Mahaicony Rice Limited finally meets with Govt.

Oct 17, 2010 News

… says US$1.5M payments forthcoming

The long awaited meeting between Mahaicony Rice Limited (MRL) and the Government has finally come to pass. On Friday morning, Minister of Agriculture, Robert Persaud met with CEO of MRL Mr. Jai Beni in his office at the Ministry.
In recent months the company has been at the centre of significant controversy in the local rice industry over their failure to pay farmers for product purchased in the previous crop. These payment issues arose when the multinational company began experiencing cash flow problems in the wake of last year’s global financial crisis, and as such was unable to honour its commitments to the local industry, where it holds significant investments.
Minister Persaud said Friday that Mr. Beni was invited to visit Guyana and discuss with Government what his plans are in terms of settling the outstanding amounts owed to farmers as well as the future operations of his company.
“We are aware that he has been looking at various options in having this amount reduced significantly at the earliest opportunity and he has assured us that there will be much more timely action on his part,” Persaud noted.
The Minister went on to say that he has been given all assurances that Beni’s operation “is very sound and is not encumbered in the banking systems” and that all the payments will be settled very early. An actual date for settlement was not stated, and when asked directly, Beni said that they were currently discussing a time frame with the Government which would eventually be disclosed. Nevertheless, the Minister also pointed out that the audit of MRL’s accounts announced earlier will still be undertaken, as soon as all of the requisite information is gathered for the investigation to be launched.
Earlier this year, several rice farmers, having become frustrated with MRL’s inability to pay, eventually came together and filed a lawsuit against the company. Four persons, including prominent Essequibo businessman, Arnold Sankar, have sued the miller for more than $200M in outstanding monies. The total figure currently outstanding is US$1.5M.
Jai Beni in his brief comment said, “We are trying to solve this issue.” He noted that his company is working very closely with the Government, the Guyana Rice Development Board (GRDB) and the Rice Producers Association (RPA). He also admitted that a large part of the blame for the situation that currently exists may rest on his shoulders since as he said, “… it may be my fault” for not meeting with the local authorities earlier.
Beni went on to point out that his company is very sound and noted that this was the first time that they were experiencing these kinds of delays. He also noted that to ensure the problem did not recur they were planning to work towards a closer relationship with the Government.
Almost 40 percent of the country’s rice is sold to MRL annually, but there have been fears that with their reduced purchasing power the company may actually buy less rice, leaving farmers with surplus product on their hands. In response to these fears, the Ministry opened up a portion of the US$38M Venezuelan rice market, as long as farmers meet the required health and phytosanitary requirements.
On September 22, MRL signed a draft agreement with the GRDB which sees the company passing its proceeds from selling Guyana rice on the Venezuelan market back to farmers, through a special bank account jointly administered by the GRDB. This agreement only covers the second crop for this year and on that occasion the Minister noted, “If this second arrangement works well and we are able to meet the target – we start supplying from next month – we’ll be looking for a greater share of the market.” Also present at the meeting were Mr. Dharamkumar Seeraj, General Secretary, Guyana Rice Producers Association and Mr. Jagnarine Singh, General Manager of the GRDB. Speaking for the RPA, Seeraj noted that he had looked at the records of MRL and he is convinced that the company is solid and has a solid asset base. He noted that the RPA is committed to working with Beni since they want the mills to operate, however, their priority is ensuring that the rice farmers get paid.

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Mahaicony Rice Limited finally meets with Govt.

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