Five years after the rice deal with Panama and Guyana fell through, leaving farmers and millers with millions in debt and affecting their livelihoods by causing widespread ripple effects throughout the industry, they were finally paid in full, a total of $1.5 billion on Wednesday.
Six rice mills were completely shut down because of the outstanding debt with some now optimistic about restarting their operations.
“The debt at that time also accrued a lot of interest and we were looking at that and then we had the back and forth and we had to take legal action,” Minister of Agriculture, Zulfikar Mustapha said at the hand out of cheques to 19 millers on Wednesday.
Mustapha discussed the issues surrounding the 2018 Panama rice deal, under the previous David Granger APNU/AFC Coalition Government, where rice millers were left unpaid, leading to significant disruptions in the industry.
The original agreement, signed in 2014 under the PPP government, functioned smoothly, according to Mustapha.
However, in 2018 under the APNU+AFC government, Panama failed to pay for the rice supplied, leading to the breakdown and eventual termination of the agreement.
In September 2018, Panamanian authorities rejected 33 containers of rice shipments after it was found that parboiled rice was shipped instead of the requested White Rice. Panama at the time, was one of Guyana’s major export market for rice.
This caused a massive ripple effect on the local rice industry and millers were pushed to withhold some $353.9 million in commission to the Guyana Rice Development Board (GRDB). On Wednesday, Mustapha urged them to pay GRDB.
Minister Mustapha at the launch of a high yielding rice crop
Due to Panama’s failure to pay, the current government made a commitment to resolve the issue, which included taking legal action and attending numerous bilateral meetings. However, when these efforts were fruitless, the matter was taken to arbitration.
“We engaged a legal firm and we went to arbitration.
“We give them [Panama] an undertaking that once the millers are paid then we will ensure that we withdraw that arbitration,” Minister Mustapha stated.
Additionally, any small farmers still owed money will also be compensated, with GRDB authorized to deduct payments after consulting with the farmers and millers.
Mustapha credited President Irfaan Ali’s hard work in securing the agreement with Panama stating that, legal action would have been a much longer process.
Preamatie Baliram of D. Suklall Rice Industry had to completely close down her operations after being owed for some 10 containers of rice.
“We had to close down because we didn’t had money to pay the farmers and we didn’t want to go into debt seeing that we didn’t had the money but now that we have it, we will reopen,” an optimistic Baliram said.
Preamatie Baliram of D. Suklall Rice Industry
Prior to 2018, she had been in the rice industry since 2012. After she was not paid for the rice supplied, she had to lay off 18 workers.
Given the fact that the rice the mill was down for so long, Baliram said it will be more costly to reopen. But for her, it is all she has known and has renewed confidence in the industry.
Another rice miller, Dereck Ramroop of Ramroop Rice, also had to shut down his operation and lay off several workers.
Dereck Ramroop of Ramroop Rice
“We had to close, send home workers and we had to try to do other things to survive too, to try to make a living,” Ramroop stated as he mentioned he lost millions since 2018. Ramroop said he is also thinking about reopening his mill but it will take time.
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