Local rice exporters are extremely horrified, threatened and apprehensive by the recent action of the Guyana Rice Development Board (GRDB) which seeks to monopolise the sale of rice to only two Jamaican companies. But it is apparent that there are conflicting positions on this matter.
The GRDB’s General Manager had said that “any company can export to and import from Jamaica, meaning buyers and sellers who meet the GRDB criteria will not be hindered in any way nor will it be hindered in any way nor will it limit importation into Jamaica to two Jamaican companies” (Guyana Chronicle April 25, 2016). On the other hand, the Agriculture Ministry’s website has made it clear that ‘the GRDB is the facilitator and the rice industry is owned by the Private Sector’. (www.agriculture.gov.gy/grdb)
Furthermore, the General Manager of the GRDB, Nizam Hassan (former General Manager of Guyana Marketing Corporation), in a press release had claimed that the actions of the GRDB is supported by the GRDB Act 1994 – he said that the approval of contracts is in accordance with the Act. He further stated that “the GRDB Act states clearly the procedure which should be taken when entering into a contract for the supply and sale of paddy and other products of paddy”.
However, what he fails to acknowledge is the fact that the GRDB does not have the mandate according to the Act to enter into such contractual arrangements purportedly on behalf of rice millers. It must be stated that rice exporters were not even party to this negotiation – so how can this contract be even made on their behalf? It was literally pushed down their throats! Is the General Manager stating that the GRDB is a rice miller? It is the GRDB that entered into the contract with the two Jamaican companies. Both the Agriculture Ministry website and the GRDB’s website are again clear on this matter when they state that the function of the GRDB is to work along with stakeholders in export and trade facilitation. In fact, the GRDB has a department which is solely responsible for the preparation of all relevant documentation for the exporting of rice from Guyana. They also assist in the facilitation of foreign investors in the purchase of Guyana’s rice and other rice products.
These websites are in direct agreement with the Guyana Rice Development Board Act Chapter 72:01 Section 4. This Section makes it clear that the GRDB should promote the expansion of the export trade in the rice industry, to facilitate the export of paddy and rice, to establish mechanisms and systems to assist rice producers to export rice and paddy and to provide assistance in negotiating and entering into contracts with foreign governments, agencies or persons for the export of paddy and rice and to engage in such activities which appear to the Board to be necessary for the purpose of increasing the export rice and paddy.
Hence, it is submitted that the GRDB has no legal jurisdiction to actually negotiate and enter into contracts to export rice-it can provide assistance!
Furthermore, this illegal and counter-trading act by the GRDB seeks to contravene, once again, its mandate in the GRDB Act. Section 4, subsection (5)(g) gives the GRDB the mandate ‘to monitor and guide the development of the rice industry having regard to changes in the export markets for rice and other products of paddy, paddy and products of rice’.
The GRDB, as one of its criteria to export to the Jamaican rice market is guilefully trying to delete branding and is insisting that rice millers supply white rice in bulk. What is the hidden agenda of the GRDB? This criterion cannot be seen as a ‘development’ of the rice industry. It is an established fact that branding is the key to business success and it requires huge amounts of financial and human resources to create and launch a successful brand. In effect, the GRDB is wilfully killing the growth of the rice industry. In today’s business world, product differentiation and branding is vital for the growth and development of the rice industry. It is only by creating and maintaining successful brands of rice that we will ensure our long-term market growth and survival on the international market scene.
This new development which will negatively affect one of the largest entrepreneurs and rice millers in Berbice and Guyana – Nand Persaud and Company – locally and internationally famous for its Karibee Brand of rice. This Company has taken more than 20 years and millions of dollars to create and promote an enduring brand name which is not only highly famous and a household name in Guyana but in the Caribbean and many parts of the world. It is a travesty to good business practice that such a prestigious brand name should be sacrificed by policymakers of the GRDB who have shown no concern for the long-term survival and development of the rice industry.
To deliberately destroy a successful brand name will greatly affect the competitive nature of business since this is what spurs efficiency in production, improvement in quality and in the effective marketing of products and services. The GRDB should be aware that bulk selling is injurious to rice millers who have spent time and money to ensure that their products are of superior quality and can secure a huge market share. This will also serve to hide poor quality and will result in giving the rice industry a bad reputation. This act of destroying a successful brand name is definitely taking the rice industry back to the dinosaur age!
I am calling on the Government and specifically, the Business Minister, the Guyana Rice Exporters and Millers Association, the Guyana Manufacturing Association and the Private Sector Commission, to intervene and protect the businesses affected by this capricious and detrimental action by the GRDB. Are the GRDB officials willing to circumvent their legal mandate in pursuit of self-aggrandisement?
Councillor, Region Six