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Jan 11, 2016 News
– must have a structural solution
An agriculture stakeholder has made it clear that unless a structural solution is adopted for the Agriculture Sector and in particular the rice industry, any talk of government-sponsored subsidies becomes moot.
Dr. Turhane Doerga, former CEO of the Alesie Rice Group, stated in a recent interview that the model used internationally in countries with agriculture subsidies shows that while large amounts of money may go towards the Agriculture Sector, other sectors do not receive the same attention.
He noted that in Guyana’s case, a trend has been established of the executive plugging money into things that are actually losing money. Noting that this was not a good model, he queried what the policies for bringing rice back from the brink were.
Both of Guyana’s major agriculture industries, sugar and rice, have been beset by problems. The Guyana Sugar Corporation (GuySuCo) has been in dire financial straits for the past few years, with billions of dollars in bailouts being plugged into it by the government.
But despite these bailouts, the sugar industry is no better off than it was a decade ago.
As of December, 2015, the corporation’s debt was $78.6B according to General Manager Errol Hanoman. The Skeldon sugar factory, commissioned in 2009, has accounted for much of those debts.
While the older factories and more established factories used some 12 tonnes of cane to produce one tonne of sugar, Skeldon used over 17 tonnes of cane to produce the same amount of sugar.
Over the years there have been several glitches and attempts to fix them, including the punt dumper. Statistics show the factory has been the worst performing and the most inefficient in terms of the amount of cane it took to produce sugar.
Government ordered a Commission of Inquiry into GuySuCo last year, which examined the industry and went into the field in a bid to collect data and make recommendations.
Laid in parliament at the close of 2015, the report had recommended that the corporation be privatized. The cabinet had also studied the report in several retreats. However, a $12B bailout for the industry is reportedly already on the cards for the 2016 budget.
The rice industry has meanwhile been in dire straits also, particularly following the termination of the Venezuela/Guyana oil-for-rice arrangement. The rice agreement saw Guyana exporting rice to Venezuela at concessionary prices in return for Venezuela’s oil.
For 2015, Guyana’s rice industry recorded bumper crops and increased exports of rice, but there has been a significant decrease in money earned from the exports, compared to the corresponding period of 2014.
Many are contending that unless government subsidies are given to rice farmers, aimed at helping with procuring pesticides and fuels, the first rice crop will see a substantial drop in production due to lower prices and farmers leaving the industry.
According to Doerga, this has already been manifested with less than half of the rice fields in West Coast of Demerara, sowed.
“Planting is drastically reduced because no one is making the effort to market,” Doerga stated.
He made it clear that, particularly in the rice industry, marketing has to drive production and not the other way around. He noted that if subsidies are given, the core problems are still not fixed.
“Foremost, you have to position rice,” he said. “Marketing has to be strong. With an industry of this magnitude, marketing has to drive production.”
Doerga also expressed concern that the regulatory body of the rice industry- the Guyana Rice Development Board (GRDB) – was not performing to its full potential because of a shortage of professionals with years of practical experience in rice. He described this as a major concern.
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