GRDB ignores court order, milling co. files contempt order

Jul 12, 2008 News

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Despite a court order preventing the Guyana Rice Development Board (GRDB) from enforcing the suspension of the operating license of the Mahaicony Rice Mills Limited, the milling entity continues to face numerous hindrances from “the powers that be.”
This notion was articulated on Thursday by General Manager of the Rice Milling entity, Brandon Barton, during an interview with Kaieteur News yesterday.
According to Barton, his company was forced to take the matter to court, which granted a stay on the GRDB decision on June 30 last, preventing the enforcement of the suspension.
Barton disclosed that the GRDB is still claiming that it has the right, regardless of the court ruling, to withhold the operating license of the entity.
Recounting the circumstances that led to the suspension of the license, Barton admitted that the company had in fact engaged a practice which may be deemed inappropriate to some persons.
He explained that since the entity commenced operation in Mahaicony some nine years ago, a plan was adopted whereby the mill would afford farmers post-dated cheques for purchased paddy.
“Normally, they are supposed to bill us; but in this industry it is common for people to do an invoice on behalf of the farmer. That invoice has an agreement, which the farmers sign, that states that the farmer will be paid in 90 days. They are also advised to call before they attempt to encash their cheques, to ensure that sufficient money is available.”
This particular practice was inculcated, Barton said, because of the remote location of the mill, in order to reduce the inconvenience to farmers.
But even though 90 days is allotted for the payment to the farmers, he divulged, it is intended that farmers be paid progressively. Thus, by the end of the stipulated period, farmers should be in receipt of the full amount due them.
And according to Barton, the mill is required to purchase large quantities of paddy, valued at billions of dollars, an amount that no banking institution in Guyana can finance.
“If you ask a bank here for $300M it is a problem. So, since no bank will say ‘take this money,’ it is based on our trade that farmers will get paid,” Barton asserted.
He noted that the industry is of such a nature that it is almost impossible for one to deliver the product and be paid on the same day.
This, he said, materialised during the recent crop, when farmers attempted to encash post-dated cheques. These cheques could not be honoured since there was no cash in the accounts.
“We give them cheques today for payment three weeks from now. Nobody knows what will happen. If they check with us and money is not available, we would tell them to check another day.”
However, the situation saw the plight of the farmers being brought to Agriculture Minister Robert Persaud, who wasted no time in chiding the entity.
Yesterday, Barton admitted that in principle the practice engaged by the entity may not have been very appropriate, and thus assured that it will not be continued in the future.
In trying to find a solution to the problem, Barton said, it was brought to the minister’s attention that the entity could pay off the farmers if it is able to recover a sum of about $30M which the Guyana Revenue Authority owes it.
Barton said, “The minister, in effect, wrote a letter in the newspaper and lambasted us. He said that there is no connection with the VAT office owing us $30M and our payment to farmers, because we should have known at the time when we wrote the cheques if we would have had this money.”
In fact, Barton said, the reality of the matter was that, at the time that the cheques were written, the company was calculating and was aware that its cash flow had an outstanding $30M.
However, Barton added, when it was thought that the minister had done his worst, the minister informed that he would be instructing the GRDB and the police to take necessary action.
“Soon after, a letter from the GRDB arrived, signed by its General Secretary, Mr Jagnarine Singh, stating that our operating license has been suspended for issuing bounced cheques,” Barton noted.
But, according to Barton, there is no clause in the Rice Factory Act that stipulates that failure to honour a cheque was grounds for the suspension of an operating license. He said that it, however, does state that an entity should be given a hearing, and discussions should ensue as to the root cause of the problem, in order to find a solution.
“We expected that the minister, before putting something in the papers and taking the action he did, would have at least called us in and helped us find a solution…He didn’t…”
He also pointed out that, even with the order granted by the court, the entity has been prohibited from carry out business, and this has been hindering the entity’s ability to garner finances to pay off the farmers.
“I have to wonder what the real intention of the minister is. Is it to pay the farmers, or to put us out of business?”
But, according to a senior official of the Agriculture Ministry, despite all the legal efforts by Government, farmers are still being taken for a “ride” by some unscrupulous millers.
The official said that the Mahaicony Rice Mills Limited, which is one of the largest milling operations in Guyana, with the four rice mills and two buying centres, has been able to successfully engage in unprofessional business conduct.
The official related that the Ministry of Agriculture and the GRDB have moved to take action that is expected to ensure that the milling entity honours its financial obligations to the rice farmers.
The official admitted that the milling company in effect responded by seeking the intervention of the High Court, which has since issued to GRDB an Order or Rule Nisi of Certiorari.
This matter stands adjourned to next Monday.
It was also related that the GRDB has since requested from the milling company information relating to the amount of paddy purchased and the schedule of payment, a request which is yet to be honoured.
The official said that the GRDB had placed some advertisement in the newspapers requesting farmers with outstanding payments to report to the offices of the GRBD.
But, according to the official, “Our effort so far has had little success. They paid the farmers with bounced cheques and still have huge sums for them.”
This newspaper was also informed that the entity has purchased some 700,000 bags of paddy and the delayed payment practice is currently impacting on the replanting process for the second crop.
According to the official, based on assessment of the situation, it is the farmers who are now financing the operations of some rice mills, thus millers should understand that the farmers need finance to ensure a successful crop, in order to have a good quality paddy for their rice markets. 
It was further noted by the official that a Marshal of the Court, accompanied by the Manager of the Mills, Mr. Brandon Barton, served some court documents on the
General Manager of GRDB, Mr. Jagnarine Singh, for contempt of court.
This matter is to be heard on July 14 next.

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