Cut in rice export tariff will not boost paddy prices – Sankar

Rice miller and farmer Beni Sankar says he doesn’t think that the recent slashing of the export commission will enable millers to pay growers more for their paddy.

The sharp drop in the price for rice overseas and the consequential lower price to farmers has prompted a flurry of charges here about who was to blame for this.

Speaking to Stabroek News recently, Sankar said prices have dropped on the world market and have continuously done so. This trend, Sankar said, has caused uncertainty among millers. Further, he explained that production costs have also increased for millers and farmers are not the only group feeling the pressure from the rise in fuel costs.

It is Sankar’s opinion that the global financial crisis has nothing to do with the price on the world market.  Production in the world, he said, has been steadily increasing and supply is exceeding demand.

Sankar added that the reduction of the export commission will not enable millers to pay more for paddy. According to him, farmers are currently being paid $2,500 to $3,000 for a bag of paddy. It is the best price millers can presently give, he stated.

Minister of Agriculture Robert Persaud on March 5th 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 millers 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.

Meanwhile, the Guyana Rice Producers Association (GRPA) and a group which says it is working as a pressure group within the GRPA have continued to trade charges on the situation.

The pressure group calling itself the GRPA Action Committee says that the current drop in paddy prices is not due to the “global crisis” but is the direct result of the “mismanagement of the agriculture sector”.

There has been some conflict as to the committee’s name. General Secretary of the GRPA, Dharamkumar Seeraj, at a press conference on March 4 had said that there is no such committee within the GRPA since, according to him, permission was never applied for nor granted to these farmers to form such a group.

Seeraj, in an invited comment told Stabroek News that anyone who believes the global financial crisis is not to be blamed for the decrease of the paddy price “doesn’t have an iota of knowledge” about the rice industry.

Rice prices on the world market have dropped drastically from last year to now, Seeraj stressed, and as a result millers are now forced to offer a lower price for paddy. The GRPA had urged farmers to consider the global crisis on pricing; this was reported in the March 5 edition of the Stabroek News. The article, `RPA blames global crisis for paddy prices’ in that edition had provided coverage on the GRPA’s March 4 news conference which responded to concerns raised by the Action Committee.

Minister of Agriculture, Persaud, at a Windsor Forest, West Demerara meeting with various rice bodies had promised farmers $800 million aid before the next crop. Slashing the export commission on rice was among the avenues taken by the Ministry to provide support for the industry.

Meanwhile, Rahman told this newspaper that farmers will need $5,000 to $6,000 per a bag if they are to make a profit or break even. Rice farming is a business, Rahman stated, and like any other should be able to generate a profit. He does not believe that the world market has suddenly been flooded with so much rice that it is affecting millers’ ability to pay.

The drop in paddy prices, according to the Action Committee spokesman, is affecting small scale rice farmers more. Small scale producers, he explained, can not afford to purchase their own machinery and are forced to rent from large scale farmers at exorbitant prices.
Further, Rahman said that farmers were lured into investing more with the promise of high returns. According to him, farmers had been told that the current world crisis would result in a food shortage and they were encouraged to produce more.

Producing more has only led farmers along the path of possible destruction and if paddy prices are not increased many farmers will be unable to cultivate the next crop. This, Rahman stressed, would result in a drastic decrease in production for the industry which would in turn cause the quantity available for export and local consumers to suffer.

Should farmers be unable to replant, Rahman said, many will be left unemployed. Such an outcome would plunge the rice industry into serious problems which will have social and economic backlashes for our country.

The GRPA has stated that Rahman is not a rice farmer or member of the organization and has questioned his knowledge on the industry. However, Rahman said he has been involved in rice farming since childhood, served the GRPA during the 1960s and has also been involved in the sugar industry.

“The agriculture sector has suffered greatly from mismanagement at various levels,” Rahman said. “Rice farmers are suffering for this mismanagement but we will not take it quietly.”

One of the major aims of the Action Committee is to “see the revival of the GRPA to make it function in the interest of rice farmers”, Rahman said. Farmers, according to him, are no longer confident that the GRPA can support them.

“The GRPA needs to be revived,” Rahman stated. “I don’t believe that the organization can function since some of the managing members are politically affiliated.”

GRPA’s General Secretary, Rahman stated, is a People’s Progressive Party Civic (PPP/C) Member of Parliament (MP). Rahman believes that because of his attachment to the present ruling party Seeraj should not hold a key position in the GRPA because of a possible conflict of interest.

In response, Seeraj told Stabroek News that being a MP has absolutely nothing to do with his position as GRPA General Secretary. His loyalty to the GRPA and the rice farmers, he stated, was unquestionable.

“My loyalty to the GRPA is unquestionable and my two decades of service to this organization attests to this fact,” Seeraj said.

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