APNU, AFC fail to block $6B subsidy

… under pressure from sugar workers

By Vanessa Narine, April 9, 2014, Source

Minister Dr Leslie Ramsammy in the National Assembly last evening

THE $6B allocation to the Guyana Sugar Corporation (GuySuCo), which was the source of some controversy, was passed unanimously last night in the National Assembly, but not without a gruelling hours-long line of questioning directed towards Agriculture Minister, Dr. Leslie Ramsammy. Following the approval, Ramsammy told the media that sugar is “too important” for it not to be supported, so that it can both turn-around and continue as one of the most significant contributors to the local economy.

He said, “I am glad that we were able to provide the assurances because it would have been a mistake to cut the GuySuCo budget. Even if we have concerns about GuySuCo, we should be addressing those concerns, finding practical ways of addressing them…sugar is not dead.”

According to him, last night’s unanimous approval indicates that despite the fact that there are disagreements, the political parties can work together and not be disagreeable on matters of such national importance.

The Minister, in response to a question from Shadow Finance Minister, Carl Greenidge, committed to providing the National Assembly with quarterly reports of the spending of the $6B allocation to the sugar industry.
He had urged the passage of the allocation, maintaining that it is a necessary expenditure to support the industry in its turn-around.

Greenidge also called for a revised strategic plan, in light of the ongoing challenges and the subject Minister committed to having this completed by June.

EXPENDITURES
Greenidge had recommended the reduction of the $6B, considering that the revised plan would not be completed until mid-year. However, Ramsammy made it clear that the $6B is intended to go toward expenditures that must be incurred this year.

“We have to put things in place now…the allocation is needed. I would urge to pass the $6b we are requesting because I think it is absolutely necessary that this investment is made,” the Agriculture Minister said.

Greenidge questioned what needs to be done to get back on track, and the Minister noted that the areas of expenditure under the $6B allocation will go a long way to addressing what needs to be done.

He noted that these expenditures include: mechanization, through the conversion of 2,500 hectares of land to be suitable for mechanical operations, which will be done at a cost of $1.1B; tillage and replanting of 9,200 hectares, both efforts being consistent with improving cane production and yield, which will be done at a cost $1B; factory upgrading of all sugar estates, including Skeldon, at a cost of $2B; and works to field infrastructure to improve field to factory access and purchasing of equipment, excavators, bell loaders, tractors, etc. to account for the remainder of the allocation.

The Minister committed to providing a breakdown of the $6B expenditure by estates and by area of expenditure.

Ramsammy also fielded questions on the Skeldon factory and estate and its share of the $6B allocation, noting that some $500m will go towards Skeldon.

“A lot of work has been done at Skeldon…in the $6B allocation is included work to the estate and the factory,” he said.

A Partnership for National Unity (APNU) Member of Parliament Keith Scott, questioned when the “bailouts” will end, and Ramsammy underscored that this was what the $6B allocation is going towards – to support the industry in its turn-around.

He said, “In terms of coming back to house, throughout history of sugar, it has not needed support, this is one period…we are hopeful that as soon as possible we can have the industry turn-around, we are working towards GuySuCo not requiring our help.”

Ramsammy added that GuySuCo is measuring its progress in the turn-around process against specific milestones, with the ultimate goal being a production of 350,000 tonnes by 2017.

“We are fixing short term and medium turn to take us to where we want to be in long term,” he said, reiterating that the investment of the $6B is much needed.

APNU’s Shadow Agriculture Minister, Dr. Rupert Roopnarine, made it clear that his party’s position is that cast iron assurances must be given in terms of the sugar industry having a strong strategic plan.

Ramsammy reiterated that a revised plan will be completed in June.

NEW BOARD
The combined Opposition also honed in the urgent need to have a new Board of Directors appointed, given that the life of the current board was extended by six months to June 30.

Roopnarine stressed the need for the board members to be professionals and questioned the criteria for appointment, particularly since there is a need for reform of the management of GuySuCo.

Ramsammy explained that the new Board will be appointed come July 1, and currently President Donald Ramotar is looking at a number of recommendations for “radical” changes.

He added that the Head of State is engaged in talking to people who have been recommended and assured that the focus is on persons who will bring experience in the industry, business and marketing, agronomy and mechanization, because these are the issues the industry battles.

“The President is discussing all of the options at hand….I believe the new Board will find favor with both sides of this House,” the Minister said.

Greenidge welcomed this and stressed the need for a “professional board, not a politicised board” to provide much needed competent management.

Other issues that were questioned were GuySuCo’s indebtedness, a breakdown of the expenditures for 2012 and 2013, the expenditures at Skeldon Estate, and the production levels at the different estates, particularly Skeldon.

The $6B allocation to the sugar industry, battling climate change and other challenges, was hit in day one of the 2014 Budget debates with Opposition MPs maintaining that the monies represent a handout and contending that good monies are being thrown after bad.

Despite its challenges, the industry, according to Government, remains relevant to the health of the national economy. In 2013, sugar exports accounted for 8.3 percent of total exports valued at US$112.2M and the industry contributed 3.9 percent of the country’s GDP.