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Guyana rice faces threat from proposed WTO price cuts
We’re not sitting idly by – Agri. Minister
Guyana is facing a major threat to its rice market in the European Union (EU), with a possible cut in earnings, following a proposal at the World Trade Organization (WTO).
If it comes through, this would be a major blow to local rice farmers and stakeholders in Guyana, who are looking to capitalize on high prices on the world market, according to the Ministry of Foreign Trade.
Guyana enjoyed duty-free quota-free access to the EU rice market, with that group of countries being the nation’s largest importer of rice. Guyana enjoyed a preferential market.
In a statement yesterday by the Ministry of Foreign Trade and International Cooperation, which outlined this latest threat, it was explained that the WTO proposal could result in the EU having to reduce its third 
country (MFN) tariff for rice in the current Doha round.
“The preferential access that has just been secured and even improved through the recent Economic Partnership Agreement (EPA) would then be of much less value for Guyana,” the ministry said yesterday.
With food shortages threatening the world and many producers planting their crops for bio-fuels, rice price has hit the highs and abandoned lands has now become valuable.
According to the ministry, the proposal in the WTO would result in the rice being treated as “tropical product”.
“The treatment of tropical products would result in even higher tariff reductions for rice — up to 85 per cent — than for most other agricultural products, and would thereby seriously erode the preferential margin that Guyana has in the EU market,” the ministry warned.
Guyana’s Minister of Foreign Trade and International Cooperation, Dr Henry Jeffrey, at the recently concluded meeting of the 87th Session of the African/Caribbean/Pacific (ACP) Council of Minister in Addis Ababa, Ethiopia, earlier this month, has brought up the matter.
The minister “called on the ACP to urgently ensure that the specific interests of Guyana and Suriname regarding preference erosion of rice exports to the EU will not be left unnoticed by the majority of the WTO membership,” according to the statement.
Guyana and Suriname are the only ACP countries with significant rice exports to the EU.
The statement spells a damning indictment on the efforts of local farmers and other stakeholders who have been pushing for increased production in light of the higher food prices of especially rice.
“Such a steep reduction in the tariff for third countries could substantially reduce the price that Guyanese rice exporters receive in the EU market. Estimates are that the price could go down by as much as US$100 per tonne. Guyana’s capacity to compete against other exporters –which often heavily subsidize their rice production — would be constrained significantly,” the ministry warned.
This proposal would also undo the benefits of the EPA and make it more difficult for Guyana to start exporting milled rice, for which Guyana will soon enjoy duty-free and quota-free access through the EPA, and profits from a substantial preferential margin, compared to other exporters, such as the US.
According to the ministry, the ACP Council of Ministers, in a resolution adopted from the meeting, agreed to address this and other issues in consultations within the next few weeks in Geneva.
Dr Jeffrey has since engaged his Surinamese counterpart and written to the European Trade Commissioner, Peter Mandelson, on the matter.
“The ministry continues to collaborate with all stakeholders, including the Guyana Rice Development Board, Caribbean Regional Negotiating Machinery and the Guyana Embassy in Brussels, to garner support.
Meanwhile, Minister of Agriculture Robert Persaud, last evening, said that while it is just a proposal, Guyana is not sitting idly by as there is a strong feeling about the issue.
Rice should not be treated as a “tropical product,” since it is a highly sensitive issue, especially with what is happening on the world market.”
He echoed Minister Jeffrey’s reassurance that Guyana will be working closely with its counterparts, and noted that Guyana is paying close attention on the world stage of the happenings, and it was this alertness that picked up on the proposal.
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