THE Rice Producers Association (RPA) is calling on the Mahaicony Rice Mills (MRM) to settle some $400M in outstanding payments to farmers throughout the country for the last spring crop.

RPA General Secretary, Mr. Dharamkumar Seeraj, told the Guyana Chronicle that while the MRM is yet to pay farmers for that season, it has been purchasing cement and fertilisers for other purposes.

He pointed out too that the company is in the habit of selling the fertilisers to farmers it owes, instead of paying them; and this too at an exorbitant price.

Seeraj said this scheme is intended to tie farmers to MRM by trying to get them to be committed to re-sell their paddy to that mill.

The RPA General Secretary stressed that even though there is legislation in place to deal with defaulting millers, it should be revised to guarantee farmers are paid within six weeks.

The MRM earlier this year was heavily criticised by the RPA for owing farmers some $600M in payment for paddy for the autumn crop of last year.

But Seeraj said in June/July the company cleared outstanding payments to farmers for the autumn crop but is yet to do the same for this spring crop.

This newspaper made several attempts to obtain a comment from the company but efforts proved futile.

MRM, the largest single entity in the local rice industry, purchases about 35 per cent of the total amount of paddy produced and at times account for in excess of 35 per cent of exports.

The company has operation in Regions Two (Pomeroon/Supenaam), Five (Mahaica/Berbice) and Six (East Berbice/Corentyne).

Meanwhile, Seeraj noted that sowing has been completed in the rice growing regions, except for some areas in Regions Five and Six but these activities will finish in mid-August.

The top RPA official was optimistic that this crop will be a bumper one, given indications the weather is likely to improve dramatically.

Rice production for the first crop this year reached some 150,000 tonnes; 25,000 more that the adjusted target.

The revision was made following heavy rainfall in December 2008, which extended into February 2009. Many farmers who were flooded out restarted cultivation, braved the weather conditions, and reaped a commendable crop.

Seeraj also estimated that paddy prices will increase from around $2,800 per bag in the last crop, to between $3,000 and $4,000 this crop.

He explained that the availability of input at cheaper prices, and the regularisation of the financial situation in Europe, will be contributory factors for the price augmentation.

The low prices for paddy in the first crop were due to high input costs and the low global stock-to-use ratio for grains and cereals, which prompted a panic in buying.

Rice price for the last five years rose from an average of US$379 per tonne to US$602 per tonne in the first crop of 2009, a situation which has caused many major food exporting countries, including those that export rice, such as India, Pakistan and Thailand, to clamp down on their exports.

In response to the high prices and the perceived shortage, all food-producing countries expanded their cultivation.

This situation, Seeraj pointed out, had resulted in the first crop of 2009 being a bumper harvest, causing the major food exporting countries to relieve their export ban.

He said by the time of harvest of the second crop, which begins in August, the global financial environment should be under control, alluding to banks providing loans to rice traders.

Seeraj was optimistic that, as the financial crisis resolves itself, Guyana will gain more access to markets in Europe, and he noted that, by 2010, it will have duty and quota free access to those markets.