Rice industry at boiling point

Mar 01, 2015 News

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– farmers ready to endorse Opposition – Alesie

The rice industry is facing a deep crisis with no markets for a significant quantity that will be generated in the coming crop.
The situation may even cause millers to reduce purchases of paddy and definitely affect the price being offered to farmers, says Dr. Turhane Doerga, senior official of Alesie Rice.
Doerga, a fierce critic of the way the rice industry is being managed, issued the warnings during a press conference on Thursday at the Georgetown Club.  He is part of the Rice Producers Association Action Committee (RPAAC), a breakaway faction of the Guyana Rice Producers Association (RPA). Also there was RPAAC’s official, Jinnah Rahman, a rice farmer from West Demerara.
Guyana has been breaking production records in recent years, with more than 630,000 tonnes of rice produced in 2014. A record-breaking 500,000 tonnes was exported last year.
But according to Doerga, more than 150,000 tonnes was left over from last year. With another 400,000 tonnes of paddy coming in within a fortnight, the situation is dire.
RPAAC said it is now preparing to endorse the Opposition with the message to be taken to farmers countrywide, Doerga vowed.
Last week, while admitting that the industry was in for setbacks because of late payments to millers, Agriculture Minister, Dr. Leslie Ramsammy, denied that there was a huge surplus. He said that in January, the stock was depleted when 40,000 tons was shipped with another 35,000 tonnes exported in February.
“With shipments in March expected to be around 40,000 tons, the remaining amounts of rice and paddy from 2014 would be fully depleted meeting local demands.”
Doerga told reporters Thursday that the industry is nearing boiling point with protests ongoing in the regions.
While the Guyana Rice Development Board (GRDB) has advanced a number of millers money to pay off farmers, these millions of dollars went to friends of the government.
Doerga said that GRDB has moved from being a regulator to a trading company deliberately positioning a number of close friends to benefit from the Venezuela oil-for-rice deal.
“In their quest to make as much money as possible, they siphoned off billions of dollars and reduced the farmers’ price by more than 50 percent.”
He said that the industry will need billions of dollars to bail out farmers as millers will be dropping their prices because of the situation.

Within the last few weeks, there have been protests in Anna Regina, Region Two; and in Black Bush Polder, Region Six.
In dollar amount, paddy sale by farmers last year would exceed US$45M, with export earnings of over US$250M.
“This impeding crisis has been created as a result of the unnecessary control of the industry by the Minister of Agriculture, Leslie Ramsammy, and his PPP cronies at the Guyana Rice Producers Association, a front-organisation of the PPP and the Guyana Rice Development Board.
The rice industry is the only private sector entity that is legally controlled by the state through an Act of Parliament,” RPAAC said in a statement last Wednesday.
It said that the “much-advertised” PetroCaribe deal with Venezuela was offered to families and friends of the ruling PPP to the detriment of the industry, as a whole.
“Rice farmers in Berbice and Essequibo Coast are still owed a huge sum of money from the previous crop. Both Berbice and Essequibo rice farmers have taken their anger to the streets – burning tires and other materials to highlight their financial crisis and their inability to pay their debtors and look after their families.”
In his reply, Minister Ramsammy said Wednesday, that the rice industry of Guyana continues to re-write the record books and create new success stories.
“In spite of the doomsayers, the industry has grown phenomenally. There are some simple truths about the Guyana rice industry that no one can dispute with any credibility.”
GRDB has been defending the problems the industry which was not so much as market but rather price.
In addition to Panama, GRDB is now in negotiation to enter a key market in the Caribbean with a meeting set for this week.
“That fact is that we have been exporting much more. We are no longer benefiting so much as a protected market. Rather, we are exporting to the world market. So it is an issue of millers waiting on payments.”
But Doerga on Thursday warned that with that amount of surplus, Guyana should have started to look at establishing mechanisms to deal with the commodity markets.
“They need experts. It is simple. You can’t have little boys running this industry at the detriment of poor farmers.”
The Agriculture Ministry said Wednesday that this year, Guyana will add “sizable markets” in other countries, particularly African countries. “We are presently negotiating a supply of more than 70,000 tons to one African country. While we leave the private sector to service the market, the Government has been opening up these markets.”
“Our international trading partners have requirements that necessitate a waiting period for payments. This situation has created hardships for the industry that has resulted in millers and exporters not paying the farmers on time,” Ramsammy said of the late payments.
“The Government of Guyana has not been on the sidelines, doing nothing. Indeed, even though the cultivation, milling and processing and export have been exclusively in the hands of the private sector, the PPP/C Government has intervened to facilitate the industry and reduce the impact of late payments.”
He said that in 2014, a revolving amount to reduce waiting time for farmers and millers, amounted to almost $5B.
“The industry in 2014 produced paddy worth more than $44B. Of that amount, more than $43B was paid out to the farmers by millers. An amount of less than 1% is presently outstanding to the farmers and the Government has been working to ensure that this amount is fully paid off before the harvesting for the first crop of 2015 begins.”
GRBD estimates that the millers have about $20B outstanding to them from rice and paddy they have exported and are awaiting payments. There are rice and paddy still to export. “While the banks have allowed overdrafts, this amount is too large for the banks to accommodate. The Government of Guyana, protecting the interest of farmers, has stepped in to ease the difficulties.”

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