Agriculture in Guyana


Agriculture was once the chief economic activity in Guyana despite the coastal plain which comprised only about 5 percent of the country's land area being suitable for cultivation of crops. Much of this fertile area lay more than one meter below the high-tide level of the sea and had to be protected by a system of dikes and dams, making agricultural expansion expensive and difficult. In the 1980s, there were reports that the 200-year-old system of dikes in Guyana was in a serious state of disrepair. Guyana's remaining land area is divided into a white sand belt, which is forested, and interior highlands consisting of mountains, plateaus, and savanna. 2% of the land is arable land.
Today, sugar and rice are the most important primary agricultural products, as they had been since the nineteenth century. Sugar was produced primarily for export whereas most rice was consumed domestically. Today in Guyana sugar production generates the most revenue in the primary industry, at around 15% of the total annual GNP. Other important crops include wheat, bananas, coconuts, coffee, cocoa, citrus fruits, pepper and pumpkin and livestock commodities from the country's various cattle ranches including beef, pork, poultry, dairy products and fish, notably shrimp. In some areas peanuts are also an important crop. Many of these products including rice are of extreme importance to national food security within the country. Small amounts of vegetables, vegetable oil and tobacco are also produced. During the late 1980s, some farmers succeeded in diversifying into specialty products such as heart-of-palm and asparagus for export to Europe.

Sugar

The extent of Guyana's economic decline in the 1980s was clearly reflected in the performance of the sugar sector. Production levels were halved, from 324,000 tons in 1978 to 168,000 tons in 1988.
A number of factors contributed to the shrinking harvests. The first factor was nationalization. The rapid nationalization of the sugar industry in the mid-1970s led to severe management difficulties and an emigration of talent. The Guyana Sugar Corporation, which took over the sugar plantations, lacked needed experience. Perhaps more important, Guysuco did not have access to the reserves of foreign capital required to maintain sugar plantations and processing mills during economically difficult periods. When production fell, Guysuco became increasingly dependent on state support to pay the salaries of its 20,000 workers. Second, the industry was hard-hit by labor unrest directed at the government of Guyana. A four-week strike in early 1988 and a seven-week strike in 1989 contributed to the low harvests. Third, plant diseases and adverse weather plagued sugar crops. After disease wiped out much of the sugarcane crop in the early 1980s, farmers switched to a disease-resistant but less productive variety. Extreme weather in the form of both droughts and floods, especially in 1988, also led to smaller harvests.
Guyana exported about 85 percent of its annual sugar output, making sugar the largest source of foreign exchange. But the prospects for sugar exports grew less favorable during the 1980s. Rising production costs after nationalization, along with falling world sugar prices since the late 1970s, placed Guyana in an increasingly uncompetitive position. A 1989 Financial Times report estimated production costs in Guyana at almost US$400 per ton, roughly the same as world sugar prices at that time. By early 1991, world sugar prices had declined sharply to under US$200 per ton. Prices were expected to continue decreasing as China, Thailand, and India boosted sugar supplies to record high levels.

Production of Raw Sugar: 1990–2001

In the face of such keen international competition, Guyana grew increasingly dependent on its access to the subsidized markets of Europe and the United States. The bulk of sugar exports went to the European Economic Community under the Lomé Convention, a special quota arrangement. The benefits of the quota were unmistakable: in 1987, for example, the EEC price of sugar was about US$460 per ton, whereas the world price was only US$154 per ton. Guyana was allowed to sell a much smaller amount of sugar in the United States market at prices comparable to those in the EEC under another quota arrangement, the Caribbean Basin Initiative. Maintaining preferential access to the European market was a priority in Guyana; in 1988 and 1989, production levels were too low to satisfy the EEC quota, so Guyana imported sugar at low prices and reexported it to the lucrative European market. Even so, Guyana fell 35,000 tons short of filling the quota in 1989 and 13,000 tons short in 1990.
The government of Guyana restructured the sugar industry in the mid-1980s to restore its profitability. The area dedicated to sugar production was reduced from 50,000 hectares to under 40,000 hectares, and two of ten sugarcane-processing mills were closed. Guysuco also diversified into production of dairy products, livestock, citrus, and other items. Profitability improved, but production levels and export earnings remained well below target. In mid-1990, the government took an important step toward long-term reform of the sugar industry – and a symbolically important step toward opening the economy – when Guysuco signed a management contract with the British firms Booker and Tate & Lyle. The Booker company owned most sugar plantations in Guyana until the industry was nationalized in 1976. A study by the two companies reportedly estimated that US$20 million would be needed to rehabilitate Guyana's sugar industry.

