THE LOSS OF THE VENEZUELAN MARKET WILL AFFECT THE RICE INDUSTRY

October 27, 2015 | By KNews | Filed Under Features / Columnists, Peeping Tom, Source

The rice industry is reeling. The loss of the Venezuelan market because of the approach of the government to the maritime issue with Venezuela means that rice exporters will lose a critical market.

It was recklessness on the part of the government to not have considered the effects of their attacks on Venezuela and on the market for rice. The obsession with reliving the days just after Guyana became independent when Guyana faced the same threats as it is facing now, has led to the same responses now as was used then.

This time though, Guyana has lost out because no one else is going to pay the high prices paid by Venezuela for Guyana’s rice. No one else also is going to barter our rice for oil.

The government must explain to rice farmers why they did not make greater attempts to meet with the leaders of Venezuela considering the value of the rice market. Digging in our heels is not going to increase the price of rice or find a replacement market for sugar.

There is no substitute for the Venezuelan market. The new government has dug a deep hole for rice farmer and this is a hole that is not going to be filled for some time.

The prices being paid at the moment for the various grades of rice are not going to encourage many farmers to replant for the first crop of next year. Right now, many farmers are waiting on the rains and the Doppler system is not advising them when these rains are likely to come.

Guyana’s cost of production of rice is high. It is high even though yields have improved tremendously over the past few years. It is high because farmers are not willing to experiment with new varieties for fear of losses. It is high because farmers are relying too much on fertilizers rather than better land preparation to improve soil fertility.

The cost of production is high because drying and milling costs are high. Cost of production is high because land preparation costs are high.

The cost of production is high because acreages are too small. The cost of production is high because even during the era of cooperative socialism, Burnham refused to bring rice production under collectivist farms because some of his party’s major supporters were rice barons.

You cannot plant a 40 acre plot and expect to have a low cost of production. This is one of the major problems facing the rice industry and unless the government moves towards consolidating production by encouraging small farmers to come together, the situation will not get better.

The lands have to be prepared better. Fertilizers are not the answers. These fertilizers seep into the drainage canals and encourage the rapid growth of weeds which in turn compromises the drainage systems.

Farmers need to experiment with new varieties. Major rice-producing nations undertake research on new varieties of rice. They are not going to share that with the rest of the world easily. As such Guyana has to invest in research of developing its own high-yielding varieties rather than importing these varieties.

Some years ago there was a successful experiment with complementing rice farming with fish cultivation during the period when the fields were flooded. This is one way in which there can be cross- subsidization of rice production. The value of the fish produced can be discounted from the cost of production of the rice thus allowing for a subsidized cost of production.

The countries that produce rice cheaper than Guyana has state farms; they have both large and small farms. They obtain massive state support. They have large populations and a large internal market to stimulate production. We have none of these things.

The solution to woes of the rice industry requires radical change. Unfortunately both the government and rice farmers have been timid towards radical change and therefore Guyana plods along, waiting for another stroke of luck, some new market and some agency to lend them money to dig them out of debt.

They may have reached the end of the road with the loss of the Venezuelan market.