Panama commits to paying rice farmers debt with interest

Sep 05, 2020 News

The Government of Panama has indicated that they are committed to clearing their debt of $1.9B owed to Guyana for rice exports. They also stated that they will be repaying with interest and they are also committed to reviving their rice deal with the country. Even though the debt will be repaid the government of Panama has requested this to be done after the COVID-19 pandemic. This was confirmed by Minister of Agriculture Zulfikar Mustapha.

Kaieteur News understands that the money owed by Panama is from contracts signed in 2018 and 2019 for rice shipments from Guyana to Panama. The rice was shipped by the Guyana Rice Development Board (GRDB). A partial payment of US$550,000 was made for the 2018 contracts but absolutely no payments were made for the 2019 contract according to the Minister. The partial payment was used to pay rice millers in 2018 and the GRDB would have had to use their own money to pay rice millers afterward. It was also highlighted that the GRDB has a liability of $4.7 million and the delay in payments from Panama is a hanging threat to their revenue.
It was said that the Panamanian government market offers a higher price than other markets; however payments are sometimes delayed due to government processes.

Additionally, the GRDB believes that Panama’s commitment to reviving their rice deal with Guyana is good for the industry which includes farmers, millers, and other stakeholders. They also claimed to have seen a rise in the export of packaged rice which signals greater sales of value-added products.

For the first half of the year, rice exports managed to garner US$99 million in revenue.
“With regards to Packaged Parboiled Rice,” General Manager of the GRDB, Nizam Hassan had stated earlier, “we exported 3,705 tonnes in 2019 compared to 5,535 tonnes in 2020 and with regards to Packaged White Rice, which has really shown an astronomical jump — it has moved from 6,316 tonnes in 2019 to 47,484 tonnes in 2020.”

Minister Mustapha said that the government of Guyana will be examining the Caribbean markets for rice export opportunities, especially those countries that have indicated their willingness to explore these options too. He also stated that rice production is expected to increase tremendously and large-scale farmers also acknowledged that Mexico is interested in purchasing rice and that will be explored.

Guyanese rice millers have been securing private deals through the Mexican market in previous years; however these shipments to the Mexican market were done privately. The GRDB did not handle any of the monies for rice supplied to that market.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News