Agriculture Minister Robert Persaud last Thursday tabled in Parliament the Rice Factories (Amendment) Bill, which seeks to have some rice millers provide security deposits for the paddy that they purchase from farmers.
It is to be debated at today’s sitting of the National Assembly. According to the bill’s explanatory memorandum, it provides for the amendment of the Rice Factories Act of 1998, by inserting subsections (1A) to (IE) to section 4 of the Principal Act.
Subsection (1A) “seeks to make provision for submitting a statement of paddy and a security deposit for the payment of paddy sought to be purchased, along with an application for a licence as a manufacturer of rice to the General Manager of the Guyana Rice Development Board.”
Subsection (1B) provides for the security deposits to be used for “the compliance of conditions, the fulfillment of obligations or the failure by the manufacturer to pay the value of paddy to any producer after the expiry of sixty days from the date of supply of paddy.”
According to section (1C), the security deposit under subsection (1A) shall be 10% of the value of paddy purchases during the previous year.
This money should be placed in a non interest bearing account of the Board. An alternative to the 10% deposit is the provision of a bank guarantee for 25% of the value of paddy purchased in the previous year.
Amendment (1D) proposes that the Board may exempt a manufacturer from having to place a deposit, if this manufacturer has consistently in the preceding three years fulfilled the obligations.
And according to (IE), the Board may forfeit a security deposit or any part of it to secure any of the money specified in subsection (IB).
Last October, the National Assembly passed the Rice Factories (Amendment) Bill 2009, which the government said was aimed at ensuring that rice farmers were paid in a timely manner. One amendment in this bill, proposed that millers pay farmers 50 per cent of the value of the sale within two weeks of the purchase and the other half within 42 days.
The bill also stipulated that for a miller to be granted a licence this person must not owe any individual farmer more than five per cent of the value of the paddy supplied unless otherwise approved by the board.