Agriculture Minister Dr Leslie Ramsammy on Monday said that rice exports were a smidgeon away from the historic figure of 500,000 tonnes and he asserted that sales are so diversified that Guyana would be able to withstand any upheaval in the key Venezuelan market.
Ramsammy was responding to a statement by A Partnership for National Unity (APNU) on Sunday attacking the minister’s announcement that $2.1B had been advanced by the government to millers to ensure that rice farmers are paid on time. APNU had said this was an attempt to cover up the hardships that the farmers were facing and it also accused the government of enriching cronies while farmers got low prices for their paddy. Ramsammy did not respond directly to these accusations.
In his statement, Ramsammy said that APNU had erred in questioning paddy sales.
“They used the production figure of above 600,000 tons of rice to calculate paddy sales and come up with an average price per bag that is based on voodoo mathematics. The truth is that while the rice production was slightly more than 634,000 tons, paddy production was greater than 972,000 tons or more than 15M bags of paddy”, he said.
Ramsammy rebuffed the APNU claim that the PPP/C Government was preventing the private sector from engaging in the production of rice cereal, noting that the rice industry is totally private sector. The Minister said that part of the facilitation of the industry has been to promote value added.
“The private sector was and remains free to develop any aspect of the value-added rice products. We would welcome the private sector becoming engaged in rice cereal production or in any other value-added rice products. The production research was done at Government cost, as part of our facilitation. The Ministry of Agriculture, the Ministry of Tourism and Commerce and the IAST collaborated with technical support from Trent University in Canada to establish the production capacity for rice cereal.
“The private sector is welcome to invest in this new component of the rice industry. As a Government, we decided to fast-track the investment in the rice cereal production in Essequibo to add another market for the rice farmers of that Region. Once this factory is operational, with professional staff, we hope that the rice farmers can come together in a cooperative to own the new business”, the Minister stated.
APNU had also questioned Ramsammy on his reference to packaged rice. In reply, Ramsammy said that all the rice sold to Panama is in the form of packaged rice and a small amount of packaged rice has been sold to other countries in the Caribbean, Europe and North America.
“The fact that they dispute that packaged rice is produced in Guyana is indicative of how little they know of the industry. Several facilities around Guyana already produce packaged rice for the local market and for export”, Ramsammy lamented.
Ramsammy also disclosed that as part of government’s initiative to improve efficiency and yield and to reduce the cost of production overall in the industry, it had made available experts from the Indian institute TERI to work with millers to lower electricity cost.
“Through this facilitation, proposals for installing gasification technology in rice factories have been made. At least one miller has already invested in equipment and the gasification equipment will be installed in that rice factory in the first quarter of 2015. We have already identified that the miller is from the Essequibo Coast and that he has invested his own resources, outside of the technical support which is available to all millers.
“The selection of the first mill to benefit from the TERI facilitation was entirely up to the private sector. TERI was made available and is still available to all millers. The first installation is being done at a mill where the owner came forward first with his investment. The 2nd one is awaiting the next miller to express interest in investing in this cost-saving exercise. The GOG has no interest in deciding which would be the next mill. Our position is that all mills should invest in gasification technology for cleaner production of rice”, Ramsammy said.
In its press release on Sunday APNU had questioned when its first gasification/energy plant was built and by which company.
On rice marketing arrangements, Ramsammy pointed out that the Guyana-Venezuela deal is a bilateral cooperation programme that was entirely worked out between former President Bharrat Jagdeo and the late Venezuelan President, Hugo Chavez. He added that Venezuela had been importing rice for decades but that Guyana had never sold any meaningful amount of rice and paddy to Venezuela before the Jagdeo-Chavez agreement and PetroCaribe barter arrangements. This was in response to a claim in the APNU release that the Venezuelan market was initiated by Dr Turhane Doerga.
In 2010, Ramsammy said that the price of paddy was almost totally driven by the Venezuela deal and at that time, exports to the neighbouring country accounted for almost 70% of total production in Guyana. By contrast, he noted that in 2014, exports to Venezuela only account for about 30% of total production. “This means that the average price is now dictated by export to other destinations and while Guyana has been able to maintain favorable prices at these other destinations, the price is significantly lower than to the Venezuelan destination”, Ramsammy explained.
He added “Our almost total dependency on Venezuela has been reduced and should the Venezuelan market not be available at any future time, Guyana will be able to absorb the rice being sold to Venezuela in the other markets. Sensible management of the industry has created a much safer industry than the one which depended on a single market destination”.
He said that as his statement was being prepared, Guyana had exported more than 499,872 tons of rice, and other shipments were in the port for export.
“This means that we will attain another milestone, the first ever time that Guyana has exported 500,000 tons of rice. I recall several Opposition members criticizing me and urging me to (curtail) the expansion of production because `we can’t sell so much rice’. But our position was that we stood ready to support our farmers and millers. With Government’s facilitation the market is about 10 times what it was in 1990,” he said.
He acknowledged that in spite of the transactions being purely private sector – between private rice farmers and private millers – the GOG had intervened on several occasions in each crop to prompt full payment to farmers.
“We have worked with millers and bankers to ensure a more timely payment to farmers. While we are unhappy with the timeliness of payment by millers, we also acknowledge that while farmers used to wait for more than a year to receive payment, we have now reached a stage where payments are made within the crop”, Ramsammy said.
He said that as he wrote his statement, another $1.2B payment was being made by millers. This, he said, would mean that by the end of the year, less than 2% of payments due to farmers for the 2014 crops would be still outstanding.
With such large amounts being advanced by the government to the millers, questions will likely be raised about the accounting for those transactions to ensure that the government is fully reimbursed. Government has also made fertilisers available to farmers at concessional prices and this and other interventions, analysts say, would raise the question of the extent of the subsidies by government to the industry.
