Is it an illusion?
From page 12 and House (FCH) the nation drive. The FCH drive led to the formation of hundreds of cooperative societies that were involved in agricultural production. It also led to the development or strengthening of a variety of support systems, including the GMC which engaged in a variety of agro-processing activities and the establishment of the Guyana Agricultural and Industrial Development Bank (Gaibank).
Enormous opportunities
Guyana’s vast tracts of productive land presented enormous opportunities for growth in the areas of crops and livestock. The range of crops involved was wide and included various types of ground provisions, citrus, beans and fruits. The expanded production of these crops with a guaranteed market in the GMC was intended to meet a set of social and economic goals. The goals did not only include achieving food security, they were also aimed at increasing employment and strengthening the competitive position of the economy. Guyana had come to realize that rice and sugar were commodities where success depended on supply and demand in markets over which Guyana had little control. The foreign exchange earned from those commodities was spent on helping to maintain those industries and importing foreign-produced food. Guyana tried to reduce its dependence on foreign foods by adopting a mercantilist policy of import substitution. The policy was simple, export more and import less. In addition, export more valueadded foods and less unprocessed primary commodities.
As a consequence, Guyana deployed various techniques that were prevalent during the heyday of mercantilism, namely high tariffs or physical restraints on imports while seeking to buy more intermediate goods for production. Part of the struggle was induced by the contradictions between mercantilism and liberalism since the policies ran counter to the policies of liberalism that had taken hold of the global economy by the late 1970s. Additional challenges came from exogenous variables such as conflict in the Middle East. Consequently, even more traumatic were the successive increases in the price that Guyana had to pay for oil following the imposition of the Organization of Petroleum Exporting Countries (OPEC) and their oil production and pricing will on the world. By the end of the 1990s, Guyana found itself buying oil at well over 300 per cent of what it was paying at the start of the FCH programme in 1972. The ambitions for value-added exports through agro-processing were dashed since energy was an important input into the agro-processing initiative and it was costing too much to access it.
Other factors such as number of persons employed, contribution to government revenues and number of persons dependent on the sector helped to reinforce the significance and image of agriculture as the dominant sector of the Guyana economy.
(To be continued)