Parliament passes Bill to cultivate early payments for rice farmers

Kaieteur News
January 13, 2007

Related Links: Articles on rice
Letters Menu Archival Menu


Agriculture Minister Robert Persaud successfully piloted the Rice Factories (Amendment) Bill 2006, through the National Assembly amidst calls from the Opposition side of the House for the Bill to address market problems faced by millers and exporters.

The Bill was passed on Thursday and it amends the Rice Factories Act 1998 and repeals the Rice (Regulation of Manufacturing and Marketing) Act 1985.

Persaud said that the Bill was drafted out of a concern by government that many rice farmers, if not all, are faced with payment problems from the factory owners.

Persaud stated that most rice farmers do not receive their payments on time and those that have loans from the banks are unable to repay on time as a result and often times, the banks forecloses on the land and equipment of the farmers.

“The payment system is characterised by slow export turnover. Some millers owe farmers in excess of 6-12 months with one crop overlapping into the other.”
The Amendment to the Rice Factories Act makes it mandatory that millers pay a minimum of 95 percent of outstanding purchases to farmers at the end of the year before their mill/export licences are renewed.
Minister Persaud said with the enactment of the Amendment, it is expected that the accruing benefits will contribute to an improvement in the social and economic well-being of thousands of rural households.

He said that further amendments and regulations are also being drafted to improve the relationship between farmers and millers, and to regulate the purchase and milling of paddy.

Persaud posited that the Amendment was not a disincentive for millers, but was crafted to ensure viability of the rice industry.

“A mill can only operate if supplied with paddy and reliable supply will ensure no downtime. An exporter can only meet his market requirements if supplied with the correct quantity, adequate supply and timely delivery. This amendment serves as a deterrent for conduct which can harm the future of the industry.”

People's National Congress Reform-One Guyana (PNCR-1G) frontbencher, Anthony Vieira opposed the Bill, labeling it as “deceitful” since it fails to adequately address the real issues in the rice industry.

“Rice farmers are made to suffer not because of the millers but the government, which has not provided adequate market for exporters.”

However, PPP/C backbencher, Dharamkumar Seeraj stood in support of the Bill and debunked Vieira's position that the government has not done enough for the rice industry.

He stated that through the Guyana Rice Development Board (GRDB) and the Rice Producers Association (RPA), government has successfully sought market for Guyana 's product in the United States , Europe and other countries.

He added that the Bill received widespread support from stakeholders, including farmers and millers
“It is the government's duty to protect rice farmers and by amending this Bill it is a clear indication that they are protecting our rice farmers. In my discussions with millers it is clear that they do not oppose this piece of legislation since consultations were held with them,” Seeraj said.

Market rice

However, Alliance For Change (AFC) Member of Parliament, Khemraj Ramjattan slammed the government for only now putting in place legislation to protect farmers.

He said that the AFC supported the Amendment but called on the government to look at other initiatives that will eliminate the bottlenecks experienced by exporters.

Ramjattan posited that the exporters are unable to pay rice farmers because of the difficulties they themselves experience in marketing rice internationally.

He said that farmers will still have to seek legal redress even with the passage of the amended Act, unless government addresses the issue of marketing.

This position was also adopted by PNCR-1G James McAllister, who refuted claims made by Persaud that loans which were offered to farmers in the early 1990s have reduced to a minimum, due to problems in the industry caused mainly by the unilateral closure of the lucrative Other Countries Territories (OCT) route by the European Commission (EC).

Persaud explained that this was done in 1997 and pricing dropped by 50 percent.

In his rebuttal, McAllister furnished a letter which was signed by then Minister of Foreign Affairs, Clement Rohee, telling the EU that Guyana has no interest in continuing the OCT route.

Rohee justified his actions by stating that the government at the time needed to protect the industry from unscrupulous exporters who were at the time selling inferior rice.

McAllister also expressed concern that the Bill was placing a cap on the amount farmers will be allowed to collect and at the same time putting pressure on the millers.

PPP/C backbencher Anil Nandlall urged that the Bill be supported and questioned what was wrong with government protecting an industry that has been the country's mainstay for years.

Persaud, in moving to have the Bill passed, said that those who oppose the objectives of this amendment could be seen as making an effort to “stall the modernisation of our rice industry environment”.

“Those who oppose also oppose the interest of the rice farmers and the industry as a whole,”the Minister stressed.

He said government since 1992 has shown its commitment to the development of the rice industry and the interest of rice farmers and will continue to do so.

In 1998, government enacted the Rice Factories Act, No. 8 of 1998. The Act sought to regularise the construction of mills, paddy grading and purchasing, and improve the overall quality of rice exports.