Rice exports facing supply crisis

-Gov’t input needed to bring more lands under cultivation, says Nand Persaud CEO

Production challenge: Rice being loaded at Nand Persaud’s Berbice complex for transport to Georgetown.

The Head of one of the country’s leading players on the international rice market has told Stabroek Business that the expansion of Guyana’s rice sales on the international  market could come under serious threat unless the industry undergoes urgent expansion of lands for rice cultivation and modernization of other critical operational aspects of the country’s industry. 

Chief Executive Officer of the Berbice-based Nand Persaud Group of Companies,      Rajendra Persaud said last weekend in an exclusive interview with this newspaper that what, in the wake of the termination of the PetroCaribe rice deal with neighbouring Venezuela had turned into a desperate search for new overseas markets had now moved to the other extreme of available markets but insufficient rice to meet those needs.

 His own company, he said, which, just last July sealed a rice export deal with Cuba had reached a point where the company had “stopped taking new orders and looking for new markets because we do not have the rice to sell.”

With Region Six, the traditional ’home’ of rice cultivation currently unable to deliver the volumes of rice needed to satisfy both local and overseas market requirements, the Nand Persaud Group had now been forced to look to Regions Two and Five to meet its paddy needs. 

Speaking from his company’s headquarters at No. 36 Village, Corentyne on Saturday, Persaud said that Cuba apart, the company’s rice marketing success elsewhere in the hemisphere, including Mexico and Panama, which he said could grow even further if the rice became available, had given rise to pressures to which it was seriously challenged to respond. Persaud told Stabroek Business that Cuba’s annual rice imports almost matches Guyana’s annual rice production level. According to the Berbice businessman Cuba purchased 15,000 tonnes under the 2017 deal and was aiming to significantly increase its purchases this year. In addition to the daunting prospect of having to meet an expanded Cuba market the company was still committed to meeting contractual obligations in the United States and the Caribbean. 

With access to lands suitable for rice cultivation now having become a major challenge to expanded cultivation, Persaud told Stabroek Business that he was aware of a proposal submitted to government by a group of Berbice rice farmers for the development of a stretch of all-weather road between #58 Village and the Canje Creek that will open up new rice lands for rice cultivation and cattle rearing. Here, government has a key decision to make as to whether the reported US$10 million price tag for the new road is worth the investment given the urgent need to lend a greater measure of reliability to rice supplies for both the local and overseas markets as well as to provide a boost to a Berbice economy that remains affected by the closure of sugar production operations.

Asked about the implications of a likely rice supply crisis for his company’s own current and longer-term plans as a player on the international rice market, Persaud said that his company continues to entertain plans to pursue the option of setting up a rice mill in Cuba.

Returning to the broader theme of local rice supply challenges, Persaud said that pressures associated with improving the efficiency of rice production in Guyana had now given even more urgent rise to the mechanization of cultivation. His concern, he said, was that the advent of an oil industry could create new on-shore employment options that could leave the rice sector critically short of manpower and seriously threaten the viability of the industry, as a whole.

Meanwhile, Persaud told Stabroek Business that rice farmers in the Black Bush area had already begun to recruit some displaced sugar workers from the Canje area and had deployed them in the spraying of the rice fields. He said that the move to recruit displaced sugar workers had arisen out of the drift away from rice by the labourer category of worker and the consequential bug infestation that had been afflicting some rice fields on account of spraying not occurring in a timely manner.

And with the country’s rice-growing challenge now seemingly under threat from the need to improve production-related efficiency by, among other things, infusing efficiency-related technology and infrastructure into the process, Persaud said that setting aside the need for reliable access roads, the all–round efficiency of the country’s rice production regime needed to be attended by the creation of a network of airstrips across the country to enable the more efficient use of crop dusters in the aerial spraying of rice fields. Additionally, the Berbice businessman sees the need for investment in a higher level of cost-saving equipment, including Grain Carts, a mode of transportation for paddy that eliminates the use of bags in which to move the crop from the fields to the mills. A single grain cart costs around $1.5 million but according to Persaud rice farming operations that have invested in them have already realized cost savings associated   with the elimination of the purchase of bags.

Meanwhile, mindful, Persaud says, of the importance of investing in staying abreast of the science of the rice industry, The Nand Persaud Group of Companies is in the process of investing $40 million in the creation of a soil testing laboratory on the University of Guyana’s Tain Campus. The Memorandum of Understanding for the establishment of the facility was signed in November 2017 and according to Persaud the soil-testing services which the laboratory will perform will be accessible to farmers from across the country. Persaud says that efficient soil testing was likely to reduce fertilizer costs and by extension, production costs as a whole. 

And with a current monthly electricity bill of around $41 million, Persaud told Stabroek Business that the Nand Persaud Group is considering a major investment in wind turbines. High electricity costs, he said, had become the bane of the manufacturing sector’s existence.

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