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Rice farmers mull court action

Jul 10, 2010 News

Rice farmers are not ruling out a class action against the Mahaicony Rice Mills (MRM) as pressure mounts over non-payments.
The issue now has authorities, who in addition to contemplating more legislations to ensure payments by millers, are looking to introduce measures that would reduce monopolies in the industry.
Farmers of East and West Berbice joined Region Two, Essequibo, to contend that they are owed almost $400M from the last rice crop.
This is threatening farmers’ ability to prepare for the second crop, agriculture officials were told on Thursday.
According to one Berbice farmer, he is owed $1.5M by the company.
Agricultural officials, including Minister Robert Persaud, during a visit to Regions Five and Six,
admitted that they were experiencing “serious problem” with miller over the payments.
A release from the government yesterday, noted that the role of the state is ensuring that contracts are honoured.
According to Minister Persaud, from Essequibo to East Berbice, “a serious problem exists with Mahaicony Rice Mill (MRM), a company that controls 40 percent of the rice milled along the coast and has had its licence suspended in 2009.”
Outlining Government’s position in this regard, the Minister was convinced that “the company is using Guyanese farmers as a banking system, selling their products, receiving payment and not remitting the funds to farmers.
“There is a move by government to break the monopoly that gives the company significant influence over the price of the product.”
The official said that the industry could be in danger if MRM is ever unable to service the needs of farmers.
Government, he said, is reviewing legislations related to market share and monopoly control to ensure fair market distribution.
The broken monopoly of Microsoft was cited as an example.
According to Persaud, with MRM being referred to as an unreliable player in the rice industry, it is abusing the buying incentives given to it, and holding farmers and the industry to ransom.
The Minister noted that addressing the matter of unscrupulous practices has seen government take legislative action in the past, by amending the Rice Factories Act to ensure half payment for products within two weeks of initial acceptance of farmers’ stock and complete payment at the end of 42 days.
Further, it was made mandatory that 95 per cent of all individual transactions be paid before milling licences are issued for a new year.
The Minister made reference to the lucrative Venezuelan market which was secured late last year, providing competitive prices- $520 for paddy and $700 for white rice, with the most recent shipment having left on July 7.
“This was an effort to ensure that farmers are properly compensated for their investment and work and retain a long-term market in Venezuela, to which they can tap into the potential of direct export, accessing a price above that which the miller gives and to stop millers from dominating and dictating prices,” the Minister said.
Authorities, including the Guyana Rice Development Board, are currently exploring the introduction of legislation that millers deposit  between 10 and 20 per cent on payments at the beginning of the year, in the event that they are unable to pay farmers.
Stressing that the MRM’s practices are exploitative to farmers, the Minister noted that such behaviour is one of the perils of free enterprise.
With government placing special provisions in place for trade transactions on rice to protect farmers more, unlike other products, it is therefore why there is need for heavy concerns, Persaud said.
“Considerations are in place to apply legislative penalties for millers who violate the terms of contracts and fail to pay farmers on time, including withholding of licences of the company.”
The Minister indicated that if farmers collectively file class action lawsuit against MRM, legal representation will be provided on their behalf.
He encouraged farmers not to be intimidated- to use their powers as citizens and the support of the state, which is available to them.

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