The truth about the Venezuela rice deal

Apr 27, 2014 Letters

Dear Editor,
I read an article last Sunday concerning the rice industry which raised serious questions over its management.
I have waited a few days as I wanted to see the reaction of the relevant authorities. However, there has been deafening silence.
The undersigned is an ex-employee of a large rice mill and knows all the ‘insides” of this sad situation and given the fact that there has not been a massive reaction from the farmers, tells a story.
As a firm supporter in the past of the PPP, I will never forget that it was (Dr. Cheddi) Jagan who promised in the 1992 election that the first thing he would do is change the Constitution.
He did not live to do so. Today, the party markets racialism successfully and fooling the Amerindians is still a normal thing.
Coming back to your statement of the middleman, I will explain to you why it is worse than you think.
The price of the paddy that Guyana is enjoying is US$520 per metric ton which is about US$175 over the world market price
Firmly note that when this lucrative deal was not there the farmers were getting between $4500-$6500 per bag of paddy. They are now getting the fantastic price of $3500 per bag.
How awful is this situation?
These are the charges GRDB is applying which is making the price of paddy drop:
Wharfage: US$12 per MT – the highest in the world for bulk shipments.
Please note that Guyana had a bulk rice terminal at Water Street. However, it has been privatized and is now a stone depot. International.
The Rice Lab is being paid US$3 per metric ton – they received 750.000 tonnes x US$3 = US$2.25M ($450M). This is a company which is owned/headed by a foreigner.
Then there is the commission of US$7 per metric ton which goes to GRDB. This adds up to US$5.25M ($1.050B).
Then there is one more commission of US$2 per MT which GRDB collects US$1.5M ($3M).
There is fumigation cost: US$3 per MT which translates to US$2.25M which makes it the most expensive fumigation on earth.
To knock is off is a questionable charge under the heading “Social Fund”. This started off at US$20 per MT and is now US$9 per MT. One can estimate based on the rice shipped to Venezuela that the “Social Fund” collected around $2.4B ….the big question is what is happening with all that money and who is in charge of it ? Is it the same as the Lotto fund?
Finally your concern about the shipping which is charged at a tune of US$58-65 per metric tonne ton.
Anyone in shipping will let you know that a voyage of only maximum two days will in the top cost you between US$28-34 per metric ton which makes your estimates excellent. This is true as we saw a charter party to Portugal of US$62 per metric ton which is a 15 days voyage.
If you investigate this whole situation you will see that there are a few new players such as the brother of a sitting Member of Parliament and a popular businessman involved in the hotel business now in the rice industry.
A senior official of the rice producers’ association is also benefitting from the Venezuela deal with a quota.
There is more bad news for the farmers. While the new contract for Venezuela is 200,000 metric tons for the year, the big question is what will happen to the remaining 150.000 tons that will be produced and the 80,000 tons left over from last year.
The real traders are just watching it unfold and are anxiously waiting to see “the professionals” at GRDB solving it.
In the meantime, farmers are being fooled with the normal statement: It is the millers who set the price. Pathetic!
The only conclusion is that the rice farmers are being massively ripped of by their own leaders. For me, it is over as I have self-sponsored and am leaving Guyana as I could not take it anymore.
An insider

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The truth about the Venezuela rice deal

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