Suggesting rice and gold sectors are in crisis is a fear-mongering tactic

Feb 05, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – The suggestion that rice and gold are sectors that are in crisis is a fear-mongering tactic. While gold experienced contraction last year, the challenges are explainable and resolvable and do not amount to a chronic decline.

As the Minister of Finance explained, rice production expanded in 2021 even though there were the lingering effects on the sector caused by the 2021 floods. It is estimated that rice production and productivity increased in 2022 relative to 2021. And that growth appears to be impressive, averaging more than 8%, a feat considering the steep hike in fuel and fertilizers costs.

Rice exports netted some US$185M in 2022. The introduction of new varieties has yielded an increase of 40% in yields, which ought to compensate for the increased input costs.  And with a new market opened in Lebanon, it can hardly be claimed that the rice sector is in crisis.

The plans announced by the Minister of Finance for the rice sector do not approximate to recovery plans but rather to efforts to boost productivity and improve crop resilience. These plans include investing G$300M to improve production, yields and to expand drying facilities, develop new varieties and secure additional markets.

There is no doubt that the conflict between Russia and Ukraine has led to a steep increase in the price of fertilizers. And this has increased production costs. But with the continued bottlenecks to trade in other grains, the price which rice fetches on the world market is expected to increase in 2023, thereby compensating for the increase in input costs, including that of fuel and fertilizers.

This is not to suggest that everything is rosy in the local rice sector. Persons who are planting small acreages, less than 10 acres, are not likely to do well in 2023. In fact, some of them have not gone back to crop because of the rise in the price of fertilizers and the effects of paddy bug infestation. It is therefore naïve for anyone to believe that rice farmers will do better by planting smaller acreages. The small cultivation cannot be profitable in this day and age and should have long been phased out.

All of these facts however will not deter the naysayers in the Stabroek News. An editorial in yesterday’s edition sought to suggest that rice may be in as poor shape as sugar. The Stabroek News sought to arrive at this position by interviewing a few small farmers without undertaking a proper assessment of the overall sector. Its conclusions represent gross exaggeration and hysteria. An 8% growth is not an insignificant increase in output.

Rice production, in fact, should be expanded utilizing abandoned sugar lands. There are limited properly drained and irrigated lands available at present for expanding rice production. And if government is keen to expand the output of rice, it ought to be looking at converting unused cane lands into rice production.

The government has ambitious plans to expand grain production, including rice.  Rice production is expected to reach almost 850,000 tonnes by the end of 2025. This however would require expanding cultivation for which new lands will be needed; this target cannot be reached by merely increasing yields.

There are obviously problems in the sector. Drainage is one of these. Reducing the fees for land leases for farmers without increasing drainage fees is not going to assist. Farmers who are making money in the sector – and many of them, despite their whining –are filthy rich – must pay more for drainage fees. The APNU+AFC went about increasing fees in a rash manner but there is a need for cost recovery for drainage and irrigation services.

GUSUCO should undertake to import fertilizers in bulk for the rice industry and to rent out machinery for field cultivation. This can be part of the efforts to diversify the sugar corporation’s activities. It is possible for farmers to enjoy cheaper costs for fertilizers and spend less on renting machinery from other farmers, if the same services can be provided competitively from the sugar company.

The rice industry cannot be modernized while feudal relations still exist. There are still too many persons whose lands are being worked by others for a fee while making little or no investment in improving the lands.

Feudal relations exist outside of land rentals. Many rice farmers are forced to sell to particular rice millers since they take monies from these millers for cultivation and reaping. There is therefore room for modernizing rice production and to include reforms to financing rice operations and land use. Unless this happens no amount of investment by the government will provide security for rice cultivation.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• decline, gold, Peeping Tom, sectors, tactic

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