Rice

Rice production in Guyana reached a high of over 180,000 tons in 1984 but declined to a low of 130,000 tons in 1988. The fluctuating production levels were the result of disease and inconsistent weather. Droughts and heavy rains had an adverse effect on rice crops because the irrigation and drainage systems in rice-growing areas were poorly maintained. The area under rice cultivation fell from 100,000 hectares in 1964 to 36,000 hectares in 1988, according to the Guyana Rice Producers' Association.
Most rice farms in Guyana were privately owned; the government operated the irrigation systems and rice-processing mills. This division of the industry resulted in several difficulties. According to the United States Embassy, the government neglected irrigation and drainage canals because private farmers refused to pay taxes for their maintenance. Meanwhile, the government-run mills were reportedly slow in paying farmers for their crops. In addition, the government-controlled distribution system for tractors, fuel, spare parts, and fertilizer was highly inefficient, according to some reports. In 1990 the government began privatizing the rice industry by putting several rice mills up for sale.
The bulk of Guyana's rice production was consumed domestically. Even so, exports took on increasing importance during the 1980s as a source of foreign exchange; there were even reports of rice being smuggled out of the country. Guyana shared a quota for rice exports to the EEC with neighboring Suriname but was unable to fill the quota during the late 1980s. In 1988 the government set a 1991 production goal of 240,000 tons and an export goal of 100,000 tons. In the first quarter of 1990, however, exports fell to a record low of 16,000 tons, for an annual rate of less than 70,000 tons. Half of these exports came directly from private farmers, the other half from the Guyana Rice Milling and Marketing.

Peanuts

Peanut production plays an important role in some areas of the country. In the remote Rupununi region of Guyana, peanut farming dominates the local economy and farmers depend upon the crop as their main source of income. Recent agricultural developments have enhanced production from 1,100 pounds per acre to over 2,500 in four years. As a result of increasing yields Guyanese farmers have not only benefited from local markets in Guyana but have increasingly seen the export of Guyanese peanuts in the Caribbean market.
In Guyana, peanut exports have been notably affected by food safety concerns. In the Rupununi region in particular, the local peanut crop needs to be tested for aflatoxins, a group of carcinogenic toxins that occur in the soil. Guyanese farmers are obliged to comply with the Guyanese Food and Drug Department and cannot sell peanuts unless they are certified as free of all aflatoxins.

Forestry

Timber was the least exploited but most abundant natural resource in Guyana in the early 1990s. Forests, many of which reportedly had commercial potential, covered three-quarters of the country's land. Over 1,000 different species of trees were known to grow in the country.
The two main difficulties in timber production were the limited access to the forests and electrical power problems at the major lumber mills. The government and interested groups overseas were addressing both difficulties. The government launched the Upper Demerara Forestry Project in the early 1980s to improve hardwood production on a 220,000-hectare site. In 1985 the International Development Association, part of the World Bank, provided a US$9 million loan for expansion of the forestry industry. In 1990 the government sold the state-owned logging company and announced plans to allow significant South Korean and Malaysian investment in the timber industry. Showing concern for the longterm condition of its forests, the government also planned to set aside 360,000 hectares of rain forest for supervised development and international research into sustainable management.

Fisheries

Fishery products took on increasing importance during the 1980s as potential earners of foreign exchange. By the end of the decade, shrimp had become the third leading earner of foreign exchange after sugar and bauxite. Fisheries production in Guyana totaled about 36,000 tons in 1989, down from 45,000 tons in the mid-1980s. The most valuable portion of the catch was the 3,800 tons of shrimp. Many fishermen reportedly sold their shrimp catch at sea to avoid taxes and earn foreign currency. Thus, shrimp exports may have been much higher than recorded. Shrimp exports were expected to continue increasing as Guyana developed shrimp farms along its coast; Guysuco began operating one such farm in the late 1980s. The bulk of the fisheries catch was sold at the dockside and consumed domestically. A US$5 million fish-processing plant was under construction on the Demerara River in 1990, raising the possibility of frozen fish exports. The government sold Guyana Fisheries Limited, which employed about 5,000 people, to foreign investors in 1990.

Livestock

production was not a major activity in Guyana because of a shortage of adequate pasture land and the lack of adequate transportation. In 1987 there were an estimated 210,000 cattle, 185,000 pigs, 120,000 sheep, and 15 million chickens in the country. The country imported Cuban Holstein-Zebu cattle in the mid-1980s in an effort to make Guyana self-sufficient in milk production; by 1987 annual production had reached 32 million liters, or only half the target quantity.

Agricultural institutions

There are numerous important institutions and organizations which are involved in agriculture in Guyana: