Closing Caroni Greens, ‘responsible thing to do’

Instead, Rambharat described the decision as “the responsible thing to do”, given that 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 — was like its predecessor, 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.

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 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.

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,” Rambharat said.

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.

But the minister disagrees.

“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,” the minister said, adding that he is not surprised people want to hold on to monthly salaries as high as $45,000 among a staff of at Caroni Green’s head office.