No middleman profiting from Venezuela rice deal – Seeraj

President of the Rice Producers Association and PPP/C Member of Parliament, Dharamkumar Seeraj says there is no middleman profiting from the rice deal with Venezuela.

In an invited comment he was responding to a recent report in the Kaieteur News that stated that there was heavy profiting off the trade.

Seeraj told Stabroek News that he was unsure of where the middleman notion came from. He said that the Guyana Rice Development Board (GRDB) would organize the transactions for the shipment of rice and paddy to Venezuela but that the PetroCaribe barter agreement itself had stipulations. He said that the company known as Rice Lab is contracted out to verify the quality of the rice being shipped because GRDB, the agency normally responsible for the task could not due to a conflict of interest.

Stabroek News understands that Rice Lab is subcontracted by Cubacontrol which is one of the agencies stipulated as being certified to import rice into Venezuela from Guyana. Stabroek News was told that the Rice Lab fee per tonne of rice was not under the control of the GRDB.

The breakdown of various fees associated with shipping rice to Venezuela under the Rice Agreement are fixed by the GRDB, the wharves and by clauses in the PetroCaribe agreement itself.

Stabroek News understands that the GRDB is responsible for pronouncing on its commissions, but little else. This publication was told that the GRDB collects US$2 per tonne of rice shipped for demurrage, the time a ship is spent docked loading and unloading beyond the time allowed. In the past, this has cost enormous amounts of money that would eventually percolate down to farmers to cover.

Stabroek News was told that this US$2 commission is being utilised to send a representative from the GRDB with the paperwork to ensure that demurrage charges are kept as low as possible. Guyana fixes freight charges to ensure that there is an additional three days after the specified docking time while Venezuela allows up to six days.

Stabroek News understands that to date the GRDB is still paying demurrage charges owed to the Ministry of Finance. This publication was told that freight charges are bid on by various compatible shippers working out of Guyana. The Venezuelan Rice Agreement stipulates what kinds of ship are to be used to transport paddy and white rice, which does reduce the number of potential shippers. A total of three shipping companies can be used to ship white rice to Venezuela.

A letter appearing in the Kaieteur News on April 27 reported on the various commissions paid. While some of the quotes were accurate, Stabroek News was shown documentation to contradict the other figures quoted. This publication was shown that the current contract for freight was US$56 per tonne of rice and paddy being shipped and not the US$58-65 stated in the letter.

This newspaper was also made to understand that correspondence between the GRDB and the John Fernandes Ltd and Muneshwers Ltd wharves have made it clear that the wharfage remains at US$10 per tonne and has not increased to US$12 per tonne as was suggested. Stabroek News was told that the wharves had written to the GRDB explaining that due to increased carrying costs the wharfage needed to be increased by 20 percent. However the GRDB responded that contracts were already signed with the US$10 per tonne wharfage charge and that the new charge could not be applied fort the 2014 export agreement.

This newspaper was also told that it is the Venezuela Agreement that mandates that US$9 per tonne be assigned to a social fund. Stabroek News understands that in years past this allocation was used to pay farmers after farmers complained that Mahaicony Rice Limited was not paying. The allocation this year is expected to assist with the paddy bug programme which is estimated to cost over $100 million as well as the rice facility at No 56 Village which is in need of additional funding of $70 million.

The first shipment of rice to Venezuela for the year left Guyana on Sunday. The Rice Agreement for 2014 has changed in that it will be 150,000 tonnes of paddy and 50,000 tonnes of white rice being exported, for a total of 200,000 tonnes. Last year’s agreement provided for 210,000 tonnes – 140,000 tonnes of paddy and 70,000 tonnes of white rice.

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