Agitation continues to grow in the rice sector as farmers have started to reap with little hope that paddy prices will be high enough to offset their debts.
However, some millers and exporters say that developments in the international market gives hope that prices can increase in the not too distant future. Currently, farmers are receiving low prices for their paddy compared to previous years.
Head of the Rice Producers Association (RPA) Dharamkumar Seeraj told Stabroek News that based on feedback from regions 2 and 6, paddy is fetching between $1,500 and $2,200 per bag. The figures are significantly less than the $3,000 per bag price that Agriculture Minister Noel Holder had stated at the Rice Conference held in July that was aimed at addressing some of the frustrations within the industry.
Seeraj told Stabroek News that the recent protests by farmers outside the ministry last week as well as the various small pickets by farmers outside the regional offices of the Guyana Rice Development Board (GRDB) were out of sheer frustration.
He said he was told by small farmers that this would be their last crop as bankruptcy was looming and they simply could not continue.
Seeraj stated that farmers constantly asked about the $23 billion that was promised by the government in this year’s budget but there has been little engagement between the government and the associations that are directly linked with the rice industry.
In his budget presentation, Finance Minister Winston Jordan had announced that over $23 billion had been allocated to support further payments to over 7,000 rice farmers in the light of the inability of the PetroCaribe Fund to meet the payments
Seeraj said just under 232,000 acres were cultivated for the second crop and already lines of trucks are waiting at mills in Berbice. He said the harvest has just commenced and farmers are already being told that they have to wait because of the amount of rice still in the system.
He said the communication from the GRDB to farmers has been significantly slothful.
Stabroek News attempted to speak with the General Secretary of the GRDB Nizam Hassan on the current production levels on Monday, when over $8 million in rice was being loaded at the wharf bound for Dominica. He told this publication that he would not speak on any issue other than the rice heading to Dominica. Multiple attempts were made on Tuesday to speak with him but they were unsuccessful.
‘Hope’
As Guyana heads toward another record breaking rice production year, the industry is scrambling to find markets and to alleviate the financial burden placed on farmers. Last year, Guyana produced some 635,000 tonnes of rice and in 2013 over 535,000 tonnes. The first crop for 2015 produced roughly 360,000 tonnes of rice. “There are new markets, but not with better prices. Panama and Jamaica prices are coming down,” Seeraj stated.
Guyana has been selling rice to Jamaica at roughly US$370 per tonne and to Panama for US$400 per tonne, which is down from the US$450 and US$500 per tonne averages, respectively, in the past.
The loss of the Venezuelan market was expected to hit farmers but they were not anticipating such a steep decline with no buffer so quickly.
A farmer told Stabroek News he was angry that the government held a rice conference without addressing the immediate need to find markets. He said the “talk shop conference” did little to tackle what was looming in a matter of weeks.
Another farmer told Stabroek News that farmers were living off of “hope” and he called for a more vigorous RPA and Millers Association that would include farmers in the discussions and the plans. “Is all of we and we in this together. Venezuela gone, we know prices not going to be good, but the government saying they have money. Dem [former PPP administration] used to say the same thing and who end up punishing? Still farmers,” he added.
In a statement issued yesterday, the Guyana Rice Exporters and Millers Association (GREMA) said that members met to discuss the depressed world market prices. It advised that members should attempt to negotiate the best price possible so that the benefits of these prices can be passed on to farmers.
The association said that in spite of the low prices, some developments in the international market give hope that prices can increase soon. It cited El Nino, the drought affecting Asia and parts of South and Central America and the fact that the US is on the verge of being able to export over one million metric tonnes of rice per year to China. The association also pointed out that Thailand may impose a ban on the planting of 2.4 million hectares of rice due to a shortage of water. According to the statement, the members present at the meeting agreed that since the cost of production varies from mill to mill, a single price cannot be set for paddy and advised that farmers and millers should negotiate a fair price between themselves.
Earlier, Dr Peter de Groot, head of GREMA, told Stabroek News that it was not possible for there to be an industry-wide price for paddy. “We are not setting a price for [paddy], millers have different cost of production,” he said.
He brushed aside the idea of price setting and government committing to paddy prices. “It can’t be done, this notion of setting price for paddy. It is a free market,” he added.
de Groot also called the perpetuated price of $3,000 per bag “unrealistic,” given the world market.
Meanwhile, the opposition People’s Progressive Party (PPP), in a statement, said the government needs to make the $23 billion promised to the industry available immediately.
The opposition said the void created by Venezuela’s decision to halt the purchase of rice under the former agreement meant that the industry would need the $23 billion to “fill the void.”
The party called on the government to fulfil its campaign promise of better paddy prices and other support for the industry, while taking aim at the administration by stating that “the Granger Administration clearly hoodwinked rice farmers, like many other sectors, into believing that their promises were genuine.”
According to the PPP, farmers were being offered “a paltry $1,900 per bag of paddy.”
