By Alexis Rodney
WITH government indicating its inability to continually pump funds into the ailing sugar industry, the Guyana Sugar Corporation (GuySuCo) said it is hopeful that it would be less dependent on government subsidies by this year-end.
But before this is done, the corporation must receive the promised financing for its ongoing capital works, Board Chairman, Dr. Clive Thomas, said on Wednesday.
“The board has decided to use the subsidy to diversify the operations and seek to move the industry into a more viable and more self-sustaining one, so that there is a reduced dependence on subsidies by the end of this fiscal year,” Dr. Thomas told the Guyana Chronicle.
He is hopeful that the funds GuySuCo receives would move the corporation further into diversification.
The sugar industry has been marred by economic and production challenges and has been at the core of much debate over its impending down-sizing and what that could mean for thousands of sugar workers and their families.
But government believes that diversification of the sector would not only open avenues for new areas of production, but would also contribute to an economy from which it has been feeding.
On Wednesday, Dr. Thomas said the board continues on the road to diversification, all with the aim of the corporation becoming self-sufficient.
“We would prefer to give sugar the opportunity to see if it could make itself viable by going into diversification,” he said.
Government, he said, has been supportive and has been leading the way through the establishment of a “special purpose vehicle” to investigate the possibilities of diversification.
Government was also able to set up diversification and privatisation arms, which will both help to sell identified assets of the corporation.
Dr. Thomas said the situation at GuySuCo remains untenable and continues to evolve into a serious crisis, not only financially, but technologically and otherwise.
“It is undercapitalised and the entire major infrastructure in the industry has broken down, including bridges and culverts and fields. Industrial relations remain difficult, because the management and the union are not joined in a common effort to make the industry viable. They have in fact been tugging at each other and government has indicated its inability to continue the subsidies and without those the industry cannot survive,” Dr. Thomas said.
ALL POSSIBLE AREAS
To this end, he noted that the corporation continues to examine all possible areas of diversification.
They include aquaculture, aquaponics and seed paddy. He said GuySuCo is also trying to finance some of the measures by the sale of lands by the estate.
The Commission of Inquiry (CoI) conducted into the operations of GuySuCo recommended that the corporation be privatised within three years.
The commission recommended, also, that a serious evaluation of all diversification options be conducted to avoid total reliance on sugar for GuySuCo’s revenues. The CoI called for an evaluation of the options.
Agriculture Minister Noel Holder, addressing the National Assembly earlier this year said the future of the industry is considered to lie in a smaller sugar sector with reduced losses and cash deficits, but coupled with a separate and profitable diversified enterprise, which would ensure a viable future, while focus on the poorly-performing estates should shift from sugar to diversification.
The proposed courses of action are to amalgamate Wales Estate with Uitvlugt Estate and reassign the former’s canes to the Uitvlugt factory, since the estate is operating at 50 per cent capacity.
Sixty per cent of its drainage and irrigation infrastructure is in a dilapidated condition. The corporation furthermore seeks to divest itself of the Skeldon Estate. The estates of Albion and Rose Hall are to be amalgamated and the factory at Rose Hall is to be closed.
Meanwhile, addressing the performance of the industry, Dr. Thomas said 2016 was a “bad year,” principally because of El Nino and the effects of the industrial relations climate.
He said the effects of 2016 continued into the first crop of 2017, “but we expect that the second crop would come out far better than the first crop. We are hoping we could turn the corner on sugar production by the end of this year,” he told the Guyana Chronicle.