THE PROBLEMS IN THE SUGAR INDUSTRY – SOME PERSPECTIVES


At the opening of the Skeldon Sugar Factory, President Jagdeo said that in considering the options, the Government realized that sugar was too big to fail. The number of families relying on the industry was too large, its contribution to the economy too great. The President said that the option of privatization was ruled out and the only alternative was investment by the State. He pointed out that in the era of neo-liberalism it was tremendously difficult to convince the World Bank to support such a project. Finally, however, the Government prevailed and, the President argued, its wisdom of protecting large industries has been vindicated by the recent policies of industralized countries in protecting industries ‘too big to fail.’ Above all, sugar could be profitable. The Skeldon Factory was designed to produce sugar at US12 cents a pound. The world price was at one time US22 cents a pound. But the bulk of Guyana’s sugar sold outside of its traditional markets will be sold in added value form at far higher prices than the world market. This price has been dramatically reduced.

Sugar generally, and the Skeldon Sugar Factory in particular, face enormous challenges. The President mentioned several of them. These include the restoration of management capacity and efficiency, the deployment of innovative initiatives to increase the supply of cane, industrial stability, the development of new products with added value, establishment of downstream industries and more. Sugar, he said, must pay its way and contribute to the national treasury. The opening of the Skeldon Sugar Factory gave hope that despite the daunting challenges, sugar is on its way to even greater heights.

I wrote the above some time ago in an article “Too Big To Fail.” What has happened since then?

The Skeldon Factory has experienced enormous technical problems and the supply of cane has not lived up to expectations. The result is that with the closure of the old Skeldon Factory, now a bad decision in hindsight, the production of sugar and earnings have declined dramatically. Sugar workers have had to do with less than normal increases and this has created great aggravation among GAWU members. There have been two devastating strikes recently in response to what GAWU says is less than adequate wage and salary increases. Guysuco says that it cannot afford to pay. Strikes and poor industrial relations are now sources of deep concern.

At this time a large number of canes have been left in the ground. If they had been harvested, Guysuco would have been far closer to reaching its target. The main reason for the shortfall in harvesting is that the turnout of workers is low. Workers do not turn out to work for a simple reason – they earn more elsewhere or they believe that the pay offered does not adequately compensate them for the labour they have to expend. No expert is needed to determine this. Also the reduction in price of sugar has bitten deep.

We therefore had a classic chicken and egg situation. Workers do not turn out because the wages are too low. When workers do not turn out the canes cannot be cut and Guysuco loses. If we go back to the 1980s when Booker Tate was first retained by Guysuco on a management contract, a similar situation was faced by Guysuco – the turnout of workers was too low as a result of which all the canes available were not harvested. Guysuco increased wages dramatically. This was not the only development but, combined with other factors, it resulted in increased production and a return to viability of the industry.

The current situation has been characterized by a degree of bitterness and hostility which has resulted from the frustration being faced by everyone. In this situation decisions can be taken, words can be said, acts can be done, which can irreversibly intensify anger, result in charges and counter charges and make it more difficult for discussions to take place to resolve differences. The time has come for the parties to sit down and talk about their problems, the future of the sugar industry and how to get the workers back to work and to resolve the problems at Skeldon.

The parties are all persons of goodwill but they are all frustrated with the situation in the industry and with each other. The time to talk the issues through is now. (www.cameronandshepherd.gy).

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