested more than $10 billion in the plant and equipment, rehabilitated cane fields at all factory locations, and fostered private-sector partnerships to increase land under cultivation in the sugar industry.