– Persaud
Funds from the PetroCaribe account are used to pay local farmers and millers who supply rice and paddy to Venezuela under the US-multimillion dollar deal, Minister of Agriculture Robert Persaud says.
He noted that Guyana obtains oil from Venezuela via the PetroCaribe arrangement—a deal signed by several CARICOM countries in June 2005—and it is then sold to the public. Proceeds from the oil sales, Persaud said, are held in what is known as the PetroCaribe account, which is used to make payments to Venezuela based on the oil-supply agreement. “It therefore means that instead of repaying Venezuela directly for their oil through the PetroCaribe account we are instead using this money to pay rice farmers/millers and then discounting this value from the value owed to Venezuela for oil,” a statement issued yesterday by the Ministry of Agriculture quoted Persaud as saying. The state is the major purchaser of the oil from Venezuela.
Last Thursday, during a press conference at his ministry, Persaud announced that a second rice deal worth US$38 million was finalized with Venezuela.
Persaud’s comments came in response to a letter, ‘The rice deal with Venezuela does not involve a money transfer; the Guyanese taxpayer will be paying rice farmers,” by Michael Maxwell, published in yesterday’s edition of this newspaper. Among the points raised in the letter were that the deal uses rice to pay off a US$160 million debt to Venezuela; there is no money being transferred to Guyana here and the “US$38 million being crowed about is all on paper. Guyana now owes US$122 million to Venezuela.”
“…It is rather sad and sickening,” Persaud said, “for any patriotic and honest individual to criticize any effort to aid the rice industry which supports all walks of life.” The Guyana/Venezuela deal, according to him, highlights the government’s commitment to take advantage of every opportunity to improve the lives of all Guyanese. Access to the Venezuelan market, he further explained, resulted from a meeting with his President Bharrat Jagdeo and his Venezuelan counterpart Hugo Chavez last year in New York. “As agreed, Guyana will supply paddy and rice, while payments will be done from payments for oil supplied under the PetroCaribe deal.
Subsequent arrangements with the Ministry of Agriculture/ GRDB [Guyana Rice Development Board] and Corporacion De Abastecimiento Y Servicios Agricolas (LA CASA) finalized this deal,” he said.
Since it is up to the Government of Guyana to provide the money to pay farmers/millers, the question of how this is affecting their cash flow arises.
When asked about this Persaud told Stabroek News that it is had no effect on the government’s cash flow since the money placed in the PetroCaribe account was not needed for anything other than oil payments. “In no other market, are our farmers, millers and exporters receiving this economical price. In addition to this market is another for the expanding rice producing sector of Guyana,” he added.
At the end of August, Guyana completed supplying US$18.8M in rice and paddy to Venezuela.
Supply under the second deal is expected to commence in October. The current contract offers US$420 per tonne of paddy and US$700 per tonne of white rice.
President Jagdeo, on July 23, said Guyana owes Venezuela more than US$160M for oil obtained under the PetroCaribe arrangement.
Under the PetroCaribe deal, Venezuela accepted deferred payment and allowed borrowers to pay for oil with goods such as sugar, rice, bananas or kidney beans.
