$400M intervention… Half-price fertilizers for rice farmers

Nov 03, 2009 News

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– $180M to be invested for 12 drying facilities

 

By Leonard Gildarie

Rice farmers, hard pressed by low world prices and high cost of input, will pay half-price for fertilizers in the coming crop, as government also announces the construction of 12 new drying facilities across the country to boost capacity.

Additionally, a permanent revolving intervention fund for rice farmers is being looked at.

The fertilizer price subsidy follows a decision taken last week after rice officials, farmers and President Bharrat Jagdeo met. Farmers can expect receipt of the fertilizers as early as two weeks.

Making the announcement yesterday, Minister of Agriculture, Robert Persaud, revealed that following the $400M intervention into the rice industry by the government last month, meetings were held with farmers who decided that instead of cash, they wanted the money to be plugged into the securing of low cost fertilizers and more paddy-drying facilities.

Also present at the ministry’s Boardroom for the press conference yesterday were Jagnarine Singh, General Manager of the Guyana Rice Development Board; Dharamkumar Seeraj, General Secretary of the Guyana Rice Producers’ Association (RPA) and representatives of farmers.

 

FERTILIZERS

Stressing that the initiative is but part of a bigger plan to develop the industry by government, Persaud disclosed that out of the $400M, some $208M will be used to purchase fertilizers which will then be sold to farmers at half-price.

Each farmer can expect to receive up to 30 bags of fertilizers which will work out to an average of one bag per acre of rice planted. The RPA will be procuring the fertilizers.

The minister explained that the RPA already has a list of farmers and the necessary checks and systems are in place to ensure that the distribution goes smoothly.

Farmers will be issued vouchers by the RPA which they will use to purchase the fertilizers from outlets.

Meanwhile, the Minister also disclosed that government is looking to source low cost fertilizers from elsewhere. He was of the opinion that current fertilizer situation was being controlled by a “cartel” in the Caribbean.

Already, government has placed advertisements for the supply of fertilizers and bids are being evaluated. Government is hoping that it will be made available to farmers a little above cost price, instead of the current high prices.

 

DRYING FACILITIES

Additionally, some $180M has been set aside to construct 12 drying facilities in Regions 2,3,4,5 and 6. The emphasis will be placed in the Essequibo area which is suffering more because of the lack of such facilities.

Already a number of areas have been identified, including three acres from Region 4 and three acres in West Demerara.

According to the minister, the new drying facilities are crucial since they will allow paddy to be stored longer. Currently, without drying, paddy has to be moved almost immediately to the mills to avoid damage to its quality. Farmers who have the capacity to store paddy can have the bargaining edge when the time for negotiations come, Persaud said.

The minister noted that the $400M intervention is part of the plan to sustain the industry in addition to other measures.

These measures include legislation within the recently approved Rice Factories (Amendment) Bill which seeks to provide even more protection for farmers; tighten monitoring at the mills and buying centres; find new markets; support value added products and enhance research.

Persaud pointed out that a recent deal with Venezuela to buy 50,000 tonnes of rice valued at almost $3.7B is an example of one of the ways that the authorities are working to make the industry more profitable.

Meanwhile, Seeraj of the RPA stressed that the most vulnerable time for a rice farmer is immediately after harvest.

He echoed Minister Persaud’s statement that the paddy has to be rushed down to the mills earliest. With no processing, farmers are therefore at a disadvantage, and are forced in many cases to accept prices being offered. The situation is further compounded when there is a glut in the market.

According to Seeraj, last year’s rice prices on the world market, which were high due to a shortage, may not happen again in a hurry.

However, the current low prices being accepted in Guyana, almost $2,200 per bag of paddy is not reflective of the actual price on the world market.

“We should be getting much more.”

The RPA official disclosed that the body is looking at a farmer’s recommendation in which proceeds of the subsidized sale of the fertilizers will be placed in a revolving fund with some money coming from farmers.

While some farmers have suggested that they are willing to give up $100 from every bag of paddy reaped to the fund, Seeraj said that this was later brought down to $10 as farmers are already facing hardships.

The revolving fund will be used as a means of intervention into the industry and the RPA is hoping to approach donor agencies to further boost the fund for development purposes.

The RPA official acknowledged that while the $400M is not enough, as $4B would have been more desirable, the reality is that it is a start.

It is the hope that almost 25% of the paddy harvested can be dried and stored while prices are negotiated, he said.

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