The rice barter agreement with Venezuela will commence for 2015 with a drop in prices by US$20 per tonne and a new mechanism is in place for the allocation of quotas to millers.
In 2014 Guyana shipped rice to Venezuela under the PetroCaribe agreement for roughly US780 per tonne, this year the cost, insurance and freight figure will be US$760 per tonne. The price for paddy remains at US$480 per tonne. Under the rice agreement 120,000 tonnes of paddy and 74,000 tonnes of white rice will be shipped to Venezuela.
The drop in price has some critics stating that the rice quality may be at fault, while others within the industry have said that the vastly expanded production means that rice prices are expected to decrease.
Head of the Rice Millers Association, Dr Peter deGroot told Stabroek News that on Tuesday millers met with the Guyana Rice Development Board (GRDB) at the Agriculture Ministry to be briefed on the specifications of the Venezuela agreement and what that means for the industry.
He relayed that the ministry stated that the agreement will be responsible for 28% of Guyana’s rice export markets. He said that a breakdown was given to millers as to how the quota will be shared out.
DeGroot said that the GRDB will be assessing millers on four criteria: how much rice and paddy they have exported to Venezuela in the past three years, the quantity of paddy a miller purchased in the last three years along with the price paid and how well they would have adhered to the Factory Act and paid rice farmers within six weeks.
He noted that millers who were shown to be heavily reliant on Venezuela would not be favoured as this would show a dependency on the market. He said that the role of the GRDB wasn’t to keep finding export markets and the millers needed to be more aggressive in finding their own markets while being assisted with the Venezuelan deal among others.
He noted that a committee was set up by the millers and they requested to be involved in the team that would devise the quotas for each miller to export under the Venezuela agreement.
DeGroot said that the GRDB has a fine line to play due to the industry having to remain competitive. He dismissed claims that certain millers are favoured with larger percentages of the Venezuelan deal. He told this newspaper that due to the competitiveness of the industry there will always be millers who feel they aren’t getting a large enough piece of the pie however that was why the four criteria were established to level the playing field.
He noted that millers could disclose a false amount of paddy purchased from farmers in the hopes of having the GRDB give them a larger Venezuelan quota. DeGroot said that only the GRDB would have information on the individual milling quotas.
DeGroot said that last year the GRDB determined the quotas and since the millers severely disagreed an initiative was taken this year to include the millers in the decision-making process.
Earlier this month, Guyana and Venezuela concluded negotiations for the annual rice barter agreement with shipments to commence later in the month after the first crop harvest begins.
The agreement is worth roughly US$120M which is a decline from previous years. Last year the agreement was estimated to be worth US$130M though Guyana’s shipments of rice and paddy have stayed relatively in line with the 200,000-tonne agreement.
Guyana’s rice sector is expected to expand again in 2015. Last year’s production exceeded a whopping 635,000 tonnes. Of that figure, more than 501,000 tonnes was exported.
Meanwhile, outstanding payments to farmers continue to temper the
industry’s success. Agriculture Minister Dr Leslie Ramsammy stated that in 2014 farmers sold $44B in paddy to millers and yet not all farmers have been paid.
The government assisted by injecting $5B to compensate for late payments throughout the year. It is unclear where this $5b came from and what steps are in place to make certain that it is fully repaid.
Ramsammy said that the completion of 2014 payments was ongoing. Most recently in February, Black Bush Polder, Corentyne rice farmers protested in the streets over non-payment for their paddy. They said that the Black Bush Mill was delinquent to the tune of $140M.
As farmers prepare for the first crop harvest, many are frustrated over the low price being set for paddy. Dharamkumar Seeraj of the Rice Producers Association (RPA) recently told farmers to expect $3,000 to be the price paid for the best paddy grade. Paddy prices have long been a bone of contention between farmers and millers.
Farmers have also not been impressed with the intervention by the RPA and the Guyana Rice Development Board on the matter. Farmers have routinely complained that they receive well below the average price, some even citing that millers offer $2000 per bag of paddy which they are forced to accept because of the lack of storage facilities.
