Dear Editor,

We refer to your report headlined “PNCR says Rice Factories Bill sets unrealistic benchmarks for millers” (07.01.26).

The following is our response:

The Rice Factories (Amendment) Bill of 2007 is not a piece of legislation that would force anyone out of the rice industry and at the same time does not set unrealistic benchmarks for new entrants, it only seeks to regulate the sale and purchase of paddy. It will also ensure that the milers pay the farmers in a timely and realistic manner. The bill has two major amendments and they are as follows:

1. A clause is added to the Sixth Schedule where the manufacturer will pay interest to the producers after the date they had agreed for payment. This is not unrealistic since in the first instance the miller and the farmer agree on a date for payment. The bill does not specify any time for such payment.

It is therefore based on the ability of the millers to pay and the farmers to be owed, that a date is determined. It is fair that after such time interest be paid, because the farmers will also have to pay interest to the bank for money they borrowed to establish the crop. The interest of 2% above the commercial lending rate only acts as a deterrent to the millers who would want to extend this period, and also to those who use the farmers paddy as a form of finance to operate their business.

2. The second one is the inclusion of an additional clause to the condition for the issuing of licenses. In the principal act there are seven conditions to the license to manufacture rice; none has anything that deals with the indebtedness of the millers to farmers.

This additional clause will avoid the millers carrying over huge debts from one crop to another. It states that the total debt to the farmer shall not exceed 5% of the gross turnover for the preceding year. A miller’s license becomes due at the beginning of the calendar year, at this time his debt should not exceed the limit specified; this would have been four months after the start of the second harvesting season. Therefore, they would have had more than the required time to process and sell the farmers paddy.

These are not unrealistic benchmarks, they basically serve to ensure that farmers receive payment in a timely manner and to ensure that the trade between millers and farmers is done in a fair and transparent manner. This is no smokescreen, it seeks to ensure that astute business people are in the business of rice production.

Yours faithfully,

Abdool Hmid , P Persad

Moti Singh, PremKaran

and Satrohan Sookdeo