THE FUTURE OF THE GUYANA SUGAR SECTOR: – OPTIONS FOR A BETTER, BRIGHTER FUTURE….ECONOMIC DIVERSIFICATION FUELLED BY INNOVATION – A VIEWPOINT BY MIKE SINGH

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The local sugar sector of Guyana which has been ailing for quite some time now has reached the most critical cross road in its history which spans at least three hundred years when the Dutch and later British colonists introduced this crop to the shores of the country. This sector has played a very historic role in the evolution of contemporary Guyanese society as its demands for labour fuelled the dreaded Atlantic slave trade, the importation of Portugese, Chinese and East Indian indentured labour.   There was even at one point a short-lived colony of some Germans from Mecklenburg Schwerin – most of whom perished due to malaria and other tropical ailments.

The sugar sector also played a pivotal role in the fight for political independence therein pitting the interests of organised labour against those of the plantocracy and in the process getting the sugar worker’s vote was considered critical in winning any election in Guyana so this critical mass evolved in that of ‘a sacred cow’ so to speak. The fortunes of the local sugar sector have changed from a once guaranteed market in the EU under the various trade schemes such as the Cotonou & Lome Agreements.  Regrettably, Guyana failed like so many other Third World nations to see the proverbial ‘writings on the wall’ by taking cognisance of the fact that the industry, market conditions and the global dynamics of the commodities sector had changed drastically.

In the historic narrative it is therefore incumbent upon me to point to a sad parallel in that the early 1900’s – late 1930s, present day Malaysia thought that it was the king of the global rubber trade because a large percentage of the world’s top balata producing plantations were located on the Malay peninsula and as such the worlds was at their mercy. The advent of World War II and the subsequent occupation of most of SE Asia by the imperial Japanese forces meant that this once readily available commodity was now in the hands of the Axis powers. In short, this led to the development of industrial grade synthetic rubber by the BF Goodrich Company in Ohio which in turn guaranteed an affordable supply for the Allied war effort.

Today, there are no more rubber plantations in Malaysia of an industrial magnitude as more than 90% are now active palm oil production facilities thus proving that sunset industries can be transformed via new centres of excellence fuelled by hope, innovation and thought leadership. Over the past twenty five years, most major manufacturers and end users of raw sugar have moved away to the large scale adoption of synthetic or artificial sweeteners such as aspartame, saccharin and even a plant derivative known as stevia and honey derived from cactus. This has drastically reduced the demand for raw sugar thereby placing a downward pressure on world price which in turn has resulted in several countries in the Caribbean Region such as St. Kitts & Nevis and Trinidad & Tobago getting out of sugar all together whilst larger producers as Guatemala, Cuba, Brazil and India have achieved economy of scale based upon improved plant and soil husbandry, increased mechanisation and reduced production costs fuelled by large internal market demands (in the case of India & Brazil).

Guyana does not possess the economy of scale to compete with the above referenced countries and so as a matter of urgency must seek to exit this huge, loss making industry by looking immediately – (not next week, next month or next year) as viable, long term alternatives because it is absolute insanity to continue to produce sugar at a reported US$0.40 per pound and be selling at US$0.18 per lb. In fact, no self respecting private company will ever go down this road of economic damnation so why should overtaxed Guyanese be expected to continue to subsidise ‘a failed entity’. Is it simply for votes?

VIABLE LONG TERM ALTERNATIVES:

1.       The divestiture of all GUYSUCO lands into a public-private partnership consisting of primarily overseas investors that have a proven track record, requisite capital, technical expertise and global best practices required to aggressively transform the sugar sector into an alternative large scale producer of value added agro products, goods and services.

2.       The lands can then be quickly transformed into “centres of agro excellence” in the following areas:

  •         Large scale cultivation of avocadoes, passion fruit, citrus, cashew nuts and quinoa.
  •         Acqua Culture – freshwater farming of tilapia, hassar and tiger prawns.
  •          Mega Dairy Farms capable of not only producing fresh milk but also butter, cheese and yoghurt.

3.        Global Markets & Branding: In all instances these products can be certified as being organic and thus qualify under the various standards of FLO International (FAIRTRADE) and thus being guaranteed shelf space ats such supermarket giants as Whole Foods under the ‘ethical consumerism and sustainably harvested’ models as well as being Halal and Kosher.

These products will also be able to enter the CARICOM Region, the US and CANADA under existing free trade agreements.

4.       Technical Expertise & Global Best Practices: Given the paucity and horrifying absence of trained, qualified and competent human capital required to lead such an ambitious initiative – knowledge transfer and training will be immediately required from Israel which has done similar wonders in Kenya & Tanzania which today have cornered the European markets for year round supply of fresh fruits and vegetables. The Israelis are the undisputed global leaders in tropical agriculture and have been active in Latin America for the past three decades and are single handedly responsible for the successful development and transformation of the agri-sector in Brazil, Mexico, Colombia, Chile & Peru.

5.       Labour Supply: Given the alarming fact that Guyana continues to loose an incredible amount of human capital to both legal and illegal migration as recent indicators from the US Embassy (between 2010-2014 – more than 24,000 migrated permanently to the US) and if one were to add another 10,000 minimum that left for Canada (excluding the Caribbean) then it is fair to say that Guyana lost 35,000 persons from 2010-2014.

6.       IMPORTATION OF LABOUR: Out of a total estimated population of 750,000 having lost 35,000 then what can Guyana conceivably do with 700,000? In short, it will need to import at least 100,000 persons as part of a resettlement programme geared towards agri-diversification and a readily available pool of such labour is available in Haiti – a fellow CARICOM member state.

In fact, the Dominican Republic is considering the expulsion of 250,000 persons of Haitian descent and Guyana can easily resettle them with the funding and support of the United Nations High Commission for Refugees (UNHCR), UNICEF and various other charities including the locally based Demerara Charitable Foundation playing a pivotal role as the designated NGO as it has the linguistic skills, cultural understanding and team to communicate with and successfully integrate the Haitians into contemporary Guyanese society as proud, productive citizens of this great and promising land.

The above is a simple, concise, clear cut plan of action that requires nothing but visionary leadership, bold thinking and innovative execution to save the jobs, livelihoods of more than 16,000 unskilled labourers and an attendant 100,000 additional persons that will be affected in some way, shape or form. Failure to act now is only serving to put off the inevitable which will be immense socio-economic fallout and other impending, unintended political consequences.

MIKE SINGH 

GLOBAL BUSINESS ANALYST & ICT GURU-AT-LARGE

 

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