-over $200M still owed
Payments are beginning to trickle in from the Mahaicony Rice Limited (MRL) but it still owes farmers more than $200M, General Manager of the Guyana Rice Development Board (GRDB) Jagnarine Singh says.
Last Friday MRL owed more than 100 farmers just over $300M for paddy. This number and amount, Singh told this newspaper during a telephone interview yesterday afternoon, has since been reduced. MRL officials have not been available to Stabroek News for comment on this matter.
At the end of last week, Singh explained, following complaints by farmers MRL had made several payments to those on the Essequibo Coast. However, many of the cheques, according to Singh, “were not honoured”.
“It was this morning (yesterday) I spoke with the General Manager of MRL Taramatti Ghani and she indicated to me that those farmers who did not have their cheques honoured last week will now be able to cash them,” Singh said.
Singh said that up to 4 pm yesterday he had gotten no complaints from farmers about the cheques so he assumed that they’d been able to cash them. By tomorrow, he expects MRL to complete payments to farmers in Black Bush Polder and Number 70 Village.
The GRDB General Manager said that MRL “continues to frustrate everyone”. During the last two weeks, Singh noted, he has spent more than 35% of his work time dealing with the current MRL issue.
“This is simply ridiculous,” he said. “Whenever we call MRL they keep giving us excuses and promising to pay the farmers…I will not believe that they will pay until every farmer has been paid.”
MRL, according to Singh, has also been reluctant to share information with the GRDB to date. The Rice Board, he said, still does not know exactly how much MRL has paid farmers and the remaining sum which is still owed.
Initially, Singh recalled, MRL had indicated that it would complete all payments by the 33rd week in this year. This current week, Singh pointed out, is already the 31st week in the year, which means that if the company were to keep its word then all farmers should be paid within the next two weeks.
Currently, the GRDB manager further explained, MRL commands more than 30% of any crop. The company owns four mills and two sale centres, Singh said, and farmers continue to take their paddy to these locations because MRL pays the highest price.
“But although they offer the highest price,” Singh stated, “they usually don’t begin making payments to farmers until the peak of the harvest…and you find that some farmers harvest fairly early so this increases the amount of time they must wait to get their money.”
Several efforts made again yesterday by Stabroek News to contact MRL General Manager Ghani continued to be futile.
Almost bankrupt
Many of the farmers owed by MRL, according to Singh, are almost bankrupt. They depend on payments for their paddy to keep their establishments and families going.
Just last week Mohamed Shariff, a farmer from Number Four Village, West Coast Berbice, told Stabroek News that MRL owes him about $108M. However, he’d explained that the company subsequently wrote to him but claimed that they owed him $10M less than that amount. He’d also been informed that he’d be paid $10M every week until the amount had been cleared.
Shariff, the GRDB manager reported yesterday, received no payment from MRL last week. Singh said he has been unable to ascertain just what the position is with Shariff’s payments. However, he noted that this particular farmer is feeling the full brunt of MRL’s delinquent payments since almost a third of MRL’s debt is payable to Shariff.
Despite the pressing circumstances which farmers are currently facing Singh believes that they are not doing all they can. Farmers, he said, need to be more proactive. The GRDB, Singh told Stabroek News, has been encouraging smaller farmers for quite a while now to consider the option of taking MRL to court.
“Farmers need to understand that they need to pressure the company just as much as they are being pressured by it,” Singh stated. “Taking legal action is definitely one way to show MRL that they mean business.”
However, several farmers speaking with this newspaper under the condition of anonymity said that they are not inclined to take the matter to court mainly because of the time that must be invested in the action.
“I know of similar matters that have been in court for almost two years and still the farmer can’t get his money and all the while he must invest time and money into the court case,” one farmer said. “It is just a waste of time.”
Rice Factories Act
Last month Agriculture Minister Robert Persaud 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.
This bill, Singh said, is greatly needed and will prevent companies like MRL from taking advantage of farmers. General Secretary of the Guyana Rice Producers’ Association Dharamkumar Seeraj, who spoke with this newspaper earlier, also expressed support for the bill.
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.
Despite these legislatives changes farmers continue to suffer from the effects of late payments.
