The verdict is out. According to one of several front page headlines of Tuesday, Sept, 26, 2017, ‘Sugar, rice responsible for increase of non-performing loans — Finance Minister”.
Since early in the second half of 2015, the Guyana Rice Producers Association (RPA) warned about the decline in the future of the rice industry due to the loss of the two hundred thousand metric tonnes (200,000mt) high price paddy/rice market to Venezuela.
The 2015 contract to Venezuela, valued at US3 million, was secured by the then PPP/C Government, but the APNU/AFC Government managed to throw it away. In recognition of the loss, the RPA made several recommendations to the APNU/AFC Government to assist the rice industry to recover, but to no avail. The recommendations were not even responded to. The Government responded by increasing land rent and D&I charges in Region 5 from 00 per acre to ,000 per acre. And in some parts of Region 4, the increased charges were from 00 to ,000, effectively placing more burdens on the farmers.
The PPP even tabled a motion in the National Assembly to address the plight of farmers and the industry, but that motion seeking relief was defeated by the APNU/AFC one-seat majority. Today, the APNU/AFC Finance Minister is talking about non- performing loans in the sector.
What about the much touted Mexican Market? According to the Prime Minister’s public statements, this market would’ve replaced the 200,000 mt Venezuela Market.
So far, we have seen small shipments of only paddy going to Mexico at prices that contribute to further pauperising the farmers. The Government remained silent on the RPA public pronouncement that the Mexican deal is not good for the industry, because of the price and other conditions of purchase.
The front page headline of September 26, 2017 issue of the Guyana Chronicle screamed: “US.5M in Rice off to Cuba”. This amount is apparently payment for 7,500mt of rice.
A simple calculation would inform that this is at a rate of US6.66 per mt. Several questions arise about the conditions of sale. What are the payment terms? Is it FOB destination, or is it FOB origin? Is it a CIF contract? Some millers told the RPA that they were offered US0 per mt to supply rice to this market. A price that did not find favour with them, a price that is too low to be of help.
Whilst the RPA welcomes new markets and the renewal of old markets for our export, it should not be on unfavourable terms and conditions for our farmers.
From all indications, it would appear that the Cuban and Mexican markets, besides being a small percentage of our export, are also of a low price, which would contribute to further increase in non-performing loans, which the Minister of Finance has recently awakened to.