No PL 480 wheat aid for Guyana this year
‘Worldwide emergencies’ cited by US
By Gitanjali Singh
April 15, 2003
For the first time in eighteen years Guyana will not benefit from the US PL 480 grant programme as a result of “worldwide emergencies” including the war against Iraq and famine in Africa.
The PL 480 grant was used to help Guyana promote exchange rate stability, increase productivity and create new jobs but its absence this year would leave a $1B gap in the national budget and may result in programmes being cut.
Additionally, the National Milling Company (NMC), which has directly benefited with the sourcing of wheat from the US under the programme, would be forced to go onto the domestic market to secure foreign exchange to purchase wheat from commercial sources.
NMC, under the programme, did not require US currency to purchase wheat, as the wheat donated to Guyana was sold to this company and the counterpart resources were paid over to the government in a 60-day credit arrangement and used on critical infrastructure.
Chloe Noble, Programme Assistant at the United States Agency for International Development (USAID) yesterday confirmed Guyana would not benefit this year from the PL 480 grant programme for the 2003 fiscal year but would be considered for early programming for the 2004 year which starts on October 1.
She said the Title I programme under which Guyana has benefited has been “severely affected by the need to respond to emergencies worldwide” including the war in Iraq and famine in Africa. Guyana, she assured, re-mained very high on the US Department of Agriculture’s list for assistance but the other countries to receive assistance this year had been found to be facing a greater emergency.
The USAID local office was notified in March about the unavailability of resources for Guyana and the Ministry of Finance was advised at the start of this month. The NMC was notified last week.
Noble said the US government had indicated through the USDA that it would be considering Guyana for early programming for the 2004 fiscal year.
Don Franke, General Manager of NMC says once Guyana benefited from the PL 480 grant in the 2004 fiscal year and this benefit started flowing by September of this year, he only saw a three-month gap of supplies to be bridged.
The company is about to receive its last shipment of wheat under the 2002 fiscal year programme valued at US$5M.
NMC ships a total of 7,000 metric tonnes of wheat in a single shipment and Franke does not perceive any difficulty in the firm being able to ship adequate quantities, nor does he foresee any additional costs which will translate into higher prices. He told Stabroek News that the NMC is guaranteed a continuous supply of flour.
He noted, however, that securing the US currency on the local market to make the purchases would put some pressure on the Guyana dollar. The US government also paid for the cost of shipping the wheat to Guyana under the PL 480 programme.
Guyana has been receiving US PL 480 assistance since 1986, initially as loans which have since been written off, and then as grants in the last four years under the Food for Progress programme.
However, in the last three years, the quantum of resources available to Guyana has dwindled to an annual average of US$5M.
Last year’s programme, which was signed on June 25, provided for 25,000 metric tons of wheat. The sum in previous years had financed the purchase of 30,000 metric tonnes.
The counterpart funds in 2002 went to finance a cattle dip facility in Region Nine to prevent the spread of foot and mouth disease from neighbouring countries as well as the rehabilitation of drainage and irrigation canals to improve conditions for an estimated 79,500 acres of agricultural lands and for the construction of 230,000 linear feet of sea defences.
This year, the government was planning to spend the estimated $1B in counterpart resources on a number of drainage and irrigation projects.
The US government through its ambassador to Guyana has recognised that the counterpart resources open up avenues for new investment while expanding existing ones to improve agricultural productivity and create new jobs.
The Government of Guyana and USAID jointly identify the areas for use of the counterpart resources under the programme.