Concessional financing for agriculture needed – rice magnate

By Jarryl Bryan

With financing being a fundamental concern of many current and prospective farmers, a rice magnate has become the latest voice to call for concessional financing to be made available for those in the sector, such as farmers.
According to rice industrialist Beni Sankar, some commercial banks usually give loans with a rate of approximately 14 per cent interest. Noting the difficulty in meeting this, the Chief Executive Officer (CEO) of Kayman Sankar and Company Ltd spoke of how Government could help.
“What is happening is that the banks are normally charging 14 per cent on money they lend,” Sankar said in a recent interview. “If the Government can get some money and lend the farmers at six per cent (interest), that’s something that can work.”

Sankar pointed to the European Union Development Fund (EDF) programme which commenced in 2003 with €24M. The programme had been implemented through the Forum of the Caribbean Group of African, Caribbean and Pacific States (CARIFORUM), with the Guyana Bank for Trade, Industry and Commerce (GBTI) managing the funds.
“There was a rice grant from the European Union — about US$11M — and that was administered by GBTI, where they lent money to farmers at a low interest, and when the farmers get their (crop) they pay them back. That money was supposed to have been revolving. Suriname got the same (system), and that is still revolving,” Sankar explained.
He noted that this is similar to a Guyana Agriculture and Industrial Development Bank (GAIBANK) scenario. According to Sankar, Guyana’s production strength has always been in the agriculture sector, and he stressed the necessity of an agriculture lending facility for those in need, so that the sector can be viable.
While funding has been provided for the agriculture industry through the Rural Development Fund and Micro Enterprises Development Fund, stakeholders have largely been reliant on the commercial banking sector for loans.

GAIBANK
At one time, farmers benefited from the GAIBANK, which was first established in 1973 by the Government as a state-owned development bank catering for the agricultural and industrial sectors.
The bank was intended to fulfil the financial needs of farmers that were not being met by the terms provided by the commercial banks. It helped, with grants and loans from the international community.
Since coming to office in 2015, the coalition government had signalled that GAIBANK’s return was on the cards. However, it had indicated that the logistics of the bank would be dependent on a study that would take into account the circumstances of GAIBANK’s collapse and the demise of other developmental banks within the Caribbean. In a bid to redress financial difficulties and recover its loan portfolio, which was lagging behind, GAIBANK had been merged with the Guyana National Co-operative Bank (GNCB).
Back in 2015, Finance Minister Winston Jordan had announced that the Government had requested that the Caribbean Development Bank (CDB) undertake a study into the feasibility of setting up the bank. Minister Jordan had also stated that a reanimated GAIBANK would not necessarily have the infrastructural form of a bank, but could be a window/division operating from a commercial bank.

Current state of rice
Meanwhile, Government has announced that approximately 7000-8000 bags of seed paddy are expected to be harvested at the Wales Estate in September. More specifically, the Public Relations Unit of the Guyana Sugar Corporation (GuySuCo) has said that 200 acres are under cultivation. Harvesting is expected to begin by the second week in September.
According to the sugar corporation, the lands at Wales which were previously used for sugar cane cultivation have been transformed into rice fields to accommodate the process of diversification of the industry. Among other things, rice has been determined as one of the feasible avenues of diversification.
GuySuCo further noted that, when harvested, the rice would be sold to the Guyana Rice Development Board. GuySuCo’s interest in rice is as a component of an integrated commercial aquaculture production and processing project.  Therefore, seed paddy cultivation is a part of the diversification programme, and is a preparatory measure to support the aquaculture project.
Recent end-of-crop figures provided by the Guyana Rice Development Board (GRDB) showed that farmers harvested a total of 89,290 hectares, or 23% over the first crop of 2016, resulting in paddy production of 518,667 metric tonnes of paddy – 26 percent more than for the same period last year.
However, while there have been increases in production, the Rice Board has been grappling with a decrease in exports of rice and paddy for the first four months of the year. This is as a result of exports to the Panama market for the first crop not being realised.
For the first crop 2017, exports amounted to 239,442 metric tonnes, some 60,000 tonnes less than for the same period last year. Foreign exchange earnings from the export of rice and paddy amounted to US$92,026.