As frustrations continue to rise in the rice industry over money owed to rice farmers, Minister of Finance Winston Jordan has reiterated that millers have been paid for rice shipped to Venezuela.
According to a Government Informa-tion Agency (GINA) release, the minister made it clear that the new administration was aware of the plight of some 7,000 farmers after it was discovered that the PetroCaribe Fund was left depleted by the previous administration.
As result the Guyana Rice Development Board was immediately given monies to pay millers for rice which had already been shipped to Venezuela.
The minister noted that the current challenge facing the industry is that Venezuela has halted all rice shipments since August which makes it difficult for farmers to meet their contractual obligations under the current PetroCaribe agreement, scheduled to end in November of this year.
The government had agreed to utilise the Consolidated Fund to meet future payments to the farmers for rice shipped to Venezuela under the existing barter arrangement
Jordan clarified that it was in that context that the sum of $ 23 billion was set aside under ‘Statutory Expenditure’ in the budget, to allow farmers to be paid promptly while, at the same time, allowing for the writing down of the outstanding oil debt to Venezuela.
Under the original PetroCaribe deal, Guyana made initial payment equal to a percentage of the cost of the fuel acquired from Venezuela, while the balance was placed in the PetroCaribe Fund at the Bank of Guyana. This fund was treated as a loan repayable over 23 years, with a two-year grace period and 2% interest.
According to GINA, the minister explained that the higher the price per barrel of oil acquired from Venezuela, the lower the initial payment and the higher the amount deposited in the Fund.
“Each deposit into the Fund was treated as a loan to the country on the same concessionary terms. In effect, this resulted in Guyana being able to defer its payments, which were at very concessionary rates, over a longer period of time,” the release said.
The release further explained that a subsequent barter arrangement negotiated by the previous administration, saw the PetroCaribe Fund at the Bank of Guyana being utilised to facilitate payments to farmers, via millers. Under this new arrangement the rice shipments were used to write off Guyana’s debts to Venezuela.
A “virtual emptying” of the Petro-Caribe Fund resulted from the usage of the funds for payment to the farmers, in addition to expenditures for other purposes.
The new APNU+AFC government, on “recognising the gravity of the situation faced by the farmers, agreed to meet future payments to the farmers for rice shipped to Venezuela under the existing barter arrangement, which could not be met from the PetroCaribe Fund, to be paid from the Consolidated Fund,” the release said.
