New investors in Burma rice complex say they won't cut and run
(Christopher Yaw)
Stabroek News
November 17, 2006
The Mahaicony, Abary Rice Development Scheme (MARDS) Rice Milling Complex at Burma before the SAJ Rice Group rehabilitated it in January.
The SAJ Rice Group, which now operates the Mahaicony, Abary Rice Development Scheme (MARDS) Rice Milling Complex at Burma, says past disagreements between farmers and millers are affecting its production.
SAJ Secretary Pedro Castelo said rival millers and industry personnel are trying to scare farmers into believing that the company would abscond with their paddy and such tactics are affecting their ability to produce. He said the company has been buying Guyana rice for the last five years and the decision to partner with the government to run the state-owned company stemmed from a need to ensure the supply. Castelo said the company has invested a significant sum with an option to purchase the property and "this is the assurance the government and farmers have because too much was invested to run (away)." The company has refurbished the complex at a reported cost of US$600,000 and, for the purposes of transparency; all of the documents pertaining to the acquisition are lodged at the Guyana Office for Investment and the Bank of Guyana.
The company had, earlier this year, inked a ten-year deal with the government to operate the scheme which had become defunct after encountering difficulties with farmers as regards timely payments for their crop. Crops are normally reaped twice yearly and, according to reports, farmers were at times made to wait for payments after one or two crops in a season. Castelo said too much emphasis is being placed on the European market and suggested that more markets need to be opened up. "The rice industry is in transition in Guyana because of the reduction in preferential markets," he said, likening the situation to farmers not receiving satisfactory payments that would allow them to cultivate new crop. Castelo said the latest purchase of rice under the new management has been 180,000 bags of paddy at $1,800 per bag and so far 50% of the bags have been paid for with an agreement for payment for the other half by the first week in December.
The company only bought 60,000 bags from the first crop to test the mill after the first rehabilitation works were completed. Castelo said the company's target is 250,000 bags of rice for the crop and that it buys rice from farmers and other millers for export to Brazil and Haiti. The SAJ group has a contract to supply 200,000 bags of cargo rice per crop to Brazil, which will be shipped this week. The Haitian market requires some 400,000 bags of white rice per crop. Castelo said now that the company is in operation it has provided employment for 75 people, during the cropping season and the off-season quota is 40.
He said MARDS has 2,700 acres of rice land which has the potential to produce about 70,000 bags of rice. The company has the first option to lease or buy the land over ten years, however, he said, "We want to have the mill running properly and then by next year we would negotiate for that property."
Castelo said the company, which has European links, is facing some challenges including the US$6 per tonne or total of $1.1M tax to export. He said that being "penalized to export" would be more agreeable if the funds collected were channelled to research to assist farmers with increasing their yield of bags per acre from which all stakeholders could benefit.