President Donald Ramotar yesterday said that negotiations are ongoing to conclude a rice agreement with Venezuela early next month.
The current stagnation in the rice industry because of the yet unsigned new PetroCaribe deal with Venezuela has seen farmers protesting recently over the low prices being paid by millers, and Ramotar told reporters that the situation has to do with the market in Venezuela.
He added that they are working hard on the situation and he hoped that it will be resolved soon.
Minister of Agriculture Dr Leslie Ramsammy had previously said that a new agreement would be sealed by the end of this week, when asked about the agreement to export Guyanese rice for Venezuelan oil imports. He also said the new pact would be for the “same volume, same price.”
Under the terms of the PetroCaribe Agreement, Guyana was to receive 5,200 barrels of oil on a daily basis while exporting 66 per cent of rice grown domestically.
Meanwhile, General Secretary of the Rice Producers Association (RPA) Dharamkumar Seeraj has highlighted the need for a reserve fund to pay farmers for their paddy and is adamant that other markets need to be secured.
But he told a press conference at Red House yesterday that though Guyana was currently in talks with Panama, Colombia and Haiti to solidify rice export agreements, the earliest any rice could be exported to any of these countries was during the second crop. He added that talks with Haiti were on the verge of being finalised. He said while Haiti’s potential to purchase rice was there, prices being offered were low.
Seeraj said too that while other countries in Caricom were being looked at, the security of payment was not guaranteed. He continued that Guyana was committed to the Venezuelan partnership because of the high prices offered.
Seeraj said that Venezuela offers US$800 per tonne of high grade white rice and Guyana was responsible for the delivery of the rice. He noted that cargo and freight charges could be lowered because Guyana was responsible for that end of the deal, so the arrangement was cost effective to Guyana. Seeraj said Venezuela offers US$520 per tonne of paddy, while Jamaica offered US$200 less on average.
He stated that “the end of next week, the first week of May the governments are signing the [PetroCaribe] agreement. All of the technical issues have been worked out since the beginning of the season, but no one could have predicted the death of Chavez.”
Seeraj said because Guyana holds out for higher prices, no contracts were signed at the beginning of the season with Europe which had made a US$605 per tonne offer. After the death of Hugo Chavez, European prices ripped significantly and because the original contracts were not signed Guyana would be losing out, he said. Seeraj was adamant that the annual agreement with Venezuela was the best agreement globally.
However, many farmers are pressing the RPA and the Guyana Rice Development Board to encourage more exports to different markets. Farmers have said that the uncertainty of the annual agreement places them in a precarious situation. Seeraj told Stabroek News that Guyana has put on the table a reworking of the annual agreement to be more of a 2-year or 5-year deal. “Every year that is on the table, every year we talk and see if it can be a longer agreement [in order to avoid having to deal with technical issues],” he said. This has not happened as yet and there are no indicators that it will.
He said that through the PetroCaribe Agreement, Guyana is required to export rice to Venezuela that contains five per cent or less breakage. For Jamaica, meanwhile, Guyana’s second largest single rice market export breakage is 20 per cent or less. Jamaica imports 50,000 tonnes of rice annually.
Seeraj said while the Caribbean Community can import rice from other parts of the world, to do so countries would have to pay the common external tariff. Seeraj said that having external trade partners was frustrating and at one point “we were basically telling Caricom member states that we need to have a monitoring mechanism in place… to prevent them for importing rice from extra regional sources without paying the external tariff.”
‘Temporary setback’
Seeraj said that the $500 million in the agriculture budget set aside to assist farmers would be needed now. “The cash flow is not there and the bottom line is we see it as serious issue but it’s not an issue that is basically saying death to the industry, it is an issue that can be classified—while it is serious in nature—as a temporary setback given the circumstances,” he said.
He said the $500 million was not a large sum of money considering the size of the industry and the number of farmers across Guyana.
“We’ve spoken to the minister of agriculture and we have said, listen we want this $500 million to be made available to millers that the RPA will identify so they can be in a better position to make more payments to the farmers themselves, while we start the process of exporting on an increasing basis.” Seeraj said another proposal was to have farmers set aside two dollars from every bag of paddy sold, so they could have a reserve fund that is entirely farmer run and generated. He said while this could prevent setbacks in the future, “in the good times the farmers are not prepared to do this.”
Meanwhile, Agriculture Minister Dr Leslie Ramsammy stated that he will meet millers and famers separately and together on Monday and Wednesday to hear the various concerns of all parties involved in the sector. Ramsammy stated that for weeks since the first crop harvest began he was meeting with farmers to speak on the successes of the sector, which have ultimately led to some other issues including low paddy prices and lack of storage facilities during the drying process.
