Tony Vieira's Comments
18 October 2017

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Sugar Quota
(Aired 24 June 2005)

     Guyana has completely missed the boat in sugar, it now finds itself hopelessly mired in missed opportunities, wasted money, poor administration, high wages, and a production policy based on politics which has rendered it uneconomical to operate.

    We produce around 325,000 thousand tons of sugar a year. Our production cost was around G$60,000 a ton in 2004. We have guaranteed markets for 166,992 tons of sugar 51.33 % of our total production in the European Union's main protocol, at a preferential price of G$104,305 a ton, we have another 14,212 tons or 4.37% under the European SPS protocol at G$90,000 per ton and we have a US quota for 18,183 tons or 5.59% of our production at a preferential price of G$72,515 per ton. This is a total of 199,383 tons of sugar a year at a total price of 20 billion dollars. In other words around G$100,000 a ton.    

   If we were to limit our production to this amount of 200,000 tons a year, the sugar industry would be making G$40,000 a ton profit on 200,000 tons that is G$8 billion a year. We buy our local sugar consumption for G$46,000 a ton about 10.5 % of production below the cost of production in Guyana but 20,000 higher then the world market price and we are selling sugar to Caricom and the world market at far less than our production cost.

   So I want someone to tell me why we have continued to force the production of 335 thousand tons of sugar a year knowing that 135 thousand tons of it will incur a loss of over G$20,000 per ton, a guaranteed annual loss of G$2.7 billion dollars a year.

   The PPP have doggedly refused to address this problem, they have insisted on keeping the Demerara estates open, basically because they are incompetent to come up with an alternative to sugar production in the Demerara region which would create employment for the Demerara sugar estate workers who are their supporters.

    So for the past 8-10 years we have been selling nearly 40 percent of our sugar at a loss i.e. this nation due to lack of creative management strategies has been sustaining losses of over 10.7 billion dollars a year in the sugar industry since we are turning an 8 billion dollars a year profit, into a 2.7 billion dollar a year subsidy and loss.

    In other words even though the industry knows that it is guaranteed to make a loss the government cannot come up with some sort of alternative plan to diversify and create work for the Demerara sugar workers and have no long term plan, or even a long term vision, for the industry and I have no doubt that they will be forced after elections next year to put all the Demerara sugar workers, after they have voted for them, on the road or continue to employ them at substantial national losses to the rest of us. Now ladies and gentlemen Mr. Jagdeo must be fair, we must force him to be, if he cannot subsidise the Bauxite Industry then he must not subsidise the Sugar industry.

   So we have squandered time and money, since we knew that this day was coming but those who manage our affairs, were too ignorant to do anything about diversifying the industry to ensure its future, and we would have had the money to do the diversification over the past 8~9 years since we would have had the profits of the sugar industry in our pockets, now we have squandered large amounts of money trying to keep a doomed industry alive, we will probably have to borrow more money trying to ensure its uncertain future.

   All of the Demerara estates are below the level of the Lama and Boerisiri conservancies, all of them can be flooded by gravity, why have we not had even one aquaculture experiment on any sugar estate in Demerara? Why have we not invited the Japanese who are the best in the world at the fish farming business to join us in a joint venture to develop an aquaculture system in the Demerara Region? Why have we not looked at alternative crops that can be grown on the cambered sugarcane beds in Demerara?    

    Why have we not explored the possibility of growing sugar cane in the back lands of the Demerara sugar estates to produce alcohol and not sugar? alcohol production is less fuel intensive than sugar production and will create excess bagasse which can provide fuel to supply the energy requirements to power the pumps which can aerate the water in the front lands in the aquaculture farms, so we would have a hybrid system, grow sugar cane in the back to produce cheap alcohol energy to power the aeration pumps necessary to produce fish in the front. I spoke to a high official in the Ministry of Agricultural and to my utter astonishment this man did not know that to do aquaculture in the sugar estate fields you had to pump air into the water. Any fool with an aquarium knows that, surplus alcohol fuel can be used to supplement the gasoline to power our cars.

    The Dutch have left us with the layout to do all of this, lands that can be flooded by gravity not one pump would be required in any part of Demerara to grow fish, cheap transportation in and out of the fields by water, 10 acre fields which are like ponds capable of being flooded individually, an annual rainfall and a conservancy system [if properly rehabilitated and managed] that is capable of supplying an abundance of water, everything we need to become a top aquaculture producer in the world.

    So what is holding us up? Total incompetence, that's what is holding us up. That is why we have no wealth, that's why we have no peace, that's why we have no prosperity.  

   Tilapia is selling in New York for nearly $8 US a pound why do we not see the potential of all of this?

    Of course we can't expect Satadeo Shaw to solve this problem, he is not competent to do it and Tate is here to make sugar, the more the merrier for them, since they are paid higher amounts as management fees the more sugar we make, so they would have to renegotiate their contract if the exigencies of the situation demanded closing down 40% of our production; but at the very beginning when Desmond Hoyte's government sat down with Tate to work out the management deal for our sugar industry, they told him that all activity not associated with sugar must be carried on by someone else and not them, that is why everything except sugar cane disappeared from the sugar estates.

  As things now stand we are totally unprepared to meet the challenges that lie ahead and because we have not prepared for it, we will go the way of the dinosaur.

    This Government can run and cry to who they want to, now that the fan is spitting back what has been thrown at it, but they have put nothing in place, they have established no will or intelligence to show the Europeans or the world that they are willing to come off the bread wagon and try something new by using the profits I say we have squandered over the past 8-9 years in sugar to build hydropower facilities to fuel this country's need to generate cheap power to increase our capacity for manufacturing and mining, no, that would have taken too much intelligence, they sat on their hands and did nothing; so when the Europeans ask us "what have you started experimenting with to become self sustaining in time so that even if we were predisposed to give you a break we would know what amount of time you needed to complete your diversification programme to aqua farming or any other manufacturing enterprises you have started, what are we going to tell them?

    That we have done nothing! That we were hoping that they would continue to finance us indefinitely! That it is the British's and European Union's obligation to keep giving us gifts and subsidies in perpetuity! You know the answer to this question already ladies and gentlemen.

    The cost of power in this country of unlimited hydro power potential is crushing us, manufacturing is dying, everyday businesses are closing their doors, all commerce is literally collapsing around us but our President is training thousands of young Guyanese to become tradespersons, all of which sounds really good approaching an election, until you ask yourself what jobs does he really have for them? Then you see the light.