Gov’t advances $2.1B to pay rice farmers

Government has released $2.1 billion to pay rice farmers who have oftentimes complained of being paid late by millers with rice production this year reaching a record 633,000 tonnes.

A statement from the Ministry of Agriculture said that at the beginning of the week, about $600 million was released by the government and it yesterday released $1.5 billion from the PetroCaribe account to assist in paying off rice farmers making the advanced payments so far for the second half of December, $2.1 billion.

Venezuela has been by far the major market for Guyana’s rice and paddy accounting for around 70 per cent of total exports in 2010. This year, however it is about 30 percent since new markets have been acquired.

According to the ministry, at the beginning of the week, farmers were owed about $3 billion and after payments of the latest advances, the amount owed to rice farmers will be less than $1 billion. “These are not loans, but payments made earlier so that millers pay off farmers,” the statement said.

The ministry disclosed that presently, the Guyana Rice Development Board (GRDB) and the Guyana Rice Producers Association (RPA) are working with farmers to ensure that millers complete all payments before the end of the year. “We urge the millers to work through their bankers to make all outstanding payments to farmers. While the Ministry acknowledges that a valiant effort was made by millers, we still believe that they must ensure 100% payment to farmers within the Rice Factory Act timeline,” the statement said.

According to the ministry, the accumulated sales of paddy by rice farmers to millers amounted to greater than $42 billion for the two crops in 2014. “At this time, millers would have paid off more than $39B, or greater than 93%. While this is commendable, the millers must make an even greater effort to meet their obligations to farmers. Increasingly, the GRDB is making more rigid requirements on millers and we are cautioning millers that we will ensure that they pay interest on their debt to farmers in 2015,” the ministry asserted.

It said that the industry has now closed off its harvesting, with a final production of 633,000 tons to date. “This is almost 100,000 tons greater than the 2013 production and more than 200,000 tons than the 2012 production. The yield this year was about 5.4 tons of paddy per (hectare) or about 35 bags per acre. Harvesting was from 93,000 (hectares). In terms of paddy, the country is close to achieving for the first time one million tons of paddy production. This was thought to be highly impossible for a country like Guyana,” the statement said.

The ministry revealed that exports to date stand at 490,000 tons with further shipments to be made in the next week before the end of the year. It expressed confidence that exports would reach a “historic milestone” of 500,000 tons for 2014. Guyana’s market for rice has expanded to several countries in Central America while export of rice to Haiti has restarted and Brazil and Colombia are also growing destinations for Guyana’s rice, the ministry said.

The statement noted that Guyana continues to engage several African countries which have expressed interest in Guyana’s rice.

Most of these countries are in West Africa and the 2014 Ebola crisis in West Africa delayed progress on realizing these new markets, it said. It added that several Middle Eastern countries have also approached Guyana and these possibilities have been discussed.

In the meanwhile, the 2015 contract with Venezuela is being settled, the statement said. “Export to Venezuela accounted for almost 70% of Guyana’s rice production in 2010. Today, the export to Venezuela is still one of our most important export destinations, but this destination only accounts for about 30% of Guyana’s rice production,” the statement said.

According to the ministry, Guyana’s rice industry is also poised for expansion into value-added products. “While bulk export of rice continues to be the main export from the rice industry, 2014 evidenced the largest amount of packaged rice sold. Packaged rice export amounted to about 50,000 tons in 2014. In collaboration with the Ministry of Tourism and Commerce and IAST, rapid advances have been made in acquiring a rice cereal factory and we expect this to produce commercial quantity of rice cereal in 2015,” the ministry said.

“At the same time, we expect the first major bio-energy plant replacing about 70% of fossil fuel utilization in the operation of a rice factory in Essequibo to be in place by the first quarter of 2015. The GRDB and the Ministry of Agriculture in collaboration with the TERI Group is working to ensure at least three such bio-fuel substitution occur in 2015. The TERI Group is also working with us to establish a paddy husk pellet project to utilize paddy husk for generating energy off-site,” it added.

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