Latest update October 21st, 2024 12:59 AM
Sep 30, 2017 News
-blames Coalition Govt. on loss of Venezuela contract
The Guyana Rice Producers’ Association (RPA) is raising questions about two markets that the
country has entered. Yesterday the association said that there seem few benefits for farmers.
The association pointed to a recent Kaieteur News headline on Tuesday titled ‘Sugar, rice responsible for increase in non-performing loans- Finance Minister”.
“Since early in the second half of 2015, the Guyana Rice Producers’ Association (RPA) warned about the decline in the future of the rice industry due to the loss of the 200,000 tonnes high price paddy/rice market to Venezuela.”
That 2015 contract to Venezuela was valued at US$113M and was secured by the then People’s Progress Party/Civic (PPP/C) Government.
But according to RPA, the current Coalition Government under President David Granger has managed to throw it away.
“In recognition of the loss, the RPA made several recommendations to the APNU/AFC Government to assist the rice industry to recover, but to no avail. The recommendations were not even responded to. The Government responded by increasing land, rent and D&I (Drainage and Irrigation) charges in Region Five from $3500 per acre to $15,000 per acre.
“And in some parts of Region Four, the increased charges were from $5000 to $15,000, effectively placing more burden on the farmers.”
The association said that the PPP, in Opposition now, even tabled a motion in the National Assembly to address the plight of farmers and the industry but that motion seeking relief was defeated by the “APNU/AFC one seat majority. Today, the APNU/AFC Finance Minister is talking about non performing loans in the sector.”
With regards to the “much touted” Mexican market, RPA said that according to the Prime Minister, Moses Nagamootoo, this market would have replaced the 200,000 metric tonnes Venezuela one.
“So far we have seen small shipments of only paddy going to Mexico at prices that contribute to further pauperising the farmers. The government remained silent on the RPA public pronouncement that the Mexican deal is not good for the industry because of the price and other conditions of purchase.”
With regards to the Cuban rice deal being handled by Nandpersaud and Company Limited, the association noted that the rice was for 7,500 metric tonnes of rice worth “US $3.5M.”
“A simple calculation will inform that this is at a rate of US$466.66 per mt. Several questions arise about the conditions of sale. What are the payment terms? Is it FOB (Freight on board) destination? Or is it FOB origin? Is it a CIF (Cost, Insurance and Freight) contract? Some millers told the RPA that they were offered US$400 per mt to supply rice to this market. A price that did not find favour with them, a price that is too low to be of help.”
RPA said that while it welcomes new and renewal of old markets for exports, it should not be on unfavourable terms and conditions for farmers.
“From all indications it would appear that the Cuban and Mexican markets, to besides being a small percentage of our export is also of a low price that will contribute to further increase in non-performing loans that the Minister of Finance has recently awaken to.”
While RPA is blaming the administration for the loss of the Venezuela rice market, it was that neighbouring country that took actions to end the deal.
It was initiated when Hugo Chavez, a former military strongman, was at the helm of that country in the mid-2000s.
Extending generous oil concessions to countries in the region, including Guyana, Chavez and Guyana struck a deal for rice to be sold in return for oil.
However, on entering office in May 2015, the Coalition Government learnt that oil has been found offshore Guyana by US-owned ExxonMobil.
Venezuela, under a new President, Nicolas Maduro, immediately laid claim to the waters where the oil was found.
Ships with rice from Guyana were not able to make it to the ports of Venezuela. Oil from Venezuela, under the now infamous PetroCaribe arrangement, was also halted.
It left Guyana, with a large surplus at the end of 2015.
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