Dear Editor,

This is a deal using rice to pay off a US$160 million debt to Venezuela. There is no money being transferred to Guyana here. That US$38 million being crowed about is all on paper. Guyana now owes US$122 million to Venezuela. The question is where is the money coming from to pay Guyanese rice farmers/ millers if it is not coming from Venezuela? It is coming from the taxpayers’ pockets or from external loans borrowed by the government. Either way every Guyanese must pay for this windfall or repay any debt incurred to make this US$38 million payment to farmers/ millers. But there is a bigger problem. The government (not the Venezuelans) is paying farmers/millers US$420 per tonne of paddy and US$700 per tonne of white rice above the market prices of US$330 and US$560 respectively. This is US$90 per tonne and US$140 per tonne respectively for paddy and white rice over and above market prices. Whose money is going towards this payment to millers/farmers or who will be responsible for any debt? Every single Guyanese. For this government seems to forget that every Guyanese pays taxes and pays off those external loans borrowed by government. Not just rice farmers and millers. In a nation where bauxite workers are locked in a titanic struggle for better pay and benefits the government uses taxpayers’ money including the taxes paid by bauxite workers to make these payments to farmers/millers. So what happens with the mining, logging, manufacturing, sugar and other industries?

As critical as the rice industry is to Guyana, this is not sensible economics. It is unfair to transfer state resources to a special interest group. Instead of taking US$38 million from the state coffers to pay this group unfairly the government should have paid market prices for the rice and applied the rest of the funds towards the development of the nation and the development of all Guyanese. Or it could have used this money to foundationally help the rice industry in fundamental areas such as drainage, irrigation, transportation, logistics, etc. Little of it will ever make its way into the pockets of the poor people the farmers/millers hire to work for them. Is the government also paying for shipping and logistics of this rice too?

Whatever happened to farmers engaging efficiency, proper management, waste elimination and planning to achieve profits based on market prices? When incentives are provided by poor nations with extremely scarce resources to select industries to the detriment of others it creates a situation of unfairness and the abuse of state resources. This is moreso evident when other industries are begging but have not benefited from these payouts. Furthermore, the payments here are not going to improve the lot of ordinary workers. It will improve the lot of the capitalists who if trends are anything to go by will not invest the bulk of it in capital development and expansion. This is a reflection of a national disease. When a small Guyanese contractor struggling to build his business has to compete with a foreigner he can only pack up his belongings and point his compass northwards.

In five years of the PetroCaribe Agreement we owe at least US$122 million to Venezuela. That is about US$25 million per year. At this rate, we will be indebted to Venezuela to the tune of US$372 million if the PPP gets its wish to have 28 years in power to fix the PNC’s 28-year mess. Imagine owing more than US$372 in the next decade to a nation that routinely puts Essequibo on its map as part of its territory. What happens if we find oil and the Venezuelans demand a share of our oil spoils or we face immediate repayment of all of its debts thereby sinking our nation into further economic collapse? What if Venezuela demands payment or we risk military action? In this nation where agricultural output has improved but not at the runaway level promised by the PPP when they assumed power, we have an arrangement where we must produce food at massively fluctuating prices to pay for fuel which has been fairly fixed since its last speculative climb. Yes, we must produce agricultural products that are dependent on many factors for success to trade for what is largely a fixed product to Venezuela. We are importing fuel every day while the Venezuelans will import our agricultural products when they see the need. In this nation where a hydroelectric project that is already overpriced and cost-defective and is supposed to bring cheap power is not even started. Where GPL has been leaking and is broken and is not yet fixed but we want to send a major new source of power through its system. The PPP needs to be reminded that every Guyanese pays taxes in this nation.

Yours faithfully,
Michael Maxwell