Gov’t should set aside a revolving fund of $15B to lend millers at a rate of 2% to pay farmers promptly for their paddy

Dear Editor,

The issue of the late or delayed payment to farmers has its genesis in the earlier days of the rice industry. In those days the government of the day took care of the milling and marketing of rice. While the government took the paddy from the farmers they were responsible for the importation of fertilisers and pesticides and they had a subsidy on both inputs. As the milling sector changed hands from government to private enterprise through divestment, delayed payment became a tradition because it suited the millers.

We are aware that there is no heart in business, the objective is to maximize profits even if it means trampling the farmers underfoot. Ironically the government doesn’t seem to grasp this concept, and while farmers have been clamouring for prompt payment and a fair price for their paddy over the years, the government continues to insist that in a free market it has no say about price and payment. As a result agitation between the millers and the farmers became the norm.

The rules which allowed millers 120 days to pay farmers changed to what they are today, that is 50% in two weeks and full payment in 42 days after the sale of paddy, and a penalty of 2% interest above the present bank rate to millers who fail to pay in time. To date I have never heard of a farmer who receives interest from a miller despite being owed for over 100 days.

We view this as totally unacceptable on the part of the Guyana Rice Development Board (GRDB). The rice regulations have been broken on many occasions and we the farmers have been the real victims.

Why is it that corporate crime goes unpunished? We have been protesting since the bugs infested crops when the millers were paying as low as $500 per bag.

We had a meeting with the Agriculture Minister at the Anna Regina board room. The cameras of the NCN were focused on our representatives as they exposed the flaws in the system, ranging from grading to weight and the pricing of the paddy. Lo and behold! When it was shown on NCN all we saw was the minister speaking of sending a “technical team” to investigate. NCN had denied us the right to air our grievances to the entire nation.

Nothing came out of the investigation. Last crop when we protested for payment the Minister came and instead of meeting all the farmers in one location to discuss the issues affecting us,

he held three different meetings: one at the Anna Regina Town Hall where he told us that “as of today” he is instructing his people to set up a “body of 15 legitimate rice farmers” to work with him to solve the problems in the rice industry. Let it be known that from then to now the Minister’s people can’t find 15 legitimate rice farmers in Guyana.

On June 8 we held a protest march from the new market to the high bridge at Anna Regina; no one from the government came to listen to our concerns. We made a decision to invite the Minister of Agriculture and the President to lend an ear to our concerns. That done we returned to protest on Friday July 4, but no one came. One would have expected the Regional Chairman who is the de facto political leader and had been elected or selected by the PPP/C on account of that party having won the regional election in Region Two in 2011, to have some sense of obligation to his constituents and come out to listen to our concerns and relay same to the Minister of Agriculture and the President. Instead he came briefly to say that he was not invited. We are left to conclude that the Chairman only responds when he is invited. This is the calibre of officials we have to deal with since we started to agitate for better conditions in the rice industry.

When no one came to address our concerns on July 4, chaos ensued. The government was guilty of neglecting the cries of the farmers and they felt they had to do something to get its attention, hence the burning of tyres.

Sadly the Minister of Agriculture had the audacity to use the term “politically motivated” to describe their actions. The Minister is aware that the issue of delayed payment is not the only problem facing farmers. His talk of a “technical team” to investigate and 15 legitimate farmers to work with him to solve the problems in the industry is testimony to that fact. It is time the Minister woke up from his slumber and did what is correct. It is time to listen to the cries of farmers!

His failure to meet with us in a meaningful way serves only to heighten our suspicions of collusion in the industry. Our requests are plain and simple and will resonate with our fellow Guyanese of all walks of life. The GRDB exists because of the rice farmers in Guyana; as a result it is bizarre that we have no say in the decision-making process of the GRDB. We are convinced that the politicians and technocrats on the board of directors of the GRDB do not have our interests at heart.

From the inception of the PetroCaribe deal with Venezuela, cheap urea fertilizer was part of the deal. That did not materialize until the beginning of this year. Lo and behold! When the GRDB/RPA brought the fertilizer at $5000 per bag the business houses were selling it at $5300. It boggles the mind to imagine what profit they were making selling at $7000 per bag.

