Closure of estates severely compromised livelihoods of sugar workers – study

-recommends diversification strategy

According to research funded by the International Labour Organisation (ILO) the closure of four sugar estates under the APNU+AFC government severely compromised the livelihoods of the laid off workers leading to increased instances of suicide, alcohol consumption and crime.

The same research however cautioned that these workers should be consulted on ways to create sustainable and secure livelihoods since reopening these estates without a clear diversification plan will create neither.

“Reopening sugar factories will address livelihoods but livelihood sustainability will not be assured if GuySuCo remains primarily in the business of selling raw sugar at market prices”, the report notes, adding that conducting a comprehensive survey and scenario analysis of the needs and expectations of sugar workers affected by the closure of the sugar estates might be appropriate.

Around 7,000 sugar workers were laid off beginning at the end of 2017 when the APNU+AFC government decided to shut the Wales, Skeldon, Enmore and Rose Hall estates. Workers were left without livelihood options and there was severe impact on their communities. The then opposition PPP/C had vowed to reopen the shuttered estates and is in the process of doing so while at the same time seeking foreign investors and pursuing diversification options.

The ILO-funded research released yesterday argues that the basis on which a re-opening of the estates should stand is that the livelihoods that will depend on the revitalized industry must be sustainable, and must be able to withstand any similar major shock that might arise in the future especially since sugar production will remain uncompetitive at market prices.

The research titled “Study of the socioeconomic impact of the closure of GuySuCo sugar estates on sugar workers in Guyana” was conducted by Director of the University of Guyana’s GREEN Institute, Dr Thomas Singh using the ILO’s “sustainable livelihoods” framework to examine the impact on workers and their livelihoods. Conducted via focus group interview with 41 laid off workers it took into consideration safety and support instruments provided by the state after the closures and examined the potential for greater competitiveness and productivity in the sugar industry should the current government re-open the affected estates.

During a virtual launch yesterday Singh explained that the average worker interviewed had 26 years of experience with GuySuCo and 72.5 % represented main income earners in households.

The severity of the impact occurred because communities have for generations been intricately linked to the sugar industry. These estates were not only characterized by the production of sugar but also served as a hub for community life and income generation and earning activities, Singh noted. He stressed that these links must be loosened and investment to keep estates open must occur as one element of an investment strategy that creates opportunities for an expanded market size, based on complementary demands across activities.

Consequently, Singh has recommended the development of a National Investment and Diversification Strategy for Guyana, with a particular role being identified for the sugar industry.

“A National Investment and Diversification Strategy shall go beyond identifying sectors or activities for investment, to take account of the challenges of [commodity markets] and clearly identify the respective functions of the Government, the private sector, labour and civil society,” the report recommends.

It warns that the existing and growing dependence of the Guyana economy on commodity exports must be accompanied by carefully designed efforts to diversify the economy in ways that would counterbalance the price volatility that characterizes commodity markets.

“There will be a need for a closer understanding of the way the commodities exported by Guyana behave in an effort to exploit any opportunities for hedging against downturns in particular commodities within Guyana’s portfolio of commodity exports. Furthermore, there will have to be diversification into noncommodity sectors, taking appropriate cognizance of the tendency for commodity production, and the oil bonanza in particular, to reduce the competitiveness of these other sectors,” it highlights.

Also recommended is the production of cellulosic ethanol as a source of renewable, low-carbon energy to boost the very profitability of the sugar industry.

Singh argued that cellulosic ethanol can enhance profitability by achieving complementarity of investment, contributing to livelihood sustainability and security. It can also add renewable energy as a major element of the energy portfolio, create green jobs, secure technology transfer from major oil companies engaged in biofuel research and meet obligations under the Paris Climate Agreement.