Payment continues to be a problem in the rice industry

Dear Editor,

Essequibo rice farmers staged yet another protest on the main public road, demanding payment for the last paddy crop which was sold to rice millers. The payment areas most affected are the Essequibo Islands, West Demerara and Regions 5 and 6. Harvesting of the present crop has commenced in Region Two, with some 31,500 acres expected to be harvested. There will be much difficulty in payment because of deliberate neglect by millers.

Under the current system millers procure paddy from farmers below the minimum support price. This system is leading to increased stocks in the warehouses of the millers. The government needs to intervene from time to time and ensure that farmers are paid on time. Government could also introduce online payments to make the transactions more transparent, as farmers have to wait four months to get their dues. The payments for the paddy are directly deposited in the farmers’ accounts.

In some instances farmers are selling their paddy to rice millers at a lower price to avoid the long wait. Paddy payment for farmers in Guyana has witnessed a steady decline since the ’90s. The sharp fall is due to problems with the local and international marketing of our rice, as well as the quality of rice produced by some millers, and it has serious implications for Guyana’s economic development. Over the past 5 years, however, there have been no signs of a revival in terms of prompt payment and rice quality.

Today rice occupies the first position among Guyana’s agricultural crops with respect to foreign exchange. First, labour costs are relatively high, and at the same time the expenses involved in purchasing agricultural inputs are a heavy burden without payments being made on time. Typically, farmers hire machinery from private sources, since not all of them own combine harvesters and tractors with a harrow plough. Given the high costs of cultivation and reaping and the modest yield levels, the price of paddy becomes an important determinant of profitability.

The minimum price for a bag of paddy was $1,500 last crop, and the maximum was $3,000 – a drop of $1,000 on each grade. However, even $4,000 a bag is not remunerative enough for a farmer who is primarily dependent on rice farming. Given government’s absence from effective participation in the rice industry, rice farmers are left at the mercy of private dealers, mainly a group of modern rice millers.

Yours faithfully,
Mohamed Khan

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