Prices currently being paid by millers for paddy are likely to fall further before any possibility of stability due to internal and external shocks.
Berbice rice millers who held a virtual meeting with the Private Sector Com-mission (PSC) on Wednesday requested that the body seek an audience with government to find a reso-lution to the challenges faced.
“From tomorrow we might have to change to $60,000 (per tonne) and if these challenges are not addressed we will have to drop as low as $55,000 per tonne of paddy… we are buying paddy today at $65,000 which is not dried, which is not processed on the scale,” was the per-spective offered to Stabroek News by Rayaadul Hakh, who operates in Regions 5 & 6. Hakh declared that the increased cost of production was due to global issues. He point-ed out that apart from the freight cost and government commissions, millers have other production associated expenses.
“After the paddy cost, below that is electricity cost and with the current fuel price we are taking that hit in production and fuel and energy…from the planting to export we are experiencing labour shortage in skilled and unskilled,” he said as he painted a grim picture of the challenges they face. Added to their plight, Hakh said that while the construction sector received incentives to cushion rising transportation cost from the Berbice Bridge Company, rice millers continue to pay high sums per tonne to transport paddy.
“We are paying more for our trucks, at least 6000 more per truck, and these are three axel trucks which helps with the infrastructure because the weight is evenly distributed and it is better than the two axel trucks… but we are being penalised,” he lamented. Hakh stated that Brazil, which is producing rice at a fraction of the prices here, is slowly becoming a competitor in the European and Venezuelan markets, further posing a strain on the industry here. Brazil gained entry into the markets last year because of a shortfall, which again was a consequence of the flood experienced by the local sector.
The meeting, which arose out of concerns from farmers and millers on the state of the sector, was held a day after rice farmers in Black Bush Polder, Corentyne took to the streets to protest the reduced prices being paid by millers for paddy, which according to them, are likely to deepen their losses. Stabroek News learnt that several weeks ago rice farmers were told they would be paid $70,000 per metric ton of paddy. However, by Monday they were inform-ed that they would now be paid $65,000 per metric ton – a price which is expected to further decline later in the week. According to Hakh, if the government reduces or removes the container scanning cost and commissions paid to the Guyana Rice Development Board (GRDB) they can work to pay the price farmers are asking for.
Hakh stated that with growing uncertainty amidst the fuel crisis and associated costs, vessel operators are not committing to a stable shipping price for any product or containers used for shipping. He disclosed that the freight cost to the European market jumped from €5000 to €7000. The miller explained that the normal cost to ship a tonne of rice was US$30-$32, the cheapest route now costs over US$50.
“We would use vessels transporting cement. Those vessels would stop in Colombia before going to Venezuela, and that is normally the cheapest route, but the cost has increased there also. On the European route, last spring crop, we paid about US$40-US$50 but now it is close to US$95 and likely will move to US$115-US$125 per tonne in the coming weeks,” he related. Another miller, Feyaad, (only name given) pointed out that the ongoing challenges will not be helpful to sustain the prices for paddy for too long. He stated that the most they can do is “increase the price by $100 per bag of paddy.”
President of the Guyana Rice Millers and Exporters Development Association, Rajindra Persaud, also noted that the challenges are now forcing them to look at ways to sustain the industry. He stated that if the challenges are not addressed now they will have a detrimental impact on the industry. Chairman of the PSC Agriculture Sub-Committee, Lekha Rambrich, who is also a miller and rice farmer, renewed his call for initiatives to mechanise the industry. This, he said, will greatly reduce the cost of production for rice.
Rambrich suggested that an airstrip could help to reduce the spraying work-load [through spraying from air], which ultimately impacts the cost of production. In July, 2021, Stabroek News had report-ed that Corentyne farmers had signalled their support for the Nand Persaud and Company Limited airstrip which is located in Number 36 Village, Corentyne. However, on Monday Rambrich noted that the last they heard of the matter was that the airstrip proposal was sent to cabi-net for approval after the consultation. He stressed that a labourer required to fertilise fields costs approximately $1500 an hour while a motor blower is paid $600 per hour. In a previous report he cautioned that rice farmers in Region Six will need to take a serious look at reducing their cost of production which is extremely high right now. One factor, land rental, needed to be curtailed as the rental costs are already high.
According to Rambrich, land rental, especially in Black Bush Polder, is extremely high. He urged farmers to think positively and give consideration to the fact that with ongoing tensions between Russia and Ukraine, the cost for fertilizer will more than likely increase further. Millers who met with Minister of Agriculture, Zulfikar Mustapha on Monday said there was no commitment or timeline to resolve the issues currently facing the industry.
At the end of the meeting, the PSC commit-ted to analysing the infor-mation received and to seek an audience with the government to find a resolution to move the industry forward.
