I wish to refer to Mr. Michael Maxwell’s letter in Stabroek News entitled “The rice deal with Venezuela does not involve a money transfer; the Guyanese taxpayer will be paying rice farmers” dated August 31, 2010 in which he argued that there will be no transfer of money from Venezuela to Guyana but instead Guyanese tax payers will be paying the US$38 million to farmers. This is someone who is delving into an area unknown to him and therefore need to seek some information to edify his feeble mind for which I will humbly do in the next few lines. Background to the Venezuela-Guyana Rice Deal