PetroCaribe fund empty, government needs US15M for rice farmers, GuySuCo bailout undetermined

Last Updated on Thursday, 11 June 2015, 17:19 by GxMedia

by Zena Henry

The new Administration has apparently got its work cut out as several of the country’s main cash earners are either broke or continuously requiring bailout sums.

Minister of State, Joseph Harmon during Cabinet’s weekly press briefing held at Ministry of the Presidency Thursday June 11 explained that the money from Venezuela’s oil for rice agreement with Guyana is all gone.

He explained that the government must find US$15M to pay rice farmers who for some time have been strangled by low paddy prices due to insufficient markets. As it relates to the ailing sugar industry, the sum to aid this sector has not yet been determined although the company’s former Chief Executive Officer Rajendra Singh has posited that some $16B would be needed to keep the Guyana Sugar Corporation (GuySuCo) alive until year end.

Harmon said that Agriculture Minister, Noel Holder updated Cabinet on the sugar sector and it was satisfied, that the arrangements involving the recently set up Interim Management Committee was having a positive impact on the industry. He said, “Cabinet was also given the assurance that there are sufficient funds in GuySuCo to meet the wages bill for at least another two weeks.”

However, in rice, Harmon said when Cabinet was briefed about the PetroCaribe oil for rice set up, “the fact of the matter is that based on the very casual and in some cases, callous manner in which the previous Administration dealt with the proceeds from that arrangement, that the Fund was almost bankrupt, there’s nothing in it.”

Harmon said that while the Finance Minister explained already that there were sums of money utilized for construction of Hope Canal and other projects, “as it stands right now the situation with the export of paddy and rice to Venezuela, that we are actually going to have to find somewhere in the vicinity of $15M United States dollars to basically pay our farmers when they ship the next set of rice to Venezuela.”

Also with Guyana poised to break its own rice production levels and the next rice crop expecting to be massive, Harmon said “Cabinet approved of the setting up of a sub -committee to examine and aggressively look at markets for our rice.” The aggressive approach to finding foreign markets will be spearheaded by the Foreign Affairs Ministry, Agriculture and other stakeholders.

On this issue, Harmon noted that the recently awakened border contention with Venezuela, will not hamper that rice market which is currently the State’s only and largest importer of rice. He said while government might have some concerns about this issue, the Minister of Foreign Affairs has been in consultation with the Foreign Minister of Venezuela and their Ambassador here; “and they made it clear to us the issue as it relates to the decree recently signed into law by President Maduro will not affect the bilateral relations.”

It is suspected that the PetroCaribe fund would have held some 85 percent of the proceeds that came out of the Venezuelan rice deal. This can be totaled to hundreds of millions of US dollars since on the oil for rice shipments Guyana would have paid only 10 to 15 percent of the money with a long term agreement for gradual repayment. By the actions of the previous administration even this payback period has been jeopardized, the Minister suggested.