Minister of Finance Winston Jordan has reiterated that all monies owed to millers for rice shipped to Venezuela have already been paid by government.
The minister, speaking exclusively to GINA, made it clear that the new administration was aware of the plight of some 7,000 farmers after it was discovered that the Petro Caribe Fund was left depleted by the previous administration. Hence, the decision was made to address this issue immediately. He emphasised that the Guyana Rice Development Board, as was previously stated, was given monies to pay millers for rice which had already been shipped to Venezuela.
The current challenge, the Minister stressed, was that the neighbouring country has halted all rice shipments since August. This action poses challenges for the farmers in meeting their contractual obligations under the current rice barter agreement, scheduled to end in November of this year. All of the rice shipped thus far, he said, has therefore been paid for, and monies handed over to Guyana Rice Development Board to meet payment to the farmers.
It was explained that under the original Petro- Caribe deal, Guyana would pay upfront a percentage of the cost of the fuel acquired from Venezuela, with the balance, which is placed in the Petro Caribe Fund at the Bank of Guyana, being treated as a loan repayable over 23 years, with a two-year grace period and 2% interest. The higher the price per barrel of oil acquired from Venezuela, the lower is the upfront payment and the higher is the amount deposited in the Fund. Each deposit into the Fund was treated as a loan to the country on the same concessionary terms. In effect, this resulted in Guyana being able to defer its payments, which were at very concessionary rates, over a longer period of time. However, with the Barter deal clinched by the previous Administration, the Petro-Caribe Fund at the Bank of Guyana was utilised to facilitate payments to farmers, via millers.
This new arrangement saw the rice shipments being used to write off Guyana’s debts to Venezuela. As a result, the Petro Caribe Fund became depleted, as payment to the farmers, in addition to other expenditure engaged in by the previous government, far exceeded the accumulation in the Fund. This move, along with the previous government’s move to utilise some of the funds for other purposes, eventually resulted in the “virtual emptying” of the Petro-Caribe Fund, according to the Finance Minister. The government, on recognising the gravity of the situation faced by the farmers, agreed to meet future payments to the farmers for rice shipped to Venezuela under the existing Barter Arrangement, which could not be met from the Petro Caribe Fund, to be paid from the Consolidated Fund.
It was made clear, by Minister Jordan, that it was in that context that the amount of 23 billion dollars was set aside under “Statutory Expenditure”. This mechanism allowed for the farmers to be paid promptly while, at the same time, allowing for the writing down of the outstanding oil debt to Venezuela. As a statutory expenditure, it did not need the approval of the National Assembly.