Dear Editor,
When one reads the SN article captioned ‘Payments from MRL to rice farmers trickling in’ of August 5, one is driven to conclude that an absolute determination to prevent this ongoing abuse of the rice farmers is slothful at best at the highest political levels. Why did the Minister of Agriculture delay the second reading of the amendment to the Rice Factories Act?
Mahaicony Rice Ltd’s (MRL) financial irresponsibility has the potential to trigger a partial collapse of the rice industry and this is an issue that requires urgent national intervention. MRL and the state’s public uttering on this issue has now evolved into arrant nonsense since all the rice farmers want is what is rightly theirs, not special favours. But when there is corruption in thought and deed, it always comes across tediously dull and thick since the righteous mind struggles to understand the madness.
Year in, year out, rice farmers are owed hundreds of millions of dollars and yet this sluggishness in amending the legislation to effectively ring-fence this abuse is evident. MRL does not have a transport on the rice trade in Guyana, so why is the state acting as if this company does?
The political actors can publicly ‘cuss’ the company from now until the cows come home; that is irrelevant. What really matters is what concrete action they have taken to right the wrongs being perpetrated on the rice farmers over the years, especially by the MRLs of Guyana.
The facts are there to demonstrate that the GRDB has done all they could within the law to resolve this ongoing crisis for the farmers, but the solution is beyond their remit. The solution requires political and legislative intervention at a higher level. The state has a duty to change the law to ensure that this company deposits a greater share of the cash value of its last millings from the last crop with the GRDB. The GRDB must be legally empowered to distribute these monies to the suffering rice farmers in the event of delayed payments, once prescribed regulations are followed. How difficult is this to implement? This does not require a PhD in jurisprudence.
The rice farmers were owed $300 million at the last count by this company, and yet we have a state as a laissez-faire bystander in this process where the ‘haves’ continue to take advantage of the ‘have nots.’ To emphasise how this is totally against the economic interest of the rice farmers, I will use statistics from the Bank of Guyana June 2010 Statistical Abstract to illustrate my point.
In June 2009, the commercial banks extended loans and advances to the rice industry of $3,361 million. In June 2010, the banks extended $4,303 million to the rice industry, an increased debt position of some $942 million. But who really borrowed more in the rice industry over this review period? Rice millers borrowed $619 million less than they borrowed 12 months ago. Rice farmers, on the other hand, are borrowing $1,561 million more over the same period, which resulted in an overall net increase of $942 million for the industry. One can only observe from this information that on average the millers are directly using the rice farmers’ money to run down their debt and are paying less interest.
Who is paying for this benefit to the millers? Rice farmers!
The rice farmers had to tap the banks for $1,561 million more over the 12 month period by lodging all their tangible assets with the bank to fund the millers.
Is this the training Dr Jagan left for his successors who continue to mash his philosophy into the mud on a daily basis as they reap the sweat of the working and peasant class?
There we have it, it is out in the open, so what is the Jagdeo regime going to do now? Continue their legislative laziness or get down to action to ensure that the interests of Jagan’s people, the working class and the peasant class, are addressed in an environment of fairness and justice? The world knows where Jagan stood on this question, but there is great uncertainty if the rice farmers will reap justice from this regime as the next twelve months dwindle away and the term of office runs its course to the end.
There was some level of relief for the farmers when two of the better endowed farmers bit the bullet and sued this company for hundreds of millions owed. They at least hit the company where it hurts most, and hopefully they shall have some positive results, but what happens to the smaller farmers who may not have the financial wherewithal to conduct a judicial exercise to enforce their rights? I understand there is some legal support from GRDB to these farmers, so why is it not using it?
How can a young man who wants to venture into the rice farming business for the first time ever be motivated to step forward? He is the future, and if the incentives are not there to support him, then the future of this industry is bleak.
To support the small-scale rice farmers, I hereby offer the following solution that must be led by the state in a kind of public-private partnership (flavour of the day) to mitigate these risk exposures.
1. The government must set up a few rice co-operatives similar to a very successful model at Vergenoegen.
2. They can procure 4 smallish (5 tonne) rice mills in a phased manner and set them up with a geographic bias in the main rice-growing areas (Essequibo Coast, Upper Corentyne, MMA areas, West Coast, etc).
3. These mills should be owned by the government but leased to the co-operatives on a lease purchase agreement, whereby every year the co-operatives have to pay the state x thousand dollars until the investment capital is recovered.
4. The mills would then be bought for a negligible fee by the co-operatives from the government.
5. The co-operatives would secure these x thousand dollars by keeping 1 bag of paddy for every 50 bags of paddy milled per farmer/member.
6. In exchange for that 1 bag of paddy, the rice farmer would be given an additional share in the co-operatives, which would be certified with a share certificate.
7. These co-operatives would have annual audits and annual elections of their executives and would have to operate in accordance with the law or the state would move in to protect its investment, so those in charge of the co-operatives would have a responsibility to operate in the spirit of good corporate governance.
8. All members (regardless of acreage under their control) would be allowed to mill a fixed number of bags of paddy based on the capacity of the mill.
9. These farmers would be paid cash 7 days after the delivery of the paddy.
10. The milled rice would be sold to the NGMC which would pay for the rice immediately as a result of a government grant to the NGMC.
11. This seed capital which was provided for by the state would act as a revolving fund for the NGMC to continue funding the project throughout the life cycle.
12. The NGMC would sell the milled rice to the local market for immediate cash or to the government for immediate cash.
If one is to look at the cash-flow cycle, the farmer would have access to his cash 7 days after delivery to the mill. This is what a government should be doing for its people, helping out with public policy in service to the people, not talk and more talk.
This is the kind of tri-sectoral economy Dr Jagan advocated in 1992. However, it was convenient for the capitalists who are in charge now to throw out all his ideals. The people voted for the ruling political class on the principle that they would serve mainly the vested interest of the working and peasant class. The deception is alive and well as ingratitude and opportunism manifest themselves on a daily basis as the ruling class panders to their flavour of the day.
Time will reveal who are the political sponsors of MRL, and I trust the rice farmers will wake up to realize who are their friends and who is their ‘Brutus’ as they continue to suffer at the hands of delinquent members of the business class.
Yours faithfully,
Sasenarine Singh
