Rohee laments inaction on Caricom rice safeguard
Guyana pushing for 40% external tariff
By Miranda La Rose
Stabroek News
June 5, 2003
Foreign Trade Minister Clement Rohee has expressed dismay that a Caricom safeguard mechanism for rice remains in limbo and he voiced concern that there could be collusion between importers and others to bring cheap rice into the region.
At a press conference yesterday, Rohee also said Guyana will stick with an agreement to export paddy to Jamaica despite Suriname’s protests.
Noting that the safeguard mechanism to protect the region’s industry from imports remains unsettled, Rohee said that an alternative proposal for a 40% CET (Common External Tariff) has been forwarded for discussion at the July Caricom Heads of Government meeting.
Rohee said the paddy agreement with Jamaica did not prohibit any bilateral discussions between Suriname and Jamaica. He has written to his Jamaican counterpart KD Knights about Guyana’s position on the issue.
At the 15th Council for Trade and Economic Development (COTED) meeting held in Georgetown last week, Suriname had expressed dissatisfaction with the agreement and was seeking to have it thrown out. However, Rohee said that because the Jamaican foreign affairs minister was not present, the issue was put forward to the next COTED meeting.
He said what he found disturbing was that throughout the negotiations Suriname had been present and had made no objections. Caribbean Rice Association (CRA) President, Beni Sankar in a separate interview with Stabroek News said that in hindsight the agreement signed with Jamaica could benefit the region. The agreement allows Jamaica extra-regional imports of 65,000 metric tonnes (MT) of paddy duty-free until December 2010.
Sankar said that he would have liked to see included in the agreement a provision for Jamaica’s additional rice consumption to come from the region. He noted that Jamaica consumed 90,000 MT of rice annually. The 65,000 MT of paddy imported duty free once processed would amount to 35,000 MT, so the remaining 55,000 MT should be accessed from within the region. He said Guyana and Suriname could supply this.
Rohee said that it was not a matter of the ability to meet the quota but a matter of standardisation of rice requirements in the region.
Both Rohee and Sankar noted that Guyana had been seeking a Caricom standard for rice, as well as a monitoring and a safeguard mechanism.
While COTED had agreed to the standardisation and monitoring mechanism, they noted that Caricom member countries had not implemented any of these.
Both Rohee and Sankar expressed the suspicion that cheap rice dumped on the world market was finding its way into the region without paying the 25% CET (Common External Tariff) required. They said this might be as a result of collusion between importers and persons operating within the region undermining decisions taken at Caricom.
Sankar feels there is some plan afoot to kill the rice industry not only in Guyana but in the region by operators within CARICOM.
He said that since the decisions on monitoring and standardisation were taken almost two years ago, Caricom had been unable to provide any data on the measures. With no way to punish a member country for not complying, it was more a moral obligation on the part of countries.
Rohee said he was disappointed that after five meetings over a two-year period, the safeguard mechanism, which had been approved in principle by COTED, had come “full circle”.
He said because of concerns raised about the mechanism and out of respect for the views of its partners, Guyana would support the convening of one final meeting of the joint working group on rice “to iron out some technical details and to refine the safeguard mechanism.” The safeguard mechanism is a system which allows the CET to fluctuate between 20% to 40%. This is tied to the price on the world market and is calculated using the Food and Agriculture Organisation price index. As the price on the world market comes down, the CET goes up to a maximum of 40% and as the price goes up it comes down to a minimum of 20%.
In the meantime the alternative proposal for a 40% CET on imported rice has been forwarded to the upcoming Heads of Government meeting. Rice attracts a 25% CET while all other agricultural products in the region attract 40%.
Rohee noted that the majority of extra-regional rice imports originated in the US which provided very high subsidies to farmers.
Sankar noted that the world price for rice was so low that even when rice was imported from the Far East, with the current 25% CET in place, importers could easily afford to pay it and be competitive.
He further said that at one time paddy also had a 40% CET but this was reduced to 25% and this could not be justified in any Caricom documentation. Paddy was on the list of ineligibles and somewhere between 1990 and 1992 it was removed. No one, he said, could explain the reason why this was done.
In the current situation, Sankar said that the only persons protected now by the 25% CET were the traders and not the rice producers or consumers.
Paddy has since been put back on the list but not before Jamaica had already signed a deal with a US company to import paddy duty free.
Stating that the region was rapidly losing its European market, Sankar said it would “eventually die for us.” This was why the regional market was so important.
He said the European Union was making over 20M Euros available to help the region’s industry become competitive. But to access that money the producers have to hold a financing conference to access the extra money that the EU money would not address.
He said the CRA had obtained US$150,000 from the Caribbean Development Bank to hold the conference. One month ago the Caricom Secretariat was given the mandate to contract a consultant to find out what was needed but to date no consultant had been identified.
Sankar said the officials went about making decisions, referring to standards and monitoring, “but when crunch time comes they do not support us. They should see rice not only as a commodity but as something of value to the region’s economic and cultural mainstay” and that “this lack of concern” had made himself and others “go broke.” In 1996, he said that the industry had revenues of US$102M with Kayman Sankar contributing US$20.6M. The others who had contributed were now out of business.
