Amendments to the Rice Factories Act and the Guyana Rice Development Board (GRDB) Act will seek to ensure that millers and exporters of rice settle their payments for paddy obtained in the previous crop before qualifying for the renewal of milling and export licences, Persaud declared.

In addition, outstanding payments to farmers after 42 days will attract an interest equal to the average lending rate of commercial banks among other options.

He made the disclosures at the launching of the Research and Extension Programme of the Rice Competitiveness programme at the GRDB's Guyana Rice Project Manage-ment Unit (GRPMU) office in Kingston yesterday.

Non-payment of farmers has been a chronic problem for many years and just last week the Guyana Rice Producers Association (GRPA) disclosed that farmers were presently owed hundreds of millions of dollars for their paddy. The GRPA charged that one company - the Mahaicony Rice Mills owed over $700 million, a claim the company denied when contacted by Stabroek News.

The European Union (EU) Rice Competitiveness programme was established for activities in seed production, multiplication and certification as well as the training of farmers on improved production techniques.

The total amount of financing for the Caribbean is Euro 25M with the programme being divided into three components, namely the regional, Suriname and Guyana components with Guyana directly benefiting from Euro 11.7M and an additional Euro 1M for research and extension.

The Research and Extension programme aims to enhance the competitive position of producers, processors, millers and other actors in the industry by improving productivity, management, research, training and marketing.

The Guyana component, partnered by the GRDB and the GRPA seeks to increase the efficiency and sustainability of the Guyana Rice Industry by enhancing rice production and productivity.

Minister Persaud also disclosed to loud cheers from the rice farmers present that "rice and inputs for the rice sector such as capital equipment, fertilizer and dieseline will not attract the (16%) value-added tax". As such, he said, the cost of inputs and the overall cost of production in the rice industry should be lower in 2007. He stated that other options are being examined to ensure that farmers are treated "fairly and justly". He noted that the Attorney General is assisting with the drafting of the relevant amendments and, contending that over one billion dollars was owed to farmers for paddy purchased by a few millers/exporters, stated that "it is sad that 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". He drew attention to the case of Alesie, charging that the company did not purchase paddy this crop but owed in excess of $42M to farmers for paddy purchased in previous crops.

In alluding to the $250M grant by the European Commission to the Guyana rice sector for development in research and extension, he urged the beneficiaries to make it a useful intervention and charged all involved to ensure that the results are achieved to the benefit of the total rice sector.

He stated, "a revolution in our research and extension endeavours plays an integral part in our industry's competitiveness" and noted, "the onus is on us to do the things within our control to facilitate greater productivity and increased production". He noted also that the project would invest significantly in the rice sector in the areas of research and extension, post harvest management and capacity building, among other needs.

General Secretary of the GRPA, Dharamkumar Seeraj, in his closing remarks said that the VAT announcement by Persaud had "eased a lot of minds" and declared that the "status quo will change for the better". He addressed Charge d' Affaires of the Delegation of the European Commission, Helen Jenkinson, stating that even though Guyana's rice entered the European market under a preferential agreement, 35% duty still had to be paid along with a security deposit when a contract is signed.

This, he said, affected the competitiveness of the rice, noting that no duty was paid for special rice from India and Pakistan, and the duty ought to be removed.