– threatens to close operations
General Manager of Mahai-cony Rice Limited (MRL) Taramatie Ghani, speaking for the first time about the millions the company owes farmers, has said that her company does not wish to enter into discussions with “anyone or the government” and will clear its debts and close operations if there is no other option.
The issue of paying farmers, Ghani said in recent correspondence with Stabroek News, could have been solved some time ago. However, she contended that the solution had been delayed because the Rice Producers Association (RPA) had chosen to deal with the matter “politically.”
For more than six months MRL has delayed more than $240 million in paddy payments to more than 200 farmers. In recent years the company has become infamous for late payments. Minister of Agriculture Robert Persaud recently announced that the company’s records were currently being audited and if it became necessary steps would be taken to seize assets to ensure that farmers were paid.
On September 15 – almost a week after Stabroek News first emailed Ghani – she wrote: “Commercial issues cannot be solved politically and making new laws should be first discussed with the industry… We had always paid the highest price for paddy and paid out our farmers before the new crop.” Ghani is yet to explain why MRL has been unable to pay farmers efficiently of late.
The new law to which Ghani refers in her response is the Rice Factories (Amend-ment) Bill, which was tabled in the National Assembly in July. The bill seeks to amend the Rice Factories Act of 1998 and is aimed at toughening measures to ensure early payments. It stipulates that mill-ers who have been delinquent in paying farmers for three consecutive years will be penalized and will be required to place a percentage of the total amount owed to farmers in a fund specially for paying farmers in the event that they fail to do so.
Ghani, despite being asked repeatedly, did not say whether MRL’s delay in payments was due to the company’s deteriorating financial status. Further, she did not respond when asked whether late payments to farmers represented the method MRL had chosen to voice its displeasure about amendments to the law.
Instead she wrote: “Our company has the largest investment in Guyana in the agriculture sector. We do not want to enter into any discussion with anyone or government. If no other option we still will pay all our farmers and will close the company. Hope you understand our position.”
Last February MRL had owed farmers in excess of $600 million for paddy supplied during the first crop of 2008. The Guyana Rice Development Board (GRDB) had worked with MRL for months to ensure that farmers were paid. Despite several warnings to the company by the Ministry of Agriculture, it continues to be delinquent with payments.
“I fail to see the nexus between what she [Ghani] is saying and the reality… There is no nexus between payments to farmers and amendments to the Rice Factories Act. The reality is that MRL took paddy from farmers and they are failing pay them,” General Secretary of the RPA Dharamkumar Seeraj said.
The RPA, Seeraj said in response to Ghani’s statements, was established to promote, protect and advance the interest of rice producers. When a company fails to honour payments more than six months after it would have received produce, Seeraj stated, it is not political; it is an economic issue.
There have been numerous sessions conducted to discuss the issue of paying farmers, he said, but MRL had not sent a senior representative to any of these meetings. Instead, MRL continued to send representatives who served in junior positions and were unable to give concrete answers or make decisions.
MRL, Seeraj further said, had been manipulating farmers and were investing money which should be used to make payments to finance other operations.
Seeraj admitted that MRL was one of the largest millers in the industry and if the company closed operations then it would have a significant impact on the industry. However, he said that MRL is not indispensible. While the company’s absence from the industry would leave a gap in drying, milling and storage capacity, it was a gap which could be filled.
Local millers, Seeraj said, were more efficient with their payments. Delinquency he stated had come from foreign companies like MRL and the Alesie Group of Companies. The bottom line, he stressed, was that the RPA and farmers would not be brought to their knees by delinquent companies.
Meanwhile, Minister of Agriculture Robert Persaud has since forwarded a response from the GRDB to Ghani’s statement. The government, the GRDB stated, will not allow MRL or any company to take advantage of the farmers.
Ghani’s statements to this newspaper on how MRL was handling payments for farmers, GRDB said, “is showing the desperation of a company that is mismanaged.” The GRDB statement further said: “even the employees of MRL are forced to leave the job because of financial difficulties of the company. MRL is the only mill today that has significant balances for farmers.”
In fact, the GRDB pointed out that the Agriculture Minister delayed the second reading of the amendment to the Rice Factories Act to allow for further consultation with stakeholders.
“The inconsiderate behaviour of MRL,” the GRDB statement also said, “cannot be obscured by any claims of playing politics. Such accusation is a red herring.”