Over 220,000 tonnes of rice has been exported so far for this year as the sector prepares for another historic first crop, which is currently at 359,000 tonnes.
The good news comes, however, in the wake of a disclosure on Thursday by the government that the PetroCaribe fund used to pay rice farmers has been depleted and concerns about the need to find new export markets.
Deputy General Manager of the Guyana Rice Development Board (GRDB) Ricky Ramraj told Stabroek News that with 98 percent of the first crop harvest almost completed, export markets have to be found. He said Guyana signed a 35,000-tonne export deal with Italy and has also maintained ongoing negotiations within the region to concretise deals with Cuba and Haiti, which are historically the two largest rice importing countries in the Caribbean.
Ramraj said the amount of rice in the system after last year’s second crop was approximately 148,000 tonnes. He noted that as Guyana’s capacity continues to grow, focus will be placed on the specialty rice markets which show potential for larger export deals globally.
Guyana currently has 213,000 tonnes of rice to export, including the remainder of the 150,000 tonnes outstanding for Venezuela as part of the PetroCaribe arrangement. Under the US$120 million Rice Agreement with Venezuela, 214,000 tonnes of paddy and rice will be shipped annually to the country, although there is room for more of either product to be shipped.
Ramraj said that for now, the GRDB would not be commenting on the fate of the Agreement given the recent flare-up of the territorial controversy between Guyana and Venezuela.
He said that the industry is seeking a larger paddy export market across Europe but noted that many of these arrangements are ongoing and, as a result, he did not wish to expand further on the details. According to Ramraj, over the years, farmers and millers have come to realise the changing landscape of the rice sector and are more aware that many countries want a finished product. “Millers who are investing right now know that the packing matters and they are understanding what is required, they will have to keep investing in those areas,” he said.
“A lot of people want that finished product. We have had to increase packaged and parboiled rice,” he added.
Previously, the agreement with Venezuela accounted for over 60 percent of Guyana’s annual rice exports but in the most recent years – 2013 and 2014 – this percentage has dropped to roughly around 30 percent. The sector’s reliance on the Venezuelan market is troubling because while the Agriculture Ministry through the GRDB has facilitated decent sized export markets, there has not been any annual agreement larger than 50,000 tonnes. Last year’s rice production exceeded 635,000 tonnes.
Payments and weather
Ramraj told Stabroek News that so far over $13.8 billion has been paid out to farmers and an additional $5 billion is outstanding. He said that across the rice growing regions, the amounts owed have been fairly even.
While he noted that payments are outstanding, Ramraj gave the impression that the situation is more under control than in previous years. He said that it was unfortunate that for the small scale farmers who cultivate less than 20 acres, lack of payments would significantly hamper sowing of their second crop more than the larger scale farmers.
Ramraj said the same could also apply for the rainy season. He noted that for farmers who harvested their first crop prior to the rains, the recent flooding damaged the newly sown second crop. He stated that for many of the farmers who just harvested, they welcomed the rains as it brought much needed water for the second crop.
Presently, over 46 percent of the second crop has been sown across regions Two through Six.
Speaking to Stabroek News, several Mahaicony rice farmers expressed frustration at the slow payment by millers. The small scale farmers were anxious to commence their second crop preparations, but were reliant on the payments. One farmer said that he would like to see small scale farmers treated differently from the larger scale farmers to ensure that lack of payment does not inadvertently cease their production.
On Thursday, Minister of State Joseph Harmon said that the new APNU+AFC government will be forced to find around US$15M ($3B) to pay rice farmers when they send their next shipment of rice to Venezuela due to the previous PPP/C administration’s mismanagement of the PetroCaribe fund, which is now bankrupt.
He also said Cabinet approved the setting up of a sub-committee to examine and to aggressively look at markets for rice. Cabinet was told that, based on the current production, by November of this year production of rice would increase to such a level that the market currently available would not be able to sustain it.
