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Is sugar “too big to fail?”

Last Updated on Saturday, 26 December 2015, 20:59 by GxMedia

Minister of Agriculture Dr. Leslie Ramsammy

The government’s contention that too much rides on the struggling sugar industry’s survival to allow it to fail has not plucked on the heart strings of the opposition during the budget debate.

The administration has said some 18,000 persons are directly employed in the industry with another 120,000 benefiting indirectly and it has earmarked a $6B allocation to assist the Guyana Sugar Corporation (GuySuCo) recovery.

“Too big to fail” is the American phrase that has been adopted to describe GuySuCo but the opposition, which had last year cut a similar allocation for the corporation, seems inclined to repeat the act.

APNU’s Agriculture Shadow Minister Dr. Rupert Roopnaraine told the House on Thursday that while the government’s argument might be compelling it was not enough to give the subvention a free pass.

“If he wants this subvention to be approved – a total of $11B in three years – the Honourable Minister of Agriculture is advised to present to the Committee of Supply a viable plan for lifting GuySuCo out of its indebtedness and production rut,” he said.

“The government will have to explain what about the industry’s circumstances in 2014 necessitates a whopping $6B compared to $1B in 2013 and whether there was any certainty of recovery in the short to medium term.”

Dr. Roopnaraine also called for an explanation of the funds received from the European Union in lieu of preferential access to those markets which ended in 2007.

“If we are serious about salvaging the sugar industry we must go beyond putting plaster on the sores, we must go to the root of the disease,” he stated.

Agriculture minister, Dr. Leslie Ramsammy, who spoke immediately before Dr. Roopnaraine had said GuySuCo was about to rebound and that 2014 would mark the turning point.

“After three years of failing to reach its targets, GUYSUCO is set to meet its 2014 target. In the first five weeks, GUYSUCO has already reached 45,000 tons or an average of 9,000 tons per week. By the time, we get to the budget estimates, GUYSUCO would have surpassed its 1st crop of 2013 and still have five weeks of production ahead of it for the crop. Who says sugar is dead?” he declared.

According to the minister, every estate was performing within reach of its target and even the beleaguered Skeldon Sugar Factory had seen improvement. Dr. Ramsammy said the $6B subvention would be geared towards the industry’s mechanization drive.

“Land conversion costs will account for $1.1B with 2,500 hectares of land slated to be converted in 2014. Another $1B will be expended on the tillage and replanting programme this year with 9,600 hectares of land to be tilled and 9,224 hectares to be planted. Investments will also be made in legume and flood fallowing programmes to further enhance cane yields,” he said.

Additionally, money will also go to the corporation’s capital expenditure programme for all-weather roads and the purchase of agriculture equipment.

“A portion of the $6B will be spent on capital programmes in our factories. These programs include replacing old and outdated pumps, improvement of factory automation at Albion, works on the two punt dumpers at Skeldon and the upgrade of boilers at Uitvlugt,” Dr. Ramsammy said.

According to the minister, sugar will continue to be a major pillar of Guyana’s development. The ruling PPP/C draws a significant portion of its political support from the sugar belt.