Outgoing Assistant Secretary-General for Caricom, Byron Blake says every effort was made to ascertain the availability of rice in Guyana before a CET waiver was given to a Jamaican company to import from outside the region, but it was deduced that none was available at that time.
He was responding to a report in last week's Stabroek Business which had stated that various local officials were dismayed that the Caricom Secretariat had given the waiver for 3000 tonnes of white rice worth some US$700,000, even though Guyana had not given it the all clear to do so.
A waiver of the 25% Common External Tariff (CET) on rice is granted to member states only when they show that supplies are unavailable within the region.
Blake confirmed that he had called Agriculture Minister Satyadeow Sawh, along with officials and rice mills to see what the situation was and learnt that there was a problem with availability and shipping obstacles.
He recalled that a few months ago the Jamaica Rice Milling Company owned by Archer Daniels Midland, a US grain conglomerate, indicated that it wanted to buy 7000 tonnes of rice from outside the region and was asking for a CET waiver.
As is the standard practice, a circular was sent out to all the Caricom countries and Guyana indicated it could supply that amount. However, the Jamaican ministry later reported that the company had checked with suppliers and could not get the rice. They did not say who they had checked with. Blake says he personally contacted the rice board and other producers who said Kayman Sankar had 1000 tonnes. No one else said they had rice except Mahaicony Rice Mills.
Blake recalls that Minster of Foreign Trade Clement Rohee was away in Mozambique at the time and that he spoke to Sawh who said he had to check. He added that the rice board told him it was not a time when they normally had alot of rice.
Blake said that in view of the fact that the Mahaicony mill and Kayman Sankar could provide 4000 MT it was decided to split the waiver and grant it for 3000 tonnes. Blake said he believed Sawh had accepted this arrangement and a certificate was issued. Stabroek Business understands that Caricom has since replied to a query by Minister Rohee indicating that Sawh had agreed to this.
A source close to Sawh had last week categorically denied giving any approval and noted that Sawh was not authorised to give one. He simply said he would check.
Blake said the Jamaican company then got in touch with Mahaicony Rice Mills and there was a question over the price due to a complicated shipping arrangement; Mahaicony originally intended to ship in bulk but was unable to get this approved so it would have had to send the rice in containers which is more expensive.
As for reports that the Kayman Sankar 1000 MT had sat on the wharf for several months, Blake said the ship that was supposed to collect it was not certified under the new security arrangements and that the shipment has since been cleared.
A local rice official is unswayed by Blake's statement. He says there was rice available at that time and he also asks if Caricom had ever gone to such lengths with any other commodity. He also notes that the same Jamaican company had reneged on agreements to supply various amounts of rice totalling 10,000 MT in April, May and June. Then "it suddenly pops up in July" asking for a waiver. He says it is clear that this is a company that does not want to buy rice from Guyana and is simply looking for a way out by going through the motions of making attempts at appearing to source supplies.
The official is also worried that the recent hurricane in Jamaica could make the matter worse as the Jamaican government could suspend the CET arrangements on the grounds of urgent supplies being needed.
Blake contacted at a later point by Stabroek Business said there was nothing to clear up as to whether any approval had been given. He saw the secretariat as having done its best to ascertain the situation of supplies at that time. He said before the Caricom Secretary-General can sign the waiver, "we must be confident that we have done all." He said as regards the various allegations of bad faith by the company none of that concerns the secretariat, "we have a regime to manage and we must get the best information to make a decision." Asked why the process could not wait until Rohee returned from Mozambique, Blake said there are time limits involved and as with any commodity there is often an element of urgency.
"The Caricom Secretariat does not do the bidding of any country or anybody. We are here to administer the Treaty (of Chaguaramas) and we call it as best we see it." Blake added that there would always be disputes in trading arrangements be it over cement or juice concentrate.
Meanwhile another Jamaica company, not said to be ADM, had requested a tax waiver from Caricom to import 20,000 MT of rice which it wanted to source from outside the region. Guyana and Suriname have both objected to the grant saying that they could supply the rice needed for the August to September period.
Although a month has since elapsed there is still no word from the Jamaican authorities to producers in either of the two countries.
GRDB General Manager Jagnarine Singh says local producers have not been approached to fill the order although they continue to supply their regular buyers in the island.
And while the two countries were waiting for word on the consignment, Jamaica imported a large quantity of rice that is raising eyebrows in the local industry.
According to the September 2 USDA weekly rice exports sales report, US exporters sold 62,700 MT including 14,000 MT to Jamaica during the period August 20-26.
Alesie International CEO Dr. Turhane Doerga says that the purchase creates a lot of uncertainty as it is feared that the rice will be imported duty-free given the precedent set a couple of months ago. Singh said the waiver on the 3000 MT would have to be explained and he expects that the issue would be raised at the next meeting of Caricom's Council for Trade and Economic Development (COTED).
"The next COTED will be a very nice, warm meeting to go to," he quipped.
But Doerga has more immediate concerns as Jamaica's latest buy might result in his company having to pay farmers less than what was anticipated for paddy from the next crop.
"It is very important because the crop is coming in now and the question is what do you pay farmers?"
He explained that if the rice is imported duty-free it means the paddy prices would be around $1300 a bag instead of the roughly $1600 to $1700 it had anticipated.
He added while Alesie guaranteed it could supply the market, the unfair competition in the form of subsidised rice imports would prove a new challenge. But he did point out that if the rice is taxed it would increase the chances of local products in the market. Singh agreed, but pointed out that the rice could still be sold at competitive prices in the high-end markets. In addition to the harm duty-free imports do to the local industry, Doerga said it questions the usefulness of Caricom.
"It means that Caricom is not sincere in what they stand for ..." he said.
"Rice production in all parts of the world is very feasible but if you have to compete against subsidised rice it kills you and the market is dead."
He said the question that needs to be answered is why Caricom continues to allow this to happen. Jamaica was granted a waiver on 65,000 MT of paddy last year after the Caricom Secretariat inadvertently removed paddy from the list of goods eligible for conditional duty exemption some years ago. But the island continues to import minimal quantities of paddy while seeking waivers on white rice imports.
For last year Jamaica imported from Guyana 4,507,273 Kgs of paddy, 4,784,687 Kgs of cargo parboiled rice, 12,008,188 Kgs in cargo white rice, 1,046,846 Kgs of wholly milled rice and 318,804 Kgs of broken rice. It also imported 2,975,285 Kgs of paddy, 1,238,235 Kgs of cargo parboiled rice, 2,086,791 of cargo white rice, 144,041 of semi-milled parboiled rice, 19,078 of semi-milled white rice, 1,493,965 Kgs of wholly-milled parboiled rice, 8,016,489 Kgs of wholly-milled white rice and 16,517,536 Kgs of broken rice from the US. Jamaica paid J$129,600,317 in taxes on rice imports from the US out of a total J$149,668,345 in 2003.
