Shutting down sugar estates was transformational – Ramjattan

The Opposition on Tuesday rejected additional funding for the Guyana Sugar Corporation (GuySuCo), with former government Minister Khemraj Ramjattan praising the former APNU+AFC government’s decision to shut down four sugar estates and send home thousands of sugar workers.

“What was transformational was the right-sizing of the sugar industry…,” Ramjattan said during the 2023 Budget Debate, as he argued against the additional funding of $4 billion in subvention earmarked for the sugar industry.

“If it is going to drag an economy down, we had to make the correct decision – that was transformational,” he declared.

Ramjattan said the decision of his APNU+AFC government to close the estates and put 7,000 workers and their families on the breadline was rooted in the reasoning “that you don’t pour good money behind bad sectors… billions and billions of dollars.”

The former government closed estates at Skeldon and Rose Hall in Berbice, Enmore on the East Coast of Demerara and Wales on the West Bank of Demerara shortly after it was elected to office in 2015.

The factories were left abandoned and “billions of dollars in machinery and equipment were left to the elements, and over $2.5 billion in valuable standing canes were left to rot in the fields,” Minister of Finance Dr Ashni Singh had said in his budget speech two Mondays ago.

Since returning to office in August 2020, the current PPP/C government has poured $10 billion into the industry to reopen the estates.

But Mr Ramjattan insisted that “to spend so much money on sugar is pouring good money behind bad.”

Minister of Health Dr Frank Anthony defended the government’s spending on the sugar industry and blasted Ramjattan for his position on the sugar industry spending.

“When we try our best to resuscitate the industry, to give people a livelihood, to bring back dignity to those families, every time he (Ramjattan) comes here and he would say here and say that we are throwing good money after bad money,” Anthony stated.

The current government has said it is committed to the revitalisation and restructuring of the sugar industry to support a diversified and modernised sector, ensuring its sustainability and economic viability.

Government sought to reenergise local economies through the re-hiring of 1,479 workers and delivery of a $250,000 cash grant to severed sugar workers.

In 2022, the government advanced the recapitalisation of the Albion, Uitvlugt and Blairmont Estates and remodelled the marketing and sales mix to move away from the sale of raw bulk sugar to packaged, higher value-added sales.

In 2023, the sugar growing subsector is projected to recover and expand by 29.3 percent, as GuySuCo anticipates higher performance from the existing estates, combined with forecasted production from the reopened Rose Hall estate later in the year. The Corporation expects output of nearly 61,000 tonnes of sugar this year.

Last year, sugar sector is estimated to have declined by 18.9 percent in 2022, with sugar production for the year totaling 47,049 tonnes.

“This performance was largely the result of lingering effects of the 2021 floods, which caused lower yields per hectare and reduced cane quality, as well as technical challenges encountered in the first half of 2022,” the Finance Minister stated in his budget presentation.

Over 1,400 sugar workers of Uitvlugt, who were affected by the Estate downtime, were provided a one-off payment totaling over $277 million.

The $4 billion allocated to GuySuCo this year will go towards the start of construction of the Albion Packaging Plant and expansion of the capacity of the Blairmont Packaging Plant.

The government has also targeted the acquisition of a drying machine to improve the quality of packaged sugar and a stick packaging machine to offer a new smaller packet of sugar to meet the needs of premium markets.

Additionally, it is anticipated that grinding operations at the Rose Hall Estate will commence in the second crop of 2023, in keeping with the government’s commitment to resuscitate the sugar communities and to create employment for persons within the villages where estates were closed.

Further, GuySuCo will continue to roll out its mechanisation programme and procure conversion equipment that will contribute to improved productivity.