Dear Editor,
The agreement with Venezuela, which is Guyana’s main buyer of rice and paddy, will come to an end in November 2015. Farmers and millers will face a serious threat to their earning position as Suriname will be selling its rice and paddy on the Venezuelan market. The cancellation of the rice deal will have consequences for a rice-producing country like Guyana. It is not clear what is responsible for this, but it was reported that these two countries were engaged in talks.
Guyana was warned by some analysts ever since the inception of the agreement in 2005, not to place too much reliance on the oil for rice barter trade, because Venezuela would not be able to sustain the concessionary oil to countries of the region due to the falling price of oil on international markets .
The previous administration knew that the oil for rice and paddy PetroCaribe deal might collapse due to political upheaval and the declining economy of Venezuela, but never disclosed this to the rice farmers and millers. Venezuela has already signed a contract with Uruguay to supply rice for oil owed.
Guyana’s rice production last year reached around 633,000 tonnes and was very dependent on the Venezuelan market. It will now have to find new markets like Jamaica, Europe, Brazil, Panama, Guatemala and Nicaragua, etc, since the agreement will end in November 2015. Guyana producers will have to expect that new markets will inevitably threaten the comparatively high prices presently being enjoyed. Venezuela is a lucrative market for Guyanese rice, because the payments are higher than in the case of Caribbean and European countries.
The Guyana government should move to conduct bilateral trade negotiations with Brazil with a view to enhancing the trade in rice between the two neighbouring countries. Brazil can now be our base market in South America, to which we could supply 450,000 metric tonnes. This could be an important breakthrough for the rice industry as we seek to export rice to markets outside the traditional areas. Further, the Brazilian market could be outlined in our new strategic plan and this would be a good opportunity which couldn’t come at a better time.
I am sure that if Guyana meets the quality of rice and requirements of the Brazil market, the quotas will increase. We can also launch our product in their markets as these areas will be better positioned to teach us the business culture. Therefore, let’s not waste time with Venezuela, but rather work assiduously to make our mark in the Brazilian marketplace. A country which depends for oil on external sources partly paid for by the bartering of rice and paddy, will be in a vulnerable position. Moreover, a country like ours is susceptible to serious political pressures from Venezuela. Oil in the past has been used as a weapon in the ruthless power-play which characterizes the ‘game of nations.’
Yours faithfully,
Mohamed Khan
