The rice farmers are producing at uncompetitively high prices

Dear Editor,

In the Kaieteur News of August 5 there is an article captioned ‘Agriculture Ministry eying higher price markets for rice as production keeps climbing.’

This looks innocent enough, but is it an attempt to deceive the rice farmers that there can be a solution for them to keep producing at uncompetitively high prices? The PPP just don’t seem to care; it’s very strange, they are not competent enough to get good national production results especially in agriculture, so they deceive farmers that all is well in order to keep them producing and let the cards fall where they may. The Skeldon sugar cane farmers are a good example; mostly they are all bankrupt, and now Uitvlugt is giving land for farmers to cultivate cane when GuySuCo cannot do it themselves due to numerous constraints. The PPP continues to deceive their own supporters into taking risks simply to show more production, and if the farmers go bankrupt it’s OK. I just don’t understand it, while the farmers keep falling for theses shenanigans over and over again.

Agriculture Minister Ramsammy misleads us by telling us of the huge challenges the PPP has had to overcome to achieve the overwhelming success of the rice industry, but the real situation may be completely different.

The PetroCaribe deal was initiated by Hugo Chávez to buy support from his Caribbean neighbours. To buy this support he began selling the 14 countries which signed the deal including Guyana, oil from Venezuela under preferential conditions, which would make them indebted to him and therefore support him in whatever he may decide to do there.

The Guyana Chronicle of August 7 tells us that Donald Ramotar as head of the Government of Guyana, officially commissioned the Hugo Chávez Centre for Rehabilitation and Reintegration, a facility for homeless persons in West Berbice which has received extensive funding from the Government of Venezuela through PetroCaribe.

Chávez nationalised many foreign and local assets, and had all but destroyed the economy of Venezuela before he died. He violated the human rights of countless numbers of his citizens and his plan worked, since we have said nothing critical about him; in fact we are now honouring him. Venezuela is an OPEC nation and they cannot sell the fuel at less than the internationally agreed prices of OPEC, so Chávez put in place a system where he can bribe his neighbours to support him, by giving them the oil at the OPEC prices but on generous payment terms. According to the Gleaner, in the case of Jamaica the government is allowed to convert 40 per cent of fuel payments annually to a loan repayable over 25 years at 1% interest. “The funds flowing from the arrangement are managed by the PetroCaribe Development Fund (PDF) which earns from loans packaged for the public sector and from investment returns” and the fund is huge, amounting to date to a loan portfolio of J$206 billion.

There is no such arrangement we know of in Guyana, but we know that the Government of Guyana (GOG) brings in the fuel/oil from Venezuela through the GEA and sells it to the local gas stations and GPL at full price, but since they are only required to pay 60%, if the GoG is taking advantage of this preferential arrangement and are only paying 60% of the total cost of the fuel whilst selling to the local gas stations at the full price, where does the 40% collected from the gas stations and private users go? Our annual fuel bill is US$350 million, 40% would represent US$140 million or $28 billion per year!

We know that there is an agreement this year to exchange rice and paddy for the fuel and oil payments, 150,000 tonnes of paddy and 50,000 tonnes of rice, but we don’t know anything about the actual arrangement; how much for example are we getting for this rice and how that compares with the world market price. We did see a protest by farmers that the cost of transporting their paddy and rice to Venezuela was exceptionally high, so they may be overcharged for shipping.

A glimpse of the explosion that is to come is already evident with the protests and picketing of the rice farmers in the Essequibo and other areas, and the Minister of Agriculture telling us in the KN that he is having difficulty finding markets for our paddy since the cost of production is high. He is even signalling that they must “remain viable and resilient despite the challenges,” but he has done nothing about implementing a market strategy with stable prices so that the local price for paddy remains stable throughout the year. Unless this happens soon, a lot of farmers and millers will continue to get hurt. This raises the question, shouldn’t the extra profits from the rice and paddy preferential price go towards making the rice industry more efficient rather than doing the easy and dangerous thing of paying an artificially high price for the Guyana production sold to Venezuela.

The government can embark on a process of precision land levelling, more efficient roadways to bring the paddy out of the cultivation which is the biggest problem farmers have today, better drainage and irrigation facilities, better agronomic practices to up Guyana’s rice yields which are low by international standards, etc. I have credible information from reliable sources that certain individuals are approaching the manufacturers of agro-chemicals abroad, and are asking that the chemicals be sold to them directly, presumably with the intention of on-selling it to the GRDB then to the farmers.

Furthermore I do not subscribe to the view that this PPP government has done very much for the rice farmers. The turnaround in rice was started by the Economic Recovery Programme (ERP) initiated by Desmond Hoyte, through a process of privatizing and liberalizing the industry,and especially through the privatization of the inefficient government mills. However, there has to be some long term plan to protect the expansion of our rice industry which is not competitive, by the Minister’s own admission, with the other world producers especially Asia at this time.

He is even suggesting that we mix the rice flour with the wheaten flour so that we can boost agro processing. Didn’t Burnham try that? A desperate Dr Ramsammy is even proposing that they produce power from paddy husks to power their milling operations and make briquettes of compressed paddy shells to help GuySuCo fire their boilers at the beginning of the grinding season. It’s very carefully put, but it means that he is admitting that we are right, that the GuySuCo estates are not grinding at a rate which can accumulate bagasse and are buying a lot of wallaba wood to supplement their power generation. This is how we will save the rice industry? These are pie in the sky, farcical and unworkable plans which will never materialise.

To sum up, our government may be on track to undermine the rice industry as they have done in the sugar industry; all of the warning signs are there, and it now turns out that we may be as uncompetitive in rice as we are in sugar. We see this gem in the KN, “the GRDB has developed 14 new varieties of rice which are cultivated by approximately 20 farmers”! We have thousands of farmers and only 20 have the new varieties; it will take 25 years for the rest to get them.

The Economic Services Committee of the Guyana Parliament is well advised to find out everything it can about the PetroCaribe deal before it is too late, and we have as big a disaster in rice as we now have in sugar.

Yours faithfully,

Tony Vieira

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