Accusing millers of exploiting the decrease in global rice prices while farmers continue to suffer huge losses, Agriculture Minister Robert Persaud yesterday said a 60% cut of the export commission could be withdrawn.
Persaud yesterday urged millers to offer more for paddy, instead of using the current decrease in price on the global market to generate more profit. Mixed reactions to the various supportive actions taken by the ministry reflect the reluctance of millers to acknowledge the difficulties being faced by farmers.
These include the cut of the export commission that exporters were required to pay to the Guyana Rice Development Board (GRDB), which was effected in a bid to allow millers to pay farmers better prices.
On March 5, Persaud had said that the commission would be lowered from US$10 per tonne to US$4, which is below the previous minimum mark of US$6. The minister had explained that this commission is paid into the Rice Development Fund of the GRDB. The cut was expected to see approximately $240 million being at the disposal of the millers, which the ministry hoped would have been used to offer farmers a competitive price for paddy. During the rice boom last year, the export commission had been raised.
However, at a meeting the minister held yesterday with GRDB representatives, General Secretary of the Guyana Rice Producers Asso-ciation (GRPA) and millers it was revealed that several weeks after the cut in the export commission farmers have seen no benefits.
General Secretary of the GRPA Dharamkumar Seeraj said the decrease in the export commission had not done much to provide better paddy prices for farmers. While prices have slightly increased in some areas, according to Seeraj, the cut in the export commission has generally had very little impact.
Seeraj suggested that the levy be reinstituted and the 60 percent used instead to develop infrastructure which will improve market access and other such issues.
If farmers are not going to benefit from the levy reduction, Persaud said addressing the point, it would be reinstituted.
Millers and exporters have contended that they have had to grapple with the falling price of rice on the international market. Regardless of what prices farmers are offered they will not accept it, rice miller Peter De Groot said at yesterday’s meeting. De Groot opined that no miller “in his right senses” will pay a price lower than he can afford to pay because without farmers there would be no millers. He cited the unpredictability of global prices as the chief reason millers were unable to quote a fixed price. If millers paid high prices for paddy without a guarantee and there is a sudden decline in global prices then bankruptcy would become a frightening reality for many. De Groot said millers are not out to take advantage of farmers’ situation.
The minister had blamed the global increase in rice production for the decrease in prices. In some instances, Persaud had said, there was a 20 to 30 per cent drop in prices which may reach below those of last year. However, he did not anticipate international prices falling below the 2007 figures.
There have been continuous meetings between groups in rice industry in an effort to solve the current problem. While yesterday’s meeting concluded without a price being quoted for paddy, Persaud has promised that they will continue to seek ways to improve the situation.
Speaking to Stabroek News recently, rice miller and farmer Beni Sankar had indicated that the cut in the export commission would not enable millers to pay growers more for their paddy.
Meanwhile, Seeraj claimed that some millers were being pressured by others to lower their prices. He called on the ministry to investigate this, further stating that the GRPA has never indicated that millers are out to gain from the difficulties being faced by farmers.
Millers with parboiling facilities and contracts should offer the best prices, Seeraj said. Farmers, he stressed, will not be satisfied until they get approximately $4,000 per bag of paddy.
