Georgetown, Guyana – (September 4, 2018) Minister of State, Mr. Joseph Harmon, today, said that the issues of the Guyana Sugar Corporation and the sugar industry are not taken lightly by the Government of Guyana as he noted that the Government has a clear direction in which the industry must go. Further, he noted that the Government has undertaken to ensure that outstanding severance payments are made to sugar workers before the end of the year.
Speaking at the opening of a one day Conference convened by the Guyana Agricultural and General Workers Union (GAWU) at the Grand Coast Inn, East Coast Demerara, Minister Harmon, who was asked to speak on the Government’s position with regard to sugar, said that all of Government’s efforts, since its assumption to office in 2015 have been focused on consolidating the sugar industry so that it can eventually become financially viable.
“It is important that we put issues on the table as a nation and this is why, I said that I will be here because I feel that we as a nation, we need to put issues on the table and address them frontally. I have seen a couple of letters in the media concerning the Government’s position on sugar. I have heard Mr. Komal Chand this morning himself on the Government’ position on sugar that it is not clear and so on. I will posit that the Government’s position has been extremely clear from the start when we came into office. The theme of today’s Conference is “Sugar-too big to fail”. The phrase “too-big to fail” means or may be applied to an entity or business that is so important that its principals must take measures to prevent it from going bankrupt or out of existence. If there is an entity in Guyana that suits this definition, it is GuySuCo and by extension, the sugar industry,” Minister Harmon noted.
The Minister of State noted that when the Government took office in 2015, GuySuCo had a debt of $82 billion; US$ 82 million of GuySuCo’s reserves invested in the Skeldon Sugar estate and US$112 million in loans committed to its extension and development. This Skeldon Project, which he said, failed to achieve its most basic objectives, was operationally inefficient and in the process of its implementation, created a drag on the other sections of the sugar industry. This, coupled with high levels of inefficiency across the rest of the industry with huge declines in both cane yields and factory recovery, resulted in severe financial difficulties, in fact the industry only survived because of the massive injections of subsidies – some $32 billion dollars of State resources from 2015 to date.
“Being faced with these realities, which we inherited as a Government, we made a decision that this important national institution and the largest single employer in Guyana, needed a closer look at it and a carefully considered policy to ensure its survival and a return to viability. This was clear to us because besides the reports, writings, political ‘back and forth’, statistics, numbers and technical arguments, we were dealing with lives, real human situations that translated into ‘day to day’ bread and butter issues. We therefore took the prudent decision to appoint a Commission of Inquiry into the Guyana Sugar Corporation in July 2015 to make recommendations on charting the way forward and returning the industry to financial viability,” he said.
Through this evidence based approach to policy making, which saw consultations with the Unions and other stakeholders, Minister Harmon said that the Commission made several important recommendations among which, were that the Corporation should be privatized within three years, a serious evaluation of all diversification options be conducted to avoid total reliance on sugar for GuySuCo’s revenues; an evaluation on the options for GuySuCo should be done; amalgamation of the Wales and Uitvlugt estates and assign all their cane to the Uitvlugt factory which was operating at 50 percent capacity and the Corporation should divest itself of the Skeldon estate.
Despite these recommendations by the Commission, Minister Harmon said that the Government opted to ask GuySuCo to come up with a Plan of Action based on these recommendations and how the issues identified will be dealt with.
“After many weeks, GuySuCo came up with a Plan of Action on how they will deal with these issues. The Plan was aggressively interrogated by the Cabinet and eventually a document was put out. That document in itself became the basis of Government’s position, which was laid on the table with the Unions, with the political Opposition, with the representatives of the estates. That is what we called putting the issues on the table. GAWU put their issues on the table. NAACIE in fact said that they concurred with the position of GAWU. The political Opposition said they needed to have a study done. They never put anything on the table. So what we had on the table was the position by the Government and the position by GAWU. The Government then looked at these positions, put them together, extracted the main issues out of them together and prepared a State paper, which was laid in the National Assembly. That State Paper, Mr. Chairman, spoke to several issues, which we have to deal with. Apart from what GAWU has put on the table, there is nothing else coming from anybody else except for letters in the newspapers,” Minister Harmon noted.
The Minister of State noted that if Guyana is to advance, then issues would have to be placed on the table and discussed in a coherent and organised manner with the aim of arriving at a workable solution. He noted that this is what the Government has done as it has had several engagements with the various Unions and other stakeholders before a decision was made.
“We cannot await on a Conference or whatever form of Conference it is or a letter to the Editor to put our issues there. Study the issues and let us agree, let us discuss that and I believe that this has always been the focus of the Government; that we have to discuss these issues. Sugar is not something we take lightly. The issue of the condition of our sugar workers is not something we take very lightly and so when the issues of severance came up, we invited the Unions again to consultations. GAWU and NAACIE were invited to consultations in 2018 on the question of severance and what were some of the issues as it related to the workers. Again, at the table, sitting in the Cabinet room and GAWU and NAACIE made their positions very clear. I must say that at every point along the way that there have been aggressive representation on behalf of the workers by the Union. Not only the Unions were there, the representatives from the factories were also present and they made their positions clear as well. Whatever shape or form we arrived at, consultation has always been the bedrock of what we do as a Government,” he said.
In addition to these consultations and arising out of some of the foundations of the State Paper, a Special Purposes Unit for sugar was established with some very clear guidelines as to what is to be done about divestment, what is be done about sugar lands and what is to be done about the valuation of some of the Corporation’s assets going forward, he also noted.
“This is the Government’s view Mr. Chairman on the future of the sugar industry. We are of the view that the industry can survive and we wish to posit here that there is a distinct clarity on the way that the government has dealt and is dealing with the future of the sugar industry. We are committed to ensuring that it survives. The Government under President Granger, the entire Cabinet we want to wish this Conference here a success and to commit to continue working with the Unions and all stakeholders to ensure that this sugar industry survives and that the lives and livelihoods of those workers who continue to be in the industry and those who will be employed when the industry is divested in a certain way, that we will continue to ensure that the livelihoods of the Guyanese worker is of paramount consideration,” the State Minister stated.
The Conference was also addressed by President of GAWU, Mr. Komal Chand, Leader of the Opposition, Bharrat Jagdeo and Head of the Special Projects Unit, Colvin Heath-London.