Future prosperity still hinges heavily on sugar industry
-Agriculture Minister
Stabroek News
April 11, 2003
Government is still holding firm to the belief that the future fortunes of Guyana will bank heavily on the continued existence of the sugar industry, in spite of the challenges it faces.
Expressing this view, Minister of Agriculture Navin Chandarpal argues that there is need to appreciate that the local industry is the only one in the Caribbean which is continually recording improvements.
"There is no reason for us to shift our focus from agriculture at this time because we have demonstrated that this is where we have a comparative advantage and for sugar in particular that is what we do best,"
Chandarpal declared in delivering the feature address at GUYSUCO's launching of its Demerara Gold branded sugar on Tuesday at Le Meridien Pegasus Hotel.
The agriculture minister, in outlining the important contribution of the sugar industry to Guyana, observed that apart from sustaining in excess of 22,000 full-time employees and 5,000 part-time employees and their families, and playing a role in rural development and the improvement of agricultural and industrial skills, there are even more critical features that cannot be ignored.
These include progressive improvements in production and productivity - from a low of 129,000 tonnes in 1990, the industry produced 331,000 in 2002 - and improvements in levels of efficiency in both field and factory operations. These, he said, have convinced both the regional and international developmental agencies, which are assisting in the formulation of a macro-economic development programme for Guyana, that the country's future prosperity will hinge upon the continued existence of the sugar industry.
Guysuco has embarked on a massive expansion project which will see a new factory built at Skeldon.
"In Guyana we are proud of the fact that the sugar industry receives no state subsidies and continues to hold the supreme position of being the single highest contributor to the economy," he added.
But Chandarpal acknowledged that there have been arguments which suggest that Guyana should move away from the sugar industry, in light of changes in prices, the recent closure of factories, the threats to preferential markets and commitments to regional, hemispheric and world trading blocs, which he observed could seriously jeopardise the outcome of GUYSUCO's investment plan.
However he contended that such arguments lose merit immediately in the context of the Caribbean Single Market and Economy, which offers a common external tariff of 40% on sugar. He said the continued support by CARICOM has seen Guyana's exports increased by 33% last year alone, with an export volume of 60,000 tonnes, while trade with Haiti has begun. And he added that Guyana will be targeting significant sales to this market in the years ahead.
Moreover, Chandarpal noted, it should be recognised that stockpiles of global sugar do not automatically translate into low prices.
Citing the rise of the world sugar price from below US 6 cents per pound to US 8 cents per pound, he said this indicates that the stocks are manageable.
Observing that three quarters of the world's production is either consumed in the country of production or traded on preferential terms, he deduced that the world market price is not a reflection of cost of production but rather is the dumping ground for surpluses.
Recognising the EU's support for countries of the ACP grouping - primarily because it recognises that a free-for-all market would harm the interests of small sugar producers like Guyana - he noted that the process of negotiating Economic Partnership Agreements had begun and these are due to come into effect from 2008.
This he pointed out would recognise the provisions of the 2000 Cotonou Agreement, which regulates trade between the EU and the ACP, for the protection of sensitive products such as sugar as well as the special legal status of the Sugar Protocol.
Regarding global free trade and the rulings likely to come from the World Trade Organisation (WTO), Chandarpal noted that the WTO is expected to force the EU to reduce its sugar subsidies, "and this will probably result in some lessening of the current value of preferences enjoyed by Guyana and other ACP producers.
He however added that these preferences are not expected to immediately disappear and moreover, "Guyana's current access to the EU markets would well expand with EU internal production cuts, thereby mitigating the impact of any price reductions." (Andre Haynes)