When we had lost our preferential market for rice to Europe via the OCT route, the Europeans had given the government a grant of ten million euros to offset the shock that would have resulted from the loss of that market. The GRDB/RPA without any consultation with farmers thought that the best thing to do was to give out a bonus of $5000 per acre to those who planted that crop. The result was chaos and confusion. Some people who never planted rice got monies while some legitimate farmers got nothing.

So toothless is the GRDB that the basic weight of a bag of paddy sold by farmers to millers was 140lbs; an additional 3lbs was added on to offset the weight of the jute bag that was to transport the paddy. Now we are harvesting in bulk and the GRDB simply lacks the will to retract the 3lbs arrangement, or else chooses to collude with the millers against the farmers to take 3lbs of the paddy per bag before they plant their crop.

We demand to have three farmers who are not millers on the board of directors of GRDB, so that we can have eyes and ears there and input into the decision-making of the industry. We believe that it is the role of a caring government to level the playing field in the industry by means of rules, regulations and investment, so that the forces of production can co-exist in harmony to produce wealth and prosperity for all the stakeholders.

We want the government to set aside a revolving fund of about $15 billion to lend to millers at a rate of 2% to pay farmers promptly for their paddy and change the rice regulations to facilitate same. Their mills or factories should be used as collateral to access this facility and after six years the interest rate should be increased to 6% so as to wean them off this fund. This fund would be a solid investment earning dividends for the state, and on the social side it will improve the life of thousands of rice farmers in Guyana. It would be quite unlike dumping $6 billion a year on GuySuCo.

We understand that such a fund would create a conflict of interest with the banking sector. In banking parlance ‘time is money.’ We borrow at 18% from the banking sector to produce the raw material (paddy) that the millers need to do business, and when the milers take 3 months to pay us after purchasing our paddy we have to pay for 3 months extra interest at 18%.

On Sunday July 13, 2014 the President and his ‘team’ visited the Essequibo Coast. The President spoke for a long time on the abortion of Amaila, the AML bill and that some time ago before 1992, rats were eating a child’s hand at the Georgetown Public Hospital. When it was time for him to respond to our concerns, all he basically said was that we should work together to move the industry forward and thanked us for coming out on a Sunday. This is the kind of scant attention farmers get for burning tyres on the road to indicate to him that they have concerns.

While I was there I did not hear of anything being handed out on the proverbial platter to rice farmers or anyone else there with a problem. The next time I hear of a presidential “outreach” in Essequibo, I shall impose a restraining order on myself not to come within one mile of the drama.

The Minister of Agriculture in his presentation to the gathering said that there had been talk of a revolving fund for the industry. This is the most confusing statement of the decade. He then went on to say that they have been lending millers money to pay farmers at their own (government) risk. I figure that he was trying to tell us we should be grateful for that!

The government is lending money to millers at its own risk because the revolving fund that the Minister speaks of is nonexistent or poorly orchestrated; sadly it only seems to revolve when farmers burn tyres on the road. The revolving fund that we speak of must be well organised.

Government’s continued refusal to see the merits of such a fund could only be based on the presumption that farmers would want to borrow from the fund and that would cripple the banks’ business with the industry. The fund should only be for millers to pay promptly for paddy and not for the enhancement of their factories.

The government’s continued refusal to implement a revolving fund will only be construed by farmers as an act of collusion. The welfare of farmers must supersede that of the banks.

The pricing of paddy has always been a controversial issue. We want the GRDB/RPA to sit down with us and work out the technicalities of each available market. Say for instance, the Haiti market takes up to 20% broken. We want to know how many bags of, C grade paddy, for example, will make a ton of rice of that quality. Factor in our cost of production, the miller’s cost of processing. The value of by-products such as bran and broken that the miller gets must also be considered. An amicable formula for pricing can be worked out after consideration of all the variables.

Despite our invitations through the media and petitions to the President, the Minister of Agriculture and GRDB/RPA to discuss the issues affecting rice farmers, none of them came to the meeting on Saturday, August 23, 2014. This shows how little regard they have for farmers who are the biggest stakeholders in the industry.

 Yours faithfully,

Rudolph Singh

 

 

 

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