During debate on this year's National Budget, he noted that production for last year was 331,067 tonnes, while sugar cane yields increased from 62.8 tonnes per hectare in 2001 to 80.4 tonnes last year and sugar yields were 7.3 tonnes per hectare last year compared to 6-8 tonnes per hectare for 2001.

Chandarpal said these figures testify to both an increase in quantity and quality and are a manifestation of what is set out in the strategic plan to modernise and expand the industry.

In the formulation of the strategic plan for the sugar industry, the Government recognises its crucial and critical importance to the economic and social development of this country, the minister said.

He pointed out that agriculture accounts for 33% of the Gross Domestic Product of which sugar production is 18.8%.

But apart from the economic contribution of the industry, the Government is aware of the livelihood it is providing to thousands of workers and families and the facilitating of several spin off services, he noted, adding that the impact on the economic and social well being of this nation is larger than the figures indicate.

In a presentation Monday, Leader of the Rise Organise and Rebuild (ROAR) party, Mr. Ravi Dev had argued that because of the increase in the production of sugar there is no need for the expansion of the industry.

Refuting Dev's contention, Chandarpal yesterday said the challenge is not only to increase production but to reduce the cost of production and in this regard the East Berbice Estates are producing at a lower cost than other locations, about US13 cents compared to about US20 cents.

As such the modernisation and expansion has begun in East Berbice, he said.

He, however, said that an element of risk is involved because of global fluctuations of prices, but pointed out that despite stockpiles of the commodity last year the international market price rose from US6 cents to US8 cents and currently 50% of Guyana's sugar is being exported to preferential markets.

In addition, Guyana's export to the Caribbean Community (CARICOM) market is increasing and is more than 60,000 tonnes, an increase of 33% in recent years. Haiti is expected to purchase 7,500 tonnes this year, he added.

There is no reason to shift emphasis from agriculture, particularly sugar, as the industry enjoys a comparative advantage in the region, Chandarpal countered.

He noted too that the World Trade Organisation (WTO) most likely will succeed in having subsidies from the industry in Europe removed and this may result in a reduction in their internal production of the commodity, thus increasing the chances of Guyana increasing its market share in those countries.

Dev had also claimed that sugar workers are not benefiting from the increased production in the industry, but Chandarpal retorted that the positive results in the industry is an indication that workers are more satisfied.

He said there is a greater sense of a common objective between workers and management that if the production base is undermined there cannot be greater benefits.

On the co-generation of electricity as outlined in the strategic plan for the industry, Dev accused the Government of abandoning this aspect which he said is of great importance in view of the power supply problem in the country.

However, Chandarpal categorically rejected his accusation, stating that on the contrary co-generation is a key element of the plan but because funding is being done in separate components that aspect has not been implemented as yet, and in fact as part of the value added component of the plan, a refinery and distillery are on the cards.

Minister of Foreign Trade and International Cooperation, Mr. Clement Rohee, during his presentation informed the National Assembly that "an aggressive lobbying campaign" is being carried out by the African, Caribbean and Pacific (ACP) nations to ensure that if the challenge to the European Sugar Regime by Brazil and Australia is successful it would not have collateral damage to the ACP countries as was the case in other instances.

Earlier this year Rohee was a part of an ACP delegation which visited Brazil to update the Government there of the negative consequences of the challenge to the sugar industry in the ACP countries.

The Brazilians gave the assurance that they would not do anything to jeopardise the preferential markets these countries enjoy with Europe.

Dealing with the rice industry, Chandarpal acknowledged that it has not enjoyed the success of sugar, with production decreasing from 322,000 tonnes in 2001 to 287,000 tonnes last year.

One major factor for this situation was the extreme weather, with excessive rainfall during the first crop last year which hampered land preparation, he said. As such less land was cultivated for the second crop, he explained.

He also observed that the drainage and irrigation system does not have the capacity to deal with extreme weather conditions.

Chandarpal also rejected Dev's claim that the Government has not significantly contributed to the development of the rice sector, pointing out that under its 10-year strategic plan for the industry, assistance is provided to farmers through preparation of seeds, cultivation methods, post harvest management and marketing, among other areas.

He also pointed to the agreement the Government negotiated with the banking sector to reschedule loans under $10M owed by farmers to banks, and those who owe above $10M will soon benefit from a similar arrangement.

Through collaboration with the Guyana Rice Development Board (GRDB) and the Guyana Rice Producers Association (RPA) farmers are being assisted in the control and management of paddy bugs and other pests, which are adversely affecting rice production, the minister informed the National Assembly.

He also said that steps were taken by the Government to remove middlemen from the sale and distribution of fertilisers to ensure that the prices for the product were kept to minimum levels.

Harvesting of the current crop is under way and according to the General Secretary of the RPA, Mr. Dharamkumar Seeraj it should be almost completed by the end of this month.

However, the organization, which represents rice farmers, said farmers have been experiencing serious difficulties in selling their paddy as several mills throughout the country have closed their operations because of financial difficulties.

According to him, the current price for paddy is not economical for farmers and one of the worrying consequences of this is that a significant number of farmers may "fall out" of the industry during the next crop because they would not have the financial capacity to replant.

More than 161,000 acres of rice land were cultivated for the current crop and so far about 63,000 acres have been reaped yielding some 1.8 million bags of paddy, Seeraj reported.

The projected target for this crop was 4.7 million bags of paddy.

However, there would be a shortfall because of lower output in several areas, including Leguan, Wakenaam, Mahaica and Mahaicony Creeks, Crabwood Creek and Black Bush Polder which were adversely affected by a shortage of irrigation water as a result of the prolonged dry season, Seeraj said.