The Mahaicony Rice Limited (MRL), which up to last July owed farmers about $2B, is once again causing unease in the industry by delaying payments of approximately $290M, most of which is owed to farmers in Regions Five and Six.
In a press release issued yesterday, the Government Information Agency (GINA) said that Minister of Agriculture Robert Persaud, General Secretary of the Guyana Rice Producers’ Association (GRPA) Dharamkumar Seeraj and Chief Executive Officer of MRL Jai Beni met to discuss the long standing issue. A representative from the Guyana Rice Development Board (GRDB) and one from Demerara Bank Limited were also present at the meeting.
According to GINA, “Persaud pointed out that all stakeholders, including the GRDB and the sector Ministry, have shared unease regarding the non-responsiveness of the MRL to the concerns resulting from its treatment” of farmers. Beni, GINA said, has since assured that “he was looking into the matter seriously and making necessary institutional and management changes to ensure the company is more responsive to its obligations to farmers”.
Persaud informed that MRL through its General Manager Taramati Ghani “pledged to settle all outstanding payments to farmers for the first crop before harvesting of the second crop for this year”. The GRPA and the GRDB are to monitor this.
The Agriculture Minister also said the possibility of farmers receiving fertilizers from MRL in place of cash payments is being examined. Such a move, Persaud explained, will have to be considered carefully since some farmers have highlighted that MRL has been selling fertilizers at a higher price than obtains on the local markets. MRL’s delay in payments is having a marked effect on the ability of Regions Five and Six farmers to invest in the second crop this year.
Persaud, when questioned about what recourse the ministry will take if MRL should renege on its commitment, explained that the GRDB has the power to take certain measures as a last resort. Farmers, he said, can take private actions sanctioned by the 4GRDB. He further explained that an earlier amendment to the Rice Factories Act had stipulated that it was incumbent upon every rice mill to pay 95 percent of the total transaction to a rice producing group. Owing to some discrepancies in the act, Persaud continued to explain, a new draft regulation to be tabled in parliament will amend the Act to ensure that every farmer, instead of the entire group, will be paid that percentage of total transaction.
Beni, the company’s CEO, had previously promised that outstanding payments for last year would be “made immediately” and that payments for the first crop of this year would be handled with “the greatest urgency”.
The GRPA General Secretary, speaking to this newspaper last evening, said MRL still has $290M outstanding to rice farmers. Seeraj further indicated that the company has paid $400M thus far to rice farmers owed for the first crop this year.
This delay, GINA said, will “impede significantly on their [farmers] investment in the second crop” this year and was the major reason for prompting the meeting at the Agriculture Ministry yesterday. “It is hoped”, GINA reported, “that the company would iron out the payments issue expeditiously, and work to ensure there is no recurrence of such problem, because all stakeholders and the rice industry as a whole are affected, stymieing growth and development in the sector”.
Seeraj, according to GINA, stated that MRL “is the largest and consequently, most indispensible operator in the sector – a reality which may have contributed to its unfavourable posture in recent years”. Seeraj, GINA said, expressed optimism that MRL will “clean up its act”.
