Sep 25, 2010 News
The Guyana Rice Development Board (GRDB) has partnered with Mahaicony Rice Limited (MRL) in a draft agreement that could bring some relief to rice farmers in Regions Two and Six.
Signed on Wednesday, the agreement sees MRL supplying paddy to Venezuela from purchases made in Regions Two and Six.
According to the contract, purchasing should have begun yesterday. The other end of the bargain sees the proceeds of the sale being paid to ‘a list of farmers approved but the GRDB with concurrence by MRL.’
Farmers will receive their payments from a special account at the Demerara Bank controlled by GRDB and MRL. MRL is obligated to pay the farmers weekly under the agreement. Excess funds in the account will be used to pay ‘all other farmers who will be so determined by GRDB with the concurrence of MRL.’
In recent months MRL has been a sore point for many farmers who claimed that the company has not paid them for paddy that it received from them. The agreement is a product of a meeting held between the Minister and officials of the Holland based company who arrived in Guyana to address the crisis.
The complaints by the farmers had even prompted the Ministry to dispatch a team of auditors to determine exactly just how much MRL actually owed to the rice farmers.
According to officials, MRL which purchases over 40 percent of the paddy produced in Guyana, was hit hard by the global financial crisis which in turn subsequently affected its cash flow. The delays in payment were too much however and saw several rice farmers suing MRL to the tune of some $200M for monies owed.
The agreement which only covers the second crop for 2010 with a right of renewal will be terminated after the conclusion of the paddy shipment(s) that the GRDB and MRL will mutually agree to as well as the completion of payment to farmers.
The agreement was one of the talking points at a meeting held yesterday by the Minister of Agriculture, Robert Persaud, and rice millers, exporters and representatives of the rice farmers and GRDB.
Persaud said that despite dark forecasts earlier this year the projections for 2010 are very good, with numbers superseding last year’s. He said that this year’s projections are some 356,000 tons as opposed to the 342,000 tons from last year.
He also pointed out that in spite of the fact that farmers had to deal with El Nino, the industry still managed to see some 20,000 more acres brought under cultivation.
The Minister said, “Our farmers and producers have been very focused and responsive …” Persaud went on to point out that as of Thursday, some 14 per cent of the crop or thereabouts would have been harvested and millers have already commenced purchasing while some exporters have already been able to negotiate and possibly complete export contracts.
The opening of the Venezuelan market to the general farming populace has according to Persaud, created an overwhelming response.
He said that from the Expressions of Interest submitted there is a supply of some 80,870 tons of paddy and 35,000 tons of white rice when the agreement with Venezuela only requires 50,000 tons and 20,000 tons respectively.
He said that with reference to the ‘oversubscription’, the GRDB has been tasked with coming up with a procedure by which there is equity as well as ‘due process’ in the selections.
Persaud noted that when the venture to supply the Venezuelan market had first started out, “… we had to beg, we had to urge and even cajole people into supplying this market.” He went on to say that “The prices we are getting and will get are certainly competitive … and because of the surplus, traditional markets will not be jeopardized.”
The Minister noted, “If this second arrangement works well and we are able to meet the target – we start supplying from next month – we’ll be looking for a greater share of the market.”
Persaud spoke of a report from the Food and Agriculture Organisation, which he said was hinting that we may hit or come close to the 2008 food prices. This he said was, “good for all of us, good for the industry.”
Persaud appealed to those gathered that they begin to think in terms of value added product lines arguing that value added prices are quite attractive and quite stable as opposed to bulk exports. He called for more package and specialty rice as the Ministry and stakeholders look at making the industry more dynamic and responsive to the overall trends.
Persaud also urged millers and exporters to ensure that they offer fair and decent prices to rice farmers as well as honour the terms and conditions of their payments to farmers.
A representative of the Rice Producers Association, Dharamkumar Seeraj, also addressed those gathered at the meeting. He said that the recent arrangement for providing paddy to Venezuela is ‘the way to go’.
He pointed out that the agreement will only take care of some 1.3 million bags of paddy yet every season more than four million bags are produced every season. That means, according to Seeraj, that almost 70 per cent of the rice production still needs a stable market.
He also commented on the rising grain prices and noted that while the FAO is concerned over the spiraling grain prices ‘we here in Georgetown see it as an advantage’. He said the situation puts stakeholders in the industry a little more at ease.
The meeting yesterday, according to Persaud, was a continuation of meetings between the Ministry and the stakeholders in the industry. In the last few days the Ministry has been meeting with farmers in West Demerara and East Berbice, while over the coming weekend and week, they will travel to meet others in West Berbice and on the Essequibo coast. Persaud noted that they would also be making efforts to revisit some areas.
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