Government’s Decision to Close Caroni Green Justified: Agriculture Minister assures workers will be treated fairly
March 18, 2017:
Minister of Agriculture, Land and Fisheries, Senator the Honourable Clarence Rambharat is today refuting claims by Opposition MP Rudy Indarsingh that the closure of Caroni Green Limited (CGL) is an “attack on workers,” and instead described the decision as the responsible thing to do given the State Company's broken business model and poor performance over the last three years. Rambharat defended Government’s decision to shutter the company saying Caroni Green Limited - a reboot of the failed Caroni Green Initiative which was created by the People’s Partnership administration in 2013 to rent and cultivate former Caroni Lands - had, like its predecessor, been a financial disaster from day one.
For the 2015 financial year, Caroni Green Limited reported revenues of just $700,000. That same year, administrative expenses including salaries cost taxpayers $6.7 million. And while the Company's recent report of increased revenues is yet to be verified, by its own admission, administrative expenses for 2016 increased to $8.5 million.
Salaries alone ballooned to $7 million, yet Caroni Green is still without the trained technical staff it needs to pursue its objectives as a national agricultural company.
Since 2015, a year after an Ernst & Young audit uncovered mounting losses amid management and procurement issues at the original Caroni Green Initiative, its successor CGL has produced pepper - and, to a lesser extent, pawpaw and plantain - on 50 acres of former Caroni (1975) Limited lands. Yet soaring overheads, particularly at its head office, have made CGL uncompetitive. While domestic farmers produce hot peppers at a much lower cost per pound, Caroni Green has struggled, despite hefty subventions, to grow revenues to cover its costs.
“The need to focus more on farmers and fisherfolk and reduce unacceptable administrative costs is enough to justify wide-ranging restructuring of underperforming State Enterprises in the agriculture sector”, Rambharat said.
“In cases like Caroni Green, the most prudent thing to do is to close the Company and use that money to help independent farmers. This is line with what we said we would do and we will do it within the Law and in line with proper industrial relations.”
Technocrats in the Ministry warn of two underlying issues with Caroni Green’s business model. The first is the inevitability of another taxpayer-funded agriculture enterprise with high staff costs and low revenue. The second is that Caroni Green, a State Enterprise, competes directly with domestic farmers.
“Caroni Green itself never earned a dollar of foreign exchange”, Rambharat said. “While some buyers of CGL’s highly subsidised hot peppers may have had some exports, the majority were sold on the local market, stifling smaller farmers. That model simply cannot work, but I am not surprised that Mr. Lalla wants to hold on to a $45,000 monthly salary to manage 14 employees at the head office.”
CGL CEO Sharma Lalla has called on Government to reconsider its decision, but for Minister Rambharat the potential for a larger crisis is real in light of Government’s shrinking revenues and Caroni Green’s mounting costs. Rambharat echoed statements by Prime Minister Dr. Keith Rowley at last Thursday’s post-Cabinet press briefing on the impending closure of the State Company. “Caroni Green was examined by a committee that reviewed all wholly-owned State Enterprises in Trinidad and Tobago, and was recommended for immediate closure”, Rambharat said. “A Board of Directors approved by the Cabinet under the chairmanship of Jerry Hospedales would work with the Ministry to determine next steps.”
For further information, please contact:
Head, Communications and Events,
Ministry of Agriculture, Land and Fisheries
Tel: (868) 622-1221