GEORGETOWN: The findings of the Commission of Inquiry (CoI) into the operations of the Guyana Sugar Corporation (GuySuCo) will determine whether or not Government will further invest in that corporation.
Meanwhile, an additional $8.2 billion have been allocated to the company to meet operational costs until the end of 2015.
This was disclosed by Finance Minister Winston Jordan when he presented the $221 billion National Budget on Monday in the National Assembly.
The Government has appointed a CoI to inquire into the current state of cane cultivation and production and marketing of sugar, molasses and other by-products, including power.
This was done because the Administration believes that the economic well-being of the sugar industry is critical to the protection of jobs and growth of the economy, as well as because of the contribution it makes to the gross domestic product (GDP) of the country, its exports and foreign exchange.
The Minister reminded the House that the Government had previously intervened when it was discovered that GuySuCo was insolvent and needed an infusion of cash to keep it afloat. He explained that $3.8 billion had been injected at the time to avert collapse of the industry and onset of a possible crisis.
“This stop-gap measure is neither sustainable nor meant to be a substitute for, or postponing of, the hard decisions that need to be made. Whatever path the industry takes, it is vital for the sake of the national economy that it remains viable to compete in an increasingly competitive and volatile global market,” Minister Jordan told the House.
The Minister said the sugar industry in Guyana has long been in decline. The industry continues to grapple with an unsustainably high cost structure, with production currently averaging US$0.40 per pound for sugar, almost three times the world market price.
He further said the sugar company’s continuous sub-par performances since the mid-2000s have been well ventilated.
“Between 2008 and 2013, annual sugar production, which averaged 220,362 tonnes, was considerably below the average production level of 286,084 tonnes for the preceding period 2000-2007.
Following its disastrous performance in 2013, when a lowly 186,770 tonnes had been produced, a modest target of 215,910 tonnes had been set for 2014. The final out turn for 2014 was 216,186 tonnes,”
Minister Jordan said.
The Minister is of the view that the implications of the sugar industry remaining an uncompetitive producer are frightening.
