WONDERFUL GOVERNMENT!

Nov 01, 2015 Features / Columnists, Peeping Tom

It was wonderful news! It could not have come at a better time.

This past week it was revealed that Guyana had secured important markets for rice in Portugal and in Mexico. This is welcome news considering that Guyana had carelessly and unnecessarily lost the Venezuela market.

The loss of the Venezuelan market would have send shockwaves throughout the rice farming community. It created uncertainty amongst rice farmers.

This happened at a time when rice production was at historic levels. There were already concerns that even with the Venezuelan market intact there was a glut of rice and a need to find markets for the increased production.

Rice is stacking up in the silos and there were no markets for this rice. The amount of rice being exported was also too much for the ports in Venezuela. And so the Venezuelans had to ask that no more ships should come since they could not handle them.

Guyana was therefore heavily reliant on the Venezuelan market even though the new government had tried to suggest that it was not that important and that other markets were being pursued.

The Guyana government’s intemperate and belligerent outbursts against Venezuela and their failure to send a delegation to that country to discuss the problems that had arisen, led to a total breakdown of dialogue. In the end the Venezuelans had no choice but to source their rice from Suriname.

Guyana was reckless. It should have secured the Venezuelan market while defending its right to Guyana territory. The two were incompatible objectives but the inexperience of the new government showed and Guyana found itself in a deep mess and consequently surrendered a major market that had allowed local farmers to enjoy high prices.

The Venezuelan market cannot be easily replaced. It allowed for large quantities and high prices for rice. It also allowed for a barter agreement with rice being traded for oil. Venezuela also lends the monies that are used for oil. With Guyana now buying its oil from Trinidad, Guyana will have to find the money to pay for it. This will place further strains on the economy.

The agreements inked with Portugal and Mexico for the purchase of rice should provide comfort for rice farmers. These farmers have been receiving very poor prices for their paddy this past crop. Some farmers received as low as $1,500 per bag of paddy which cannot cover the costs of production. Many farmers therefore suffered a loss this past crop and would have been considering whether it was worth replanting for the first crop of next year.

The new markets will give the farmers confidence that they can replant and that there will be markets for future production.

While it is unlikely that with these new markets, farmers will enjoy prices as high as $4,000 per bag as they did in the past, these new markets should ensure that prices will rebound. $3000 a bag should not be a bad price for farmers, even though at that price many of them will hold their heads and complain that they are running at a loss.

The long- term future of rice needs to be considered. The future of rice cannot continue to revolve around the existence of major markets. The rice markets are heavily concentrated around a few countries.

Caricom must be encouraged to buy more rice from Guyana. Unless this happens it makes no sense for Guyana to continue to support the regional integration movement because when it comes to trade, it is one country and one country alone that is reaping the vast majority of the trade benefits in Caricom.

It is time for Caricom to buy more of Guyana’s rice. If they do not, we should not be buying their products, including their oil.

We should not worry about any backlash. We will soon be trading rice by the shiploads to Portugal and Mexico.