$23B was set aside for paying outstanding PetroCaribe sums – Harmon

Sep 19, 2015 News

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By Jarryl Bryan
In the wake of protests from rice farmers demanding answers from the government on the $23B which was earmarked for the rice sector during the budget presentation, Minister of State Joseph Harmon has said that the money was set aside for paying off outstanding sums under the PetroCaribe agreement.

This was communicated during a post cabinet media briefing yesterday at the Ministry of the Presidency. Commenting on whether the money had been disbursed towards the shipment payments, however, the Minister pointed out that the budget had only recently been passed.
“The budget was only completed recently, and there are processes that are now being put in place. Funds are now being made available. Actual flow of funds would have been allowed once the President had signed into law the Appropriations Act,” Harmon said.
Minister Harmon noted that he could not be specific on whether the money had been paid.
The government’s official position on the crisis enveloping farmers, some of whom are still owed and are in deep financial problems, is that millers have already been paid for the rice and paddy they supplied to the Government, in keeping with obligations. Thus, it is left to the millers to pay farmers for their paddy.
This stance and the delay in credible information being provided has not gone down well with some rice farmers from Regions Two, Three, Five and Six, who have picketed the Ministries of Agriculture and the Presidency, in addition to the office of the Region Six (East Berbice-Corentyne) administration.
Under the PetroCaribe oil for rice agreement, Guyana bought oil from Venezuela at concessionary prices, while at the same time shipping as much as 34 per cent of its total rice exports to the Spanish speaking country.
Guyana is not the only country to have participated in the PetroCaribe agreement, as several Caribbean states have also signed agreements with Venezuela for oil.
For Guyana’s part in the trade agreement signed in 2009, Government established the PetroCaribe fund and agreed to pay a part of the money for the oil up front, with the rest to be paid over a number of years at a minimal interest rate.
Rice farmers and millers involved in the industry were to be paid from the fund. The Government would deduct the money and the Guyana Rice Development Board (GRDB) would disburse it.

Venezuela, a country with enormous oil producing potential but with a lackluster rice industry, would also benefit under the initiative, while Guyana- which recorded production figures of over 600,000 tonnes last year- would have a viable rice export market.
However, upon their entry into the Government following the May General and Regional Elections, A Partnership for National Unity/Alliance for Change (APNU+AFC) had announced that they found an ‘empty’ PetroCaribe fund.
It was later revealed by the Prime Minister Moses Nagamootoo that the previous People’s Progressive Party/Civic (PPP/C) administration had used the money to fund Government agencies and several projects- the Guyana Power and Light (GPL) is reported to have got US$115M, the Ministry of Housing got US$10M and US$16M went to funding the $3.6B Hope Canal project.
This, the Prime Minister had noted, was contrary to where the PPP had insisted the funding had come from during their time in office, which is the treasury.
Meanwhile, rice farmers and millers, who are no strangers to being owed millions because of late payments in contravention of the Rice Factory Act, were left to ponder when they would be paid. This also comes against the backdrop of record breaking rice production figures with each succeeding year.
The Rice Factory Act mandates that payments be made in full to rice farmers by millers within 42 days of receipt of paddy.
Things further unraveled when the new Minister of Finance Winston Jordan was told in no uncertain terms that the oil producing giant would not be renewing the oil for rice trade agreement under the PetroCaribe deal after it comes to a natural end on November 16.
Further revelations followed from the government side that the PPP had known that the Venezuelans would not renew the contract, but faced with upcoming General and Regional elections, had kept silent.
This is something that the PPP has unequivocally denied, and instead blamed the new Government for the empty PetroCaribe fund it reportedly inherited.
After coming into office, the Government released some $800M in June to the GRDB for payments to millers.
In July, a directive was given by the Venezuelan rice officials that Guyana must halt its rice shipments. It was later revealed that this was because Guyana was exceeding its shipment schedule. Millers were also told to take back their rice, which had been packaged for Venezuela, but was left sitting on the wharf.

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