Agriculture sector contracted by 10.4% – finance report

first_imgThe agriculture sector contracted by a massive 10.4% last year even though the overall economy grew by 3.3%, primarily on the back of production increases in the gold industry.This was revealed in the Monthly Economic Bulletin (MEB) for the month of December produced by the Economic Policy Analysis Unit (EPAU) of the Office of the Budget at the Finance Ministry. The bulletins provide monthly updates on some of the important developments within Guyana’s economy. Published on the Ministry’s website last week, the bulletin said the El Niño phenomenon was partly to be blamed for dismal performances registered in the rice and sugar industries during the first half of 2016. However, it noted that the late planting in both industries also hampered production for the second half of the year.In addition, it blamed union strikes during the fourth quarter of the year for adversely affecting production in the sugar industry.The Monthly Economic Bulletin for January 2017 has projected that the agricultural sector is expected to show improvement this year, with strong growth expected for the rice and fishing industries.Meanwhile, the forestry industry performed poorly because of a halt in the awarding of concessions and sluggish global demand for timber products, which resulted in the contraction of operations of two companies. To this end, Government has said, it aims to reform the industry so as to benefit the nation over the medium–to–long term. Economic growth is projected at 3.8 per cent for 2017.A review of the performance of the sugar industry revealed that in December last year, 28,184 tonnes of sugar were produced, which resulted in an end-of-year total of 183,491 tonnes for 2016, compared to 229,318 tonnes produced during 2015.“Sugar production for 2016 was 20 per cent lower than 2015, due to the El Niño phenomenon which severely affected production of the first crop, combined with late planting and strikes during the second half of the year. Sugar production, though budgeted to increase in 2017, may decline due to reduced crop from the Skeldon Estate. This will result in a contraction in the industry once again,” the December 2016 Bulletin projected.Since production is not generated until February each year, there is no record of sugar production for January 2017, and the MEB for that month states that the 208,000 tonnes targeted for this year will be revised due to ongoing issues at the Skeldon factory.As it relates to the Rice Industry, production for December 2016 reached 1,582 tonnes, down from 6,267 tonnes in December 2015.This, the Bulletin outlined, resulted in production for 2016 totalling 534,766 tonnes compared to 687,784 tonnes produced in 2015, a reduction of 22.2 per cent.“Similar to sugar, rice production for 2016 was lower than 2015, due to the El Niño phenomenon combined with late sowing for the second crop. The rice industry is expected to rebound in 2017 with production forecasted at 590,000 tonnes (provided that conditions remain favourable and new markets are found),” the December 2016 Bulletin has predicted.Like in sugar, no production was also recorded for rice in January 2017, targeted at 590,000 tonnes, the MEB for that month has noted. Nevertheless, sowing reportedly continued during January and February.The production of the forestry industry for December 2016 amounted to 39,091 cubic metres, compared with 96,026 cubic metres in December 2015. “This resulted in production reaching 327,781 cubic metres in 2016, compared to 427,351 cubic metres in 2015.Lower production for 2016 resulted from the Government reorganising the sector in pursuit of better forestry management and greater value added,” the Bulletin states.In addition, the downsizing of Barama during the fourth quarter of last year had a negative impact on production.Going forward this year, forestry production for January 2017 amounted to 17,174 cubic metres, compared with 25,733 cubic metres in the corresponding period last year.  “Lower production is expected for this industry as reorganising of the industry by Government continues. Production for 2017 is targeted at 297,070 cubic metres,” the January 2017 MEB noted.Despite, the industry’s expected continuity in decline in 2017, growth within the industry will, over the medium term, rebound as more value-added products are added, the MEB has noted.last_img

Have any Question or Comment?

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Comments