“In response to the queries by the RPA (Guyana Rice Producers Association), farmers and millers, I wish to confirm that rice and inputs for the rice sector, such as capital equipment, fertiliser and dieseline will not attract VAT”, he said during the launching of a European Union-funded Research and Extension Programme in Georgetown.

“I can even state that based on certain assumptions”, he added, “we can predict that the cost of inputs and even overall cost of production in the rice industry should be lower in 2007. I do hope that vendors and suppliers of inputs will ensure that benefits are passed on to farmers.”

General Secretary of the RPA, Dharamkumar Seeraj, applauded the promptness with which the minister dealt with the issue of VAT.

He recalled that following the supply of a list by his organisation of items in the sector and within a week of that, a special Cabinet meeting was called to deal with VAT and its implications for the rice sector.

Mr. Persaud also lamented that there are problems beyond the control of the government which are putting a brake on the industry and affecting the competitiveness of the rice sector.

“One such serious concern to me has been the more than one billion dollars owing to our farmers for paddy purchased by a few millers/exporters”, he said.

“It is sad that the negligence and breach of contract of a few can undermine the gains we are making in the industry and affect the livelihood of hundreds of our farmers. There has been even the distributing case of Alesie, which did not purchase paddy during this crop but owes in excess of $42M to farmers for paddy purchased in previous crops,” the minister charged.

On this score, Persaud disclosed that he has spoken with the Attorney General who is assisting with drafting relevant amendments to the Rice Factories Act and the Guyana Rice Development Board (GRDB) Act.

These, he said, are intended to ensure millers/exporters settle their payments for paddy in the previous crop before qualifying for the renewal of milling and export licences; and payments to farmers after 42 days will attract an interest equal to the average lending rate at commercial banks.

He, however, noted that the large majority of millers and exporters are honourable in their transactions with farmers.

The RPA earlier had signalled its intention to lobby at all levels to have the Rice Factories Act and Guyana Rice Development Board Act amended because of the recurrent payment problems to farmers.

At a press conference last week, Seeraj had criticised errant millers for owing farmers, pointing out that this is inhibiting sowing of the current rice crop which is less than half of what it was for the corresponding period during the previous crop.

He also warned that should this trend continue, 30% of the present crop could be harvested during the rainy season which would result in heavy losses to farmers and impact negatively on foreign exchange earnings and ultimately the national economy.

The rice industry yesterday received a boost with the launching of the European Union (EU) one million Euros (G$250M) funded Research and Extension Programme aimed at improving the competitiveness of the industry in the face of the dismantling of preferential markets under increasingly liberalised global trading.