Showdown looms between Govt., farmers over rice industry
An independent group of rice farmers is claiming that the industry is in a huge crisis with a massive
Rice Miller/Farmer,
Dr. Turhane Doerga
cover-up by Government.
However, the Ministry of Agriculture yesterday, while acknowledging that there are problems, insist the situation is not that bad.
According to Rice Producers Association Action Committee (RPAAC), it will be hosting a press conference today at the Georgetown Club to talk about the troubles in the industry.
It said that more than 100,000 tons of paddy from the last crop is still at rice silos around the country with no markets. In the next three weeks, more than 400,000 tons of paddy will be harvested and no arrangements have been made to find market for this new intake.
“This impeding crisis has been created as a result of the unnecessary control of the industry by the Minister of Agriculture, Leslie Ramsammy, and his PPP cronies at the Guyana Rice Producers Association, a front-organisation of the PPP and the Guyana Rice Development Board. The rice industry is the only private sector entity that is legally controlled by the state through an Act of Parliament,” said a statement from the group yesterday.
Minister Ramsammy, in his own statement a few hours later insisted that the group is politically motivated.
The group said that rice farmers and millers have little or no control over the marketing of their paddy or rice and warned that there will be little buying this crop unless markets are found.
It said that the “much-advertised” PetroCaribe deal with Venezuela was offered to families and friends of the ruling PPP to the detriment of the industry, as a whole.
Agri Minister, Dr. Leslie Ramsammy and GRDB’s GM, Jagnarine Singh.
“Rice farmers in Berbice and Essequibo Coast are still owed a huge amount of money from the previous crop. Both Berbice and Essequibo rice farmers have taken their anger to the streets – burning tires and other materials to highlight their financial crisis and their inability to pay their debtors and look after their families.”
Rice Like Sugar
RPAAC said rice farmers are very fearful that the rice industry will end up like the sugar industry, which is being sustained by taxpayers to the tune of billions of dollars, with no resolution in sight.
In his reply, Minister Ramsammy said that the rice industry of Guyana continues to re-write the record books and create new success stories.
“In spite of the doomsayers, the industry has grown phenomenally. There are some simple truths about the Guyana rice industry that no one can dispute with any credibility.”
He said the People’s National Congress destroyed the industry in the 70’s and 80’s.
He accused executive of Alesie Group, Turhane Doerga, of being one of the beneficiaries under the PNC.
Ramsammy admitted that while the industry broke production records last year, there are serious constraints.
“The facts speak for themselves. In 2014, rice production was 635,000 tons and rice export was 501,000 tons. The self-styled experts repeat the false tale that there is no export market. But the rice export last year increased by more than 105,000 tons, or more than 25% over 2013 export. The 2013 export itself was about 20% larger than the 2012 export. Guyana has increased its export between 1990 to now by more than 1,000 %. The truth is that when the PNC was in control, supported by these same self-styled experts, Guyana could not produce enough rice to meet local demands and even if we did, we did not have sufficient market.”
This year, Guyana will add “sizable markets” in other countries, particularly African countries. “We are presently negotiating a supply of more than 70,000 tons to one African country. While we leave the private sector to service the market, the Government has been opening up these markets.”
The Minister said that the major constraint in entering a competitive international trade regime is that these require waiting for payments.
“Our international trading partners have requirements that necessitate a waiting period for payments. This situation has created hardships for the industry that has resulted in millers and exporters not paying the farmers on time.”
This is a problem that farmers understand, but it creates tension between farmers and millers. “The Government of Guyana has not been on the sidelines, doing nothing. Indeed, even though the cultivation, milling and processing and export have been exclusively in the hands of the private sector, the PPP/C Government has intervened to facilitate the industry and reduce the impact of late payments.”
$5B Revolving Fund
He said that in 2014, a revolving amount to reduce waiting time for farmers and millers, amounted to almost $5B.
“The industry in 2014 produced paddy worth more than $44B. Of that amount, more than $43B was paid out to the farmers by millers. An amount of less than 1% is presently outstanding to the farmers and the Government has been working to ensure that this amount is fully paid off before the harvesting for the first crop of 2015 begins.”
The regulatory, Guyana Rice Development Board (GRBD), estimates that the millers have about $20B outstanding to them from rice and paddy they have exported and awaiting payments and also from rice and paddy still to export. “While the banks have allowed overdrafts, this amount is too large for the banks to accommodate. The Government of Guyana, protecting the interest of farmers, has stepped in to ease the difficulties.”
Ramsammy denied that 140,000 tons that were still in stock in the mills at the end of 2014 represents a failure to find markets. “Indeed, the rice industry in every rice-producing country will have an amount remaining at the end of the year. For the three month period between January and March when no paddy is produced, the country has to maintain a stock that will meet local demands and also to ship to clients who require shipments during that period.”
For January, the stock was further depleted when 40,000 tons was shipped with another 35,000 tonnes shipped in February.
“With shipment in March expected to be around 40,000 tons, the remaining amounts of rice and paddy from 2014 would be fully depleted meeting local demands. This was another blatant attempt to misinform and lie to people.”
