Rice and PetroCaribe

Issues pertaining to the state of the country’s rice sector and particularly the export sector have arisen in the media over the past few weeks. Last week, Agriculture Minister Dr Leslie Ramsammy provided the state-run Guyana Chronicle with an outline of the state of the rice industry, focusing particularly on ongoing discourses with other countries in the context of expanding Guyana’s external markets and creating domestic conditions that might help and encourage local farmers to increase production.

Up until now, it would appear that the conditions which attend the PetroCaribe rice for oil agreement with Venezuela provide sufficient encouragement for both the government and the rice sector. In his outline last week, Dr Ramsammy sought to dispel any domestic jitters over the future of PetroCaribe that may have arisen out of the current volatile political situation in Venezuela by announcing that a new agreement had been signed and sealed to Guyana’s satisfaction though, interestingly, he also said that the actualization of the new arrangement remained to be settled.

Not to be overlooked in this context as well is what some might term an excessively assertive show of support for President Maduro in a mid-February Government of Guyana statement declaring that “the Government of Guyana stands in solidarity with the Government of Venezuela and fully supports its efforts notwithstanding acts of destabilisation.” Robust and unmistakably critical of Mr Maduro’s political enemies in Venezuela, the statement might well be seen in some quarters as a pronouncement by Guyana that seeks – insofar as it can – to protect the PetroCaribe deal.

PetroCaribe may have derived from Hugo Chavez’s foreign policy vision that sought to reach out to Caricom in practical (economic) ways and, truth be told, a cheap supply of oil was perhaps the ideal instrument with which to accomplish that goal. On the whole, those Caricom PetroCaribe beneficiaries have been able to direct their minds to various energy-related economic initiatives. However, that cannot gainsay the point made by regional analysts regarding the fact that should the PetroCaribe bubble burst suddenly it would leave the beneficiary countries in something of a quandary.

In Guyana’s case PetroCaribe means, first, a readily available and highly valuable market for the majority of the country’s rice exports, on the one hand, and oil supplies at concessionary prices, on the other. There is no gainsaying that the simultaneous loss of both will hurt the Guyana economy in more ways than one.

Whatever assurances the Government of Guyana may seek to offer, the fact of the matter is that it is powerless to predict with any reasonable measure of accuracy the longer term future of PetroCaribe. Even if we assume that the Maduro administration is able to fight off its current political challengers, Venezuela’s current economic problems, including increasing debt and rising inflation are bound to cause the Caricom-wide PetroCaribe arrangement to appear increasingly politically conspicuous even among Maduro’s own supporters. So that even with the best of intentions, as far as his administration’s relations with Caricom are concerned, Maduro may well find that tinkering with PetroCaribe in a manner that at least reduces the concessions currently accruing to beneficiary countries might become a necessary political course of action.

While the Government of Guyana has assumed a public posture that seeks to communicate a high level of confidence in the continuity of PetroCaribe under a format that continues to be beneficial to the rice sector and to the economy as a whole, there are clear signs that it knows the existing status quo could change in the not-too-distant future. Perhaps it is that, more than anything else, that accounted for Dr Ramsammy’s twin-track approach in his recent pronouncement on the state of affairs in the rice industry; the first track being to ‘talk up’ PetroCaribe and the second being to spend significantly more time on what he says is Guyana’s increasingly assertive international rice marketing posture. This posture embraces what according to the state-run Chronicle newspaper is a “three-pronged policy” aimed at improving access to global rice markets, increasing market share in already existing markets and re-entering old markets. This might suggest that the Government of Guyana, without saying so directly, is beginning to hedge its bets, hoping for the longevity of PetroCaribe but earnestly hoping not to be ‘caught short’ by any sudden, perhaps unforeseen development across the border in Venezuela.