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ronan posted:

so, where did you get your numbers from?

my reading of the literature informs that, outside the ACP/US preference arrangements, Guyana produced & sold sugar at a net foreign currency loss

i am also quite sure that you are quite aware that the $GY is not a reserve currency

There are no longer ACP preferential prices so all Guyana production is at a loss.  For every dollar earned in forex 2-3 dollars is spent to produce it.  Guysuco also owes many local suppliers.   I bet you that many no longer wish to provide goods/services or they demand cash upfront.

caribny posted:

We don't even know what these oil revenues will be.  I think that Guyanese should stop spending money before it is earned.   In any case subsidies in farming need to go to expanding non traditional sectors and also basic food production, including agro industries.  Its a disgrace that Guyana imports fruit juices from Barbados!  Guyana should export its own as well as the concentrates to manufacturers in the Caribbean.

What we do know is that oil revenues will be much less that other African nations, due to bad negotiation with Exxon by the govt.  Chris Ram have been exposing the bad deal in a series of articles. Even overseas organizations have sounded the warning bugle. Many here have turned a deaf ear to these warnings and even excuse the blatant giveaway of Guyana's assets by APNU.  Instead they revel in the charges brought against Singh and Brassington over relative chump change, while Exxon gets to charge outrageous sums for "administrative" fees. 

Regarding imports of fruit juices, this is a direct impact of Guyanese taste for everything foreign at the detriment of local producers. Imagine you can get a fresh squeezed glass of orange juice, but people prefer a package of koolaid. Just the other day the newspapers announced with great fanfare the foray of Juicy Juice(Nestle) into the Guyanese market as though it was the greatest thing since slice bread. It is not the case that there are no producers of juice, but rather the demand for local is just not there. 

caribny posted:
Reeper posted:

Question, when the US gives out subsidies to farmers, how do they determine that they are not propping up inefficient operations? Maybe this could be a model to leverage. 

Subsidies are determined by political lobbying.  The big guys get the subsidies and the small guys become indebted with many forced out of business.

I hesitated to take your statement at face value. I did some research and found that there are specific guidelines to getting farm subsidies in the US that has nothing to do with lobbying.  It looks like anyone can apply.

The size of your acreage plays a part in how much of a direct subsidy you receive, but you may also be required to show that you’ve been actively farming the land as a business by supplying copies of past income taxes. If your land qualifies, the FSA will determine the amount of your payment based on the number of acres in cultivation. 

Below is a rough analysis regarding my assertion that Guyana's sugar exports are a net FOREX loser absent access to (expiring) preferential market pricing:

first see

Guysuco 2015 Annual Report @p.4

from Table, GuySuCo exported sugar (mostly preferential markets) in 2015 at an average of $US347/Tonne

in the previous 9 years (mostly preferential markets) sugar was exported at an average of $US557/Tonne

from Table, Cost of Materials and Services, i.e., FOREX (incl. fuel, fertilizer, machinery, etc.) run on average 35-40% of costs during 2006-2015

Doing the math, e.g., for 2015, we have "Cost of Materials & Services" accounting for approx. $US59 million vs. FOREX sales of US$76 million @ $US347/Tonne . . . however, @ the world price then hovering around $US265/Tonne, the FOREX loss would have been approx. $US3 million . . . essentially a wash. For the previous 9 years, the losses would have been worse

f.o.b. world market price for bulk sugar is now around $US277 per Tonne and dropping

i also cite Hewitt's 2001 analysis of the industry circa 1996 . . . this is instructive:

"These productivity differentials translate into substantial differences in international competitiveness. Domestic resource cost (DRC) analysis on the sugar industry in Guyana, offers some indication as to the present viability of the industry (and that of the different estates within the industry) in the context of different export markets.23  DRC calculations provide an empirical measure of competitiveness (from the social point of view of profitable use of domestic resources, rather than the private concept of profitability). According to these criteria, Angel (1996) finds that both groups of estates are competitive in the EU markets (SP and SPS) but only the Berbice Estates are competitive in the US preferential market. Neither Demerara nor Berbice Estates demonstrate a competitive advantage, in the protected CARICOM market or the world market. In other words, production for the latter two markets costs the country more in terms of foreign exchange than it earns in export revenues."



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