Latest update April 18th, 2024 12:59 AM
Feb 04, 2016 News
The Government of Guyana has opened discussions to enter the rice milling enterprise, in a bid to make
the industry more competitive and to possibly act as a safeguard for rice farmers.
This is according to Minister of Agriculture, Noel Holder.
Holder said that this is a step that is still in the discussion phase, but it is certainly on the cards and can solve some of the problems with the industry.
“To solve (some of) the problem(s) of the rice industry, Government will have to get involved in milling,” he said. “If we don’t get involved in milling, the millers (can) carry the rice farmers to the cleaners.”
He used Guyana Oil Company (GUYOIL) as an example, noting that if Government did not have GUYOIL in place, oil companies would have taken advantage of the leeway to set their own prices. Holder noted that the sector is not competitive, but rather cartel-oriented.
There have been calls over the years from industry stakeholders for various measures, including the establishment of an Agricultural Development Bank and a revolving fund, as repeated delays by millers to pay farmers has sometimes resulted in widespread protests from farmers, due to monies owed for paddy purchases.
With the astronomical increases in rice production since 2013–when the country’s overall production first topped 500,000 tonnes– some stakeholders have argued that this has put strain on millers to the point where financing was not readily available at times to pay farmers.
There are existing stipulations, also – the Rice Factories Act of 2007- which makes it mandatory that millers pay farmers half of the money owed upon delivery of paddy, with an additional 42 days given to complete payments.
The fact that last year, Guyana lost the most profitable rice agreement it had with Venezuela, has hit the industry. This agreement had stipulated that Guyana import oil from Venezuela at a reduced cost, in exchange for the provision of rice to Venezuela.
This arrangement had led to Venezuela becoming Guyana’s single largest foreign market for rice. In fact, Venezuela would go on to account for over 30 per cent of rice exports, all at preferential prices. And while this is one of the initiatives Government is mulling, the concept has a history.
It would not be the first time that the Government has been involved in rice milling. The rice producing village of Burma, Mahaicony, was once home to the Burma Rice Development Station and to the Mahaicony-Abary Rice Development milling complex, which was governed by the Guyana Rice Milling & Marketing Authority (GRMMA).
The complex carried out milling for both export and for local use. The complex also provided other lateral benefits including electrical generation, but with the implementation of the structural adjustment program initiated by government in 1992, some mills were forced to close.
The rice mill eventually closed its operations in 2002.
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