More than one year after the historic PetroCaribe rice-for-oil Guyana-Venezuela deal collapsed, Shadow Finance Minister Irfaan Ali has moved a motion in the National Assembly urging Government to immediately reopen negotiations with the Bolivarian Republic of Venezuela on the rice and paddy trade.
Ali made several other recommendations in support of the rice industry, including the immediate removal of all forms of taxes and duties on fuel for the industry, removal of all taxes and duties on inputs for the industry, including machinery, equipment and spares and to suspend payment of land leases and drainage and irrigation charges.
The former minister noted that failure on the part of the Administration to provide the necessary critical support to rice farmers and the rice industry as a whole will have far reaching and detrimental effects on the country’s economy.
Last year, Venezuela abruptly halted the importation of rice from Guyana under the PetroCaribe arrangement. At that time, the PetroCaribe deal was to remain functional until it expired in November of that year, but owing to certain circumstances, Venezuela terminated the rice deal before the official end date.
Since the collapse of the arrangement, Guyana has not clinched similar rice deals with other countries.
However, Government had announced in March that the Spanish-speaking nation may still be purchasing Guyana’s rice, albeit through neighbouring Suriname.
The PetroCaribe deal was sealed by then President Bharrat Jagdeo with then Venezuelan President Hugo Chávez several years ago, which saw Guyana receiving oil in exchange for rice at premium rates.
Under the PetroCaribe deal, Guyana was required to pay upfront a percentage of the cost of fuel acquired from Venezuela, with the balance, which was placed in the PetroCaribe Fund at the Bank of Guyana, being treated as a loan repayable over 23 years, with a two-year grace period and two per cent interest.
Each deposit into the Fund was treated as a loan to the country with the same concessionary terms. This resulted in Guyana being able to defer its payments, which were at concessionary rates, over a longer period of time.
During his presentation to the National Assembly, Ali also called on the Government to commence discussions with all the commercial banks that lend to the industry to review terms and conditions of loans taking into account the low prices farmers are getting in order to ‘soften’ repayment conditions.
Following the collapse of the PetroCaribe deal and the hardships that were thrust upon rice farmers across the country, Opposition Leader Bharrat Jagdeo had proposed a plan to the Government to aid in reviving the industry; however, the Administration never paid it any heed.
Government has staunchly maintained the rice industry falls within the realm of the Private Sector and, therefore, those affected by the prevailing problems should not depend on Government for solutions.