Agriculture holds firm ground in economy
-- Minister reports By Chamanlall Naipaul
Guyana Chronicle
January 6, 2007

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AGRICULTURE performed creditably during last year and was able to sustain its significant contribution to the national economy, despite several challenges, including flooding, Agriculture Minister Robert Persaud reported yesterday.

Traditionally, he said, agriculture has been the largest contributor to the Gross Domestic Product (GDP) varying between 31% and 33%. However, the figure for last year is unavailable as this is still being compiled by the Ministry of Finance, Mr. Persaud said.

At a news conference to review the performance of the agriculture sector during 2006, among challenges he identified were the flooding early in the year and the roll-over effects of the 2005 flood; the assassination of his predecessor, Minister Satyadeow Sawh and the sugar price cuts imposed by the European Union (EU).

However, the minister said there were timely adjustments in response to the impact of the floods and appropriate measures undertaken through collaborative effort among the ministry’s agencies, with particular emphasis on animal welfare, health and food safety.

Persaud reported that sugar production for last year was 259,491 tonnes which fell short of the revised target of 279,000 tonnes.

Despite the shortfall in production, he assured that the Guyana Sugar Corporation (GUYSUCO) has been able to fulfil both its local and foreign markets, including 173,000 tonnes to the EU and 22,400 tonnes under the U.S. quota.

In addition, 6,885 tonnes were supplied under the EU Special Preferential Sugars, while packaged sugars and bagged Demerara Gold sales increased from 3,857 tonnes in 2005 to 4,731 tonnes in 2006, with the former being exported to 11 countries, he said.

Persaud added that two new products - Demerara Brown and Demerara White - were introduced to export markets with good response.

“The growth of the packaged sugar market has been phenomenal from 500 tonnes in 2003 to 4,731 tonnes in 2006,” he declared.

He also indicated that the sachet market is growing significantly with some 600,000 sold in 2006, almost doubling the figure of 2005 which saw sales totalling 313,200.

Offering an explanation for the industry not attaining its revised target of 279,000 tonnes, Persaud identified flooding, heavy rainfall, industrial action, particularly in the latter part of the year, and the spread of rodents on the estates as the factors which adversely affected production.

He said the Skeldon Sugar Modernisation Project (SSMP) is progressing apace and is slated for completion in February 2008.

A progress report he provided showed that the bagasse storage building is 90% complete; VHP (very high pol) foundations 75%; bulk fuel storage 75%; cane preparation plant 15%; process house building 75%; chemical water treatment house building 75%; power house building 50%; diffuser structure 15%; electrostatic precipitator support structure 75%; HO60 boiler pressure parts 75%; and HO61 boiler pressure parts 30%.

Persaud also said the Guyana Action Plan in response to the EU sugar price cut has been completed and GUYSUCO has put forward the Enmore Packaging Plant for funding under the initial 5.66M Euros available from the EU in 2006.

Rice Industry
The minister said the projected output of rice in 2006 was affected mainly due to the loss of about 12,000 acres during the first crop because of flooding and damage by cattle.

Nevertheless, increased yields in the second crop contributed towards improved production, Persaud noted, adding that average yield increased to 72 bags per hectare against a projected 68 bags.

As a result of the increased yield, he said, production actually increased in 2006 despite the loss in a large number of acres, as rice production was 306,828 tonnes against 273,237 tonnes in 2005, although in that year 114,685 hectares were sown and 106,645 reaped, compared to 110,273 sown and 102,083 hectares reaped in 2006.

Rice exports in 2006 reached 204,296 tonnes, earning some US$54.4M, while the comparable figures for 2005 were 182,175 tonnes and US$46.2M respectively, the minister reported.

On the worrisome issue of outstanding payments to farmers by some millers, Persaud assured that the issue is being addressed through several measures, including the amendment to the Rice Factories Act tabled in the National Assembly last month.

The amendment to the Act proposes that for a miller to be licensed to export rice he/she must not owe farmers more than 5% of the total cost of paddy sold to him/her.

The bill also proposes that millers must pay an interest rate comparable to the average commercial bank rate for outstanding payments for each day over 42 days, as well as depositing cash to prevent them hiding behind trading companies.

On the ongoing problem of outstanding payments to farmers involving the Alesie Group of Companies and Mahaicony Rice Mills, the minister reiterated that he is not satisfied with the response of the companies and is exploring the issue with a view to taking “serious action” against the defaulting millers.

He stopped short of specifying what action is being contemplated.