This column explores initiatives to improve the business climate of our nation and make Guyana Open for Business a reality. Peter R. Ramsaroop, MBA Chairman, RoopGroup
Overview
This is my last of a three column series on critical issues as it relates to our farmers and recommended major improvements in order for them to be able to strategically position themselves to improve their products, marketability and financial results.
Last Friday, I was invited to a major rice farmers meeting in West Demerara. Over one hundred and fifty estimated rice farmers came together to discuss what they were facing and to make a difference in their industry. They are asking for urgent help in lobbying the government for significant changes in order to sustain their operations.
Nearly half the planet’s 6.6 billion people depend on rice to survive but rising populations and economic growth mean that the world is already eating more of the grain than is harvested. Experts conclude that we have a crisis brewing in terms of rice supply.
Guyana has been known as a rice producing country for decades. One of the major experts in the industry , Mr. Doerga, CEO of Alesie Rice, presented a case to the farmers titled “Rice is Life” His presentation stirred the farmers, as he presented many facts and suggestions for them to improve their operations by reducing production cost and creating more efficient models of profitability.
Global Markets:
The market in the USA is surprising everyone. Prices continue to climb, driven by a futures market. Despite this, mills continue to be busy with shipments of milled rice and paddy running well ahead of the same period last year. The question on everyone’s lips is how far can the market go? Locally, we continue to see our production dropping to an all time low.
The next Vietnamese crop for example, to be harvested in the next few weeks, was unlikely to bring down prices, said Alex Waugh of the industry-backed UK Rice Association. “It may provide some short-term relief and restraint on prices rising even further.”
Caricom Failures:
Caricom countries have failed to help each other in a competitive single market to develop food sustainability. Over the Caricom years, the rice production in Trinidad and Tobago and Jamaica has diminished, because political leaders in those countries choose to buy cheap subsidised rice and use it as a political tool. They were strengthened in this misbehaviour because other Caricom countries such as Guyana were mismanaged, sending a fantastic rice industry into disarray. The Guyana government is also disrupting the market locally by buying rice and selling it at a subsidized price to consumers.
Trinidad and Tobago and Jamaica failed to place a levy on imported rice to eliminate the subsidy they are giving to the farmers and to use the levy monies to enhance their own rice production.
Conclusion:
Mr. Doerga told the famers in his presentation that before crop starts they need to forecast what their cost will be and what they will most probably get for their paddy. Based on this information they will decide if it makes sense to plant or not to plant. He concluded that the paddy price should be the same as in Europe and the E.U. The millers have argued that if the government continues to compete with low prices in town where about half the population lives it will be difficult for the smaller millers who sell to the local market to survive.
The farmers agree that with a price of G$ 4,000: per bag of A-grade paddy, farmers can start to retool and work on a better future. Unfortunately, the Guyana Rice Development Board is not functioning in a manner to help the farmers. The recommendations are that:
The minimum export price should be US$ 525 per metric ton for a Jamaica quality rice equivalent.
Given the minimum export price the minimum paddy purchased price should be G$ 4,000: for an A-Grade equivalent.
Government must solve the drainage issues they continue to fail at. Rice in West Demerara will have to be brought out by boat thus increasing cost.
We all need to work together to increase rice production in a sustainable way that will ultimately benefit farmers and our population. Until next week: Roop.
