Govt mamaguying rice farmers…

– farmers could lose $$$ if prices not on par with lost Venezuela market

BY KRISTEN MACKLINGAM

Guyana will not be benefitting from a lucrative rice deal with Mexico should the APNU+AFC government move to

Prime Minister Moses Nagamootoo today clinched assurance from Agriculture Minister Jose Calzada

pursue this. While it may be a new market, it will not be an ideal market for the Mexicans unless Guyana accepts extremely low prices for its rice shipments to that country. Guyana Times understands that under the North American Free Trade (NAFT) agreement the primary rough rice shipment market for the United States of America (USA) is Mexico. Presently the First World country exports a large bulk of its rice to Mexico annually and has been doing so for many years. Guyana Times understands that last September, it was reported by “USA rice” online that one of the top packers in Mexico began shifting purchases back to US rice from Uruguay and other origins due to better prices, logistics and quality. Recently, as a result of a large price spread between Uruguay and the US, this shifted the origin preference back to the US especially since the packer noted his preference to purchase from the First World country because of logistic advantages and seeking higher quality US rice. It must be noted that the US already enjoys a significant quality, logistic and name recognition advantage in Mexico, especially against Asia. According to this report, Mexican imports of rice are still dominated by paddy rice, but a shift has been taking place. Paddy used to be 95 per cent of imports but has been reduced to almost 75 per cent with milled rice constituting the remaining 25 per cent. This newspaper also understands that in a recent report a few days ago by “USA rice” online the Trans Pacific Partnership (TPP) text confirmed that Mexico has agreed to eliminate all tariffs on rice imports from other TPP partners. “The United States already enjoys duty-free access for rice into Mexico because of the North America Free Trade Agreement, so the largest beneficiary of this move is Vietnam. Mexico has agreed to eliminate all import duties on rice except for milled rice on the day the TPP agreement enters into force. Milled rice duties will decline from the current 20 per cent by 2 percentage points each year for 10 years and this reduction will begin after entry into force which is unlikely to occur until 2017 at the earliest,” it said. The report went on to say that USA Rice COO Bob Cummings stated that his organisation faced an uphill battle in Mexico since it was evident that Mexico’s government intended to liberalize rice trade with its TPP partners. “The major threat is in milled rice and USA Rice worked closely with the Mexican Rice Council to preserve the US rice market in Mexico,” he reportedly said. “USA rice” has deemed Mexico the number one export market for US rice restating that paddy rice dominates US exports and Mexico’s imports.  However, it was also noted that the share of milled rice imports is on the rise, including from the United States, and Vietnam is likely to be a key competitor for the United States going forward. Meanwhile, if Guyana should ink a deal with Mexico for the exportation of Guyana’s rice into that country then it would end up costing more to have it shipped from Guyana to Mexico in comparison to what the US would pay when shipping their rice to Mexico. In fact, the US sells its rice cheaper than that of Guyana and even if a smaller country like Guyana were to compete with rice prices against the US, it would mean that rice farmers would have to sell their rice to millers at a very low cost. Should this happen in the case with Mexico and Guyana this would mean that not only has the APNU+AFC government caused the PetroCaribe deal with Venezuela to come to an abrupt end, but the administration would have failed to replace this lucrative market. Currently the rice industry in Guyana continues to crumble and rice farmers are frustrated and aggravated with the losses they are suffering. The price for an average bag of paddy is less than what it costs to produce and if they were to supply the Mexican market then they most likely will have to sell their paddy to millers at a cheaper price than it is being sold now. Guyana Prime Minister Moses Nagamootoo after attending the Open Governance Summit in Mexico City on October 27 where he met with Minister Calzada had stated that during that meeting a commitment was made by the Mexicans to buy some of Guyana’s paddy. Meanwhile, it must be reminded that statistics released by the administration revealed that Guyana’s production in the first half of 2015 was 359,960 tonnes, 15.3 per cent more than last year’s record high first-half production of 312,283 tonnes.

Sometime in July this year, Venezuela had issued a directive for Guyana to stop all paddy and rice shipments to the Spanish-speaking country with immediate effect. This took place months before the PetroCaribe agreement/contract was scheduled to come to an end. It was noted that the relationship between Guyana and Venezuela became extremely tense and subsequently deteriorated after the APNU/AFC Government made a decision not to allow the Venezuelan state-owned airline Conviasa Airlines, to land in Guyana over the non-payment of its bond. As time progressed, the two countries drifted from the cordial relations they were sharing for a number of years to the bilateral talks breaking down. Venezuela has officially severed ties with Guyana in relation to rice importation, causing the industry in Guyana to suffer even more since the deal with that country was by far the most profitable and rewarding. Meanwhile, according to the US Department of Agriculture Foreign Agriculture Service Export Sales Report for October 2015, the US rice exporters have shipped 298,721 tonnes of rice to Venezuela. During this time frame, Guyanese rice farmers were faced with major difficulties since Venezuela no longer accepted shipments of rice as was arranged in the PetroCaribe deal. Then in October, the Spanish-speaking nation inked another PetroCaribe deal with Suriname to see the exchange for fuel and rice at “favourable” prices, thereby knocking Guyana out of the agreement it had with Venezuela for a number of years. (kristenm@guyanatimesgy.com)

Sometime in July this year, Venezuela had issued a directive for Guyana to stop all paddy and rice shipments to the Spanish-speaking country with immediate effect. This took place months before the PetroCaribe agreement/contract was scheduled to come to an end.. (kristenm@guyanatimesgy.com)