The radical re-organisation of the sugar industry is a matter of urgency, Finance Minister Winston Jordan said on Monday, even as he stressed that the economy continued to feel the “drag of dismal output” by the sector.
“The continued postponement of the hard decisions on GuySuCo’s future would result in the corporation incurring even more debts (estimated currently at $80 billion) and an escalation of the demands on the Treasury,” he told the National Assembly during his three-hour-long 2017 budget presentation.
For 2017, he pointed out, the government has made an allocation of $9 billion to support the financing of GuySuCo’s operations. This brings to $32 billion the amount of resources that would have been provided to the Corporation since August 2015.
Jordan stated that the status quo of the sugar industry can neither be “sustained nor maintained,” while pointing out that as currently structured the industry would require government’s support to the tune of $18.6 billion and $21.4 billion for the years 2017 and 2018, respectively.
“This is an untenable position, one that would seriously jeopardise the fiscal stance of the government, while compromising resource allocation to other critical and important areas. The stark reality of the situation is that money injected into sugar, in its current state, is money wasted; it would make no impact on the operating losses and cash deficit status of the industry,” he stressed.
He said that a Cabinet Sub-Committee has been established in recognition of the grave situation facing the sugar industry. Jordan explained that it is tasked with making definitive recommendations for implementation by the end of 2016.
This Committee, he said, has been examining all options and will make a full report to the Cabinet shortly.
Earlier, while making reference to the Agriculture, Forestry, and Fishing sectors, Jordan said that despite an encouraging recovery in 2015, sugar is projected to decline by 18.7 percent, to reach 188,000 metric tonnes in 2016. The low production is attributed to the El Niño dry spell experienced earlier in the year, which resulted in lower yields, combined with late planting and the frequency of strikes, during the second half of the year, he said.
During his budget presentation in January, Jordan had said that sugar production this year is targeted to grow by 4.8 percent to 242,287 metric tonnes.
For years, the sugar industry has been experiencing serious problems despite continuous bailouts by government.
A few days ago Opposition Leader Bharrat Jagdeo had expressed hope that the budget would set out a clearly diversification plans for the sugar industry.