Export commission on rice cut by 60%

-in bid to up price paid to farmers

Minister of Agriculture Robert Persaud yesterday announced a 60 percent cut of the export commission that exporters are currently required to pay to the Guyana Rice Development Board (GRDB), in a bid to allow millers to pay farmers better prices.

Persaud said that the commission will be lowered from US$10 per tonne to US$4, which is below the previous minimum mark of US$6. The Minister explained that this commission is paid into the Rice Development Fund of the GRDB.  He stated that this new initiative will result in approximately $240 million being at the disposal of the farmers but stated that this money should be used to offer farmers a competitive price. During the boom in the rice price last year, the export commission was raised on April 16, 2008.

Recently, there has been growing dissatisfaction over prices being offered by rice millers for paddy, as millers and exporters have had to grapple with the falling price of rice on the international market. Persaud, during yesterday’s meeting, stated that rice production has been increasing globally and consequently the prices are dropping by 20 to 30 percent in some instances.  He stated that although prices are declining and may reach below those of last year, he did not anticipate international prices falling below the 2007 figure.

The Minister of Agriculture was at the time meeting with farmers and millers as well as representatives from the GRDB and the Guyana Rice Producers Association (GRPA). During the meeting he stated that based on analysis conducted, a bag of paddy should not fetch a price less than $3 000.

He said currently farmers are being paid various figures from $2,500 upwards. Meanwhile, he also said that the situation with Mahaicony Rice Mills Limited (MRL) continues to be a major concern of his Ministry.  The MRL, the country’s largest rice mill, owes farmers in excess of $600 million for paddy bought during last year. Other options will be explored to ensure that this matter is adequately settled the Minister said.

Meanwhile, Persaud outlined other measures that his Ministry will be undertaking to help the rice industry.  He said that recognising the existing problems experienced by rice farmers in the Essequibo region of moving paddy from different production points to the various milling points, he approached the Transport Minister Robeson Benn for assistance. He said that the Minister has agreed to permit one of the two vessels currently operating on the Essequibo Coast to be utilised for the purpose of transporting paddy to the mills.  He, however, emphasized that this would have to be a collaborative effort to be undertaken on a needs basis.  The Minister further said that they will approach the management of the Berbice River Bridge to see if there is some arrangement that can be put in place to facilitate the easy transport of paddy.

Further, he said that he will be meeting with members of the banking sector on Monday to see what they can do in terms of financing and ensuring its availability for millers, exporters and farmers.

Meanwhile, members of the gathering also had their say. One miller stated that the government needed to realize that both the farmers and the millers were in the business to make a profit, but said that this was proving difficult due to the falling rice prices globally.

He said that during last year, millers made a loss since they purchased paddy at fairly high rates but suffered because of the reduction of rice prices.

Another miller suggested that an initiative could be undertaken to provide the millers with cheaper fuel by  removing  the tax on the commodity.  Persaud acknowledged that this was a possibility but stated that such an initiative had to be carefully analyzed before being implemented. He said that such a move would have serious implications such as a loss of revenue and would call for the implementation of other measures to ensure that it was not abused by the millers.

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