Analysis of Guyana Sugar Corporation's Value Beyond Accounting Profit - A Letter to the Editor in the Guyana Times

In a letter to the Editor published in the Guyana Times on October 30, 2026, the writer addressed a previous letter that questioned the 2025 results of the Guyana Sugar Corporation (GuySuCo) on October 26, 2026. The writer contended that viewing GuySuCo as if it were a private entity whose worth is determined only by its income statement constitutes a fundamental analytical mistake.

The writer noted that employment expenses constitute approximately 77 per cent of the total cost for GuySuCo, supporting over 8,000 employees and around 5,000 pensioners, as estimated in the 2019 position paper. When Wales, Enmore, Rose Hall and Skeldon were closed between 2016 and 2018, some 7,000 workers were sent home, as reported in the 2019 position paper. Furthermore, drainage and irrigation projects, which cost about $2.6 billion, provide protection to adjacent villages, access to dams, and farmlands, extending beyond just cane fields, as reported in the 2019 position paper.

It was argued that stating that $16.9 billion could have constructed 1,924 homes was misleading, as that money was utilized to pay Guyanese workers and was spent within sugar communities, as reported in the 2019 position paper. The core argument presented is that GuySuCo is not purely a commercial venture; its sole shareholder is the State, and the State's objective is to maximize national welfare rather than maximize dividends, as stated in the 2019 position paper. Over 41 per cent of cultivation is already mechanised, with a move to between 50 and 60 per cent, as reported in the 2019 position paper. The corporation performs public duties, such as providing community-wide drainage, retaining employment for social reasons, and maintaining a livelihood base in rural areas where few alternatives exist. Consequently, some of GuySuCo's accounting loss represents the cost of these public functions.

According to the writer, the appropriate inquiry is not whether GuySuCo generated a profit, but rather whether the national economy is improved or worsened by the industry's operation compared to its cessation. This requires a different metric, as accounting profit only records transactions on the corporation's books at paid prices, whereas economic profit accounts for opportunity costs.

Using a measure that includes benefits not reflected in the income statement and recognizing that much of what GuySuCo records as a cost is income to the nation—such as wages earned by Guyanese families, taxes paid to the Treasury, and payments to local suppliers—the case for maintaining the industry is clear. The writer cited a 2019 position paper where they estimated that the social and economic cost of closing the sugar industry was roughly eight times greater than the cost of keeping it operational, even when the industry incurred an accounting loss, as reported in the 2019 position paper.

Applying a conservative multiplier of 1.3 to 1.5, which accounts for high import leakage in a small open economy, the $22 billion employment bill is estimated to support between $29 billion and $33 billion in economic activity, largely concentrated in the rural areas of Berbice, Demerara, and West Demerara. During the 2026 Budget debate, Minister of Agriculture Zulfikar Mustapha presented a five-year strategic plan for GuySuCo, reporting that over 41 per cent of cultivation is already mechanised, with a move to between 50 and 60 per cent, and stated that “managers have to be more accountable now” (Department of Public Information, February 10, 2026; Guyana Times, February 11, 2026). The writer warned that if this economic activity were removed, the village economies dependent on the estates would contract.

Regarding operational performance, the writer mentioned that the 22.8 per cent rise in costs must be viewed alongside operating conditions, noting the industry had only 39 opportunity days against an estimated 75, an average cane-harvester attendance of 48 per cent, and that carry-over cane was affected by the El Niño drought. The writer also noted that it took 15.65 tonnes of cane to yield one tonne of sugar, against a budget of 12.84 tonnes. The Minister had acknowledged that retaining workers at Enmore and Skeldon increased production costs (Department of Public Information, February 10, 2026; Guyana Times, February 11, 2026).

The writer concluded that while GuySuCo's accounting loss is real and warrants accountability, reducing the discussion to a single figure or equating it to homes not built mismeasures a national industry. The writer asserted that the correct standard is the net economic return to Guyana, specifically whether the turnaround plan reduces the fiscal cost associated with each unit of social benefit over time, meaning GuySuCo should be evaluated on its economic profit, not just its accounting profit.