PRESIDENT David Granger said that his administration is still actively pursuing the Venezuela rice market which ended shortly after his government took office. Although still constrained by strained diplomatic relations with the Spanish-speaking country, President Granger said that he has instructed both his ambassador to Caracas, Cheryl Miles and

PPP/C MP, Irfaan Ali

Finance Minister Winston Jordan to pursue the rice market there. Venezuela did not renew its oil-for-rice deal with Guyana under the PetroCaribe agreement following a flare-up last year of the decades-old controversy over the Essequibo. The President told reporters on Wednesday during his weekly televised programme, ‘The Public Interest’ that while the country is exploring new markets, it is also in pursuit of a new rice deal with its South American neighbour. He said he met with Ambassador Miles before she departed for Caracas and “did say we are interested in recovering that market.” The President said, “That agreement came to an end and we need to have a new agreement.” The Head of State explained that the Ministers of Foreign Affairs and Finance are currently working on securing a new agreement with the Spanish-speaking country. “…but we are also examining new markets particularly in Costa Rica, Panama and Mexico,” said President Granger who noted that all Ambassadors have a clear objective and mandate and that is to “sell rice and rum.”
Last year, before the expiration of the rice agreement between the two countries it became clear that Venezuela had no intention of renewing the oil-for-rice barter under the PetroCaribe deal. That deal ended in November 2015. As such, Guyana was forced to search for new markets for its rice.
The decision by Guyana’s neighbour to the West followed its claim of sovereignty over a significant part of Guyana’s territory. The Guyana-Venezuela border controversy erupted early May after American oil giant ExxonMobil discovered substantial amounts of oil in the Stabroek Bloc, located 120 miles offshore Guyana. Guyana strongly objected to the country’s claim and lobbied the international community in its bid to have Venezuela recant its position.
Last year, during a visit to Venezuela, Jordan said Caracas claimed that it had hinted to the People’s Progressive Party Civic (PPP/c) administration along with senior officials of the Guyana Rice Development Board (GRDB) that Guyana needed to look for new markets.
Minister Jordan said evidence illustrates that Venezuela had been reducing the volume of rice it was taking from Guyana over the past three years. Last July, just four months before the end of the PetroCaribe Agreement between the two countries Venezuela instructed Guyana to cease all paddy and rice shipments to that country immediately. Some 270 containers of paddy worth over US$5M was left stranded on the wharves.
PPP motion
Granger’s comments come even as PPP/C front bencher Irfaan Ali is slated to move a motion today in the National Assembly calling on the Government to re-engage Venezuela on the rice deal.
In one of his Whereas clauses, Ali pointed out that both rice farmers and rice millers are facing tremendous financial and economic hardships and many of them are unable to meet their obligations under loan contracts with commercial banks for which their homes and other assets have been lodged as collateral by way of mortgages and as a result, many of these properties are now in jeopardy of being the subject of foreclosures and sales.

Guyana’s Ambassador to Venezuela, Cheryl Miles

He is asking that the National Assembly calls upon the Government of Guyana to implement the following measures with every convenient speed: resume negotiations with the Government of Venezuela with the intention of selling rice and paddy to that country; immediately remove all forms of taxes and duties on fuel for the industry; remove all taxes and duties on inputs for the industry including machinery, equipment and spares; commence discussions with all the commercial banks lending to the industry to review terms and conditions of loans, taking into account the low prices farmers are getting in order to ‘soften’ repayment conditions; suspend payments for land leases and for drainage and irrigation; lay supplementary provisions in the National Assembly to provide financial support to farmers in order to aid in the purchase of seed paddy and fertilizers; immediately implement minimum export prices for rice and paddy; implement an aggressive marketing strategy in order to enhance current prices and secure new lucrative markets; and withdraw its pronouncement that the rice industry’s crisis “is a private matter” and give support to the industry, especially the farmers.
President Granger has repeatedly assured rice farmers that their problems have not gone unnoticed and that his government has been seeking viable solutions where reducing operational costs and creating new market opportunities are concerned. President Granger even raised the issue of finding new markets with colleague Heads of Government at both the regional and international levels.
The Government of Guyana, through the Ministry of Agriculture, continues to search for international markets for Guyana’s rice, ever since closure of the Venezuelan market. Agriculture Minister Noel Holder had also said that Guyana currently sells rice to 50 countries around the world.
Additionally, only recently the Guyana Rice Development Board (GRDB) and two Jamaican companies signed agreements that would see Guyana exporting rice to Jamaica — 48,000 tonnes in 2015 — almost doubling in 2016. The two agreements were signed between the GRDB and the Jamaica Rice Milling Company Limited and Musson (Jamaica) Limited for the importation of a total of 80,000 tonnes of rice from Guyana during 2016. The agreements seek to organise the supply of rice to the Jamaican market, and prevent underpricing and under-invoicing by suppliers. The agreement allows the Jamaican companies to buy rice from licensed rice millers/exporters in Guyana, and minimum orders of 1,500 tonnes will be given to mills for export. In addition to committing to import increased volumes of rice, the companies have also established a price schedule with the minimum price to be paid for white rice being US$400 per tonne. Prior to these agreements, the Agriculture Ministry noted, Guyanese exporters were receiving prices ranging from US$345 to US$370 per tonne. This means that Guyanese millers will earn between US$30 and US$55 additional per tonne of rice exported to Jamaica, or between US$2.4 million and US$4.4 million additionally per annum. With the increased price for rice, millers are expected to offer a higher price for paddy. For the first (spring) crop of 2016, some mills have been paying between G$2,200 (grade C) and G$ 2,700 (grade A) per bag of paddy. Millers have already begun to receive orders. One rice miller which has received a 3,000-tonne order hailed the agreement as a very positive step in the development of the rice industry of Guyana. Its owner has stated that he is “very happy with the agreement that the GRDB has signed with the two companies in Jamaica.” The GRDB will continue to provide marketing and business facilitation services to all stakeholders in the industry in its efforts at building a strong and sustainable rice industry.

PPP MP Irfaan Ali

Shadow Finance Minister Irfaan Ali has recommended that the Government of Guyana immediately take steps to reengage the Government of Venezuela in a bid to regain market for rice that was ceased by Venezuela some months ago.

Ali made the recommendation while debating a motion on the current state of Guyana’s rice industry. The recommendation to re-engage the Venezuelan Government was one of several out before the House by Ali.

“Mr Speaker, it is discernable that the relationship between this government and the Government of Guyana did not start off on the right footing. Mr Speaker, I will adumbrate the social and economic reasons why the Government should resume talks with Venezuela on the exportation of rice and paddy to this country,” said Ali.

He noted that failure on the part of the Administration to act in this regard the effects will be far reaching and detrimental to Guyana’s economy.

Others included tax breaks and fuel, water and electrical subsidies.

In July 2015, news broke that Guyana will no longer be exporting large quantities of rice to Venezuela, sending a wave of concern throughout the rice industry as the collapse signals a certain downturn for the sector, given the fact that rice farmers are fully dependent on the Venezuelan market to export their produce.

Under the scrapped trade agreement, Guyana is expected to supply 210,000 tons of paddy and polished rice annually to Venezuela. The value of this supply amounts to US$130 million.

It is understood that Venezuela has ceased all forms of trading with Guyana.

Meanwhile, Agriculture Minister Noel Holder stated that efforts have been made to resume shipments with Venezuela were “unsuccessful.”