Dear Editor,
As uncomfortable as it is to admit, we must acknowledge that the Guyana Sugar Corporation’s financial position is dismal. In many respects, while a lot is being done to improve the operations of the estate, if the industry cannot compete in a globalised market, it will continue to suffer significant losses, resulting in heavy reliance on state support for its survival.
There are, however, several factors outside of the Government’s control that affect the industry’s profit margin, along with some opportunities for investment that can contribute to the estate’s profitability, our economy, and the cost of living in positive ways. Let ‘s examine these.
I am not calling for the closure of these estates, as the industry itself sustains indirect economic activities in the areas where it operates (sugar workers supporting supermarkets, convenience stores, etc.). It supports local drainage and irrigation, which helps communities against flooding and mosquito-borne infections, and contributes to the strength of the Guyana Dollar through exports. Most notably, it supports the livelihoods of thousands to some extent.
Since 2020, the Government of Guyana has injected over $40 billion into the industry. Using 2020 as a benchmark, we’ve seen that over the following years, GuySuCo has struggled in the sense that it has failed to reach annual targets. Its operational costs have exceeded global market prices, primarily due to a significant price drop in sugar and an excessive surplus produced by countries like India and Brazil that are saturating the global market.
Couple that with other performance metrics like weather, labor shortages, and the floods of 2021, and you get an idea of the market and environment in which the industry operates and the challenges it faces. However, there have been major investments by the Government in terms of mechanisation capacity, with close to 5,000 hectares of land being converted to mechanical harvesting and significant investments in repairs and maintenance of estates. But improving the processes alone will not change the direction of the industry (at least not in the long term), especially if they continue to maintain a primitive business model.
We need investments in adapting radical solutions to create not only new industries within but also generational wealth for cane harvesters, all in the interest of making GuySuCo profitable. The most direct positive impact on the company’s spreadsheet would simply be reducing its operational expenses by privatising the cultivation and harvesting aspects, giving lands to “Cane Cutters” (who are probably at the bottom of the pay grade in this country) so they can become their own private farmers, feel a sense of ownership, and increase the income they bring to their households.
The Government can adopt the same textbook principles of the rice industry, keeping these estates under its control and providing technical and financial support. The result would be immediate: operational expenses would theoretically decrease while pulling thousands of Guyanese out of poverty. With that, the Government can shift its focus to gaining entry into new markets, and the system itself becomes a “win-win” for everyone involved.
The ripple effects from this can result in new industries that other Guyanese within the private sector (even the Government) can take advantage of to further support the “Sugar Cane Farmers” and estates by acting as a domestic shield against volatile price swings in the global market.
For example, bagasse, the fibrous debris of sugarcane, is usually burned in highly pressurised chambers to produce energy. This can be added back to the national grid to meet supply by expanding capacity to satisfy our energy demands. India, for example, has adopted this technology by investing in biomass plants that generate close to 9,800 megawatts of energy. Organic matter (press mud) can be used to create biomethane (biofuel), which can be used for industrial applications.
Sustainable packaging is also a new industry in which startups can invest to combat single-use plastics in Guyana. The fiber content of bagasse can create biodegradable plates, cups, trays, and food containers, acting as a sustainable alternative to Styrofoam and plastic. There is also research being conducted where scientists are extracting nanocellulose particles from bagasse for applications in lightweight automotive composite parts. Bagasse can be a fiber source in livestock feed, often mixed with molasses to increase nutritional value. Molasses can be used to make certain beauty products and waxes for candles.
Every day, the industry dumps tonnes of materials as waste that could be repurposed for many potential business opportunities. All that is needed is the effort to think outside the box!
In conclusion, we have an existing sugar industry with the groundwork already laid out; what we lack is the innovation to sustain it for generations to come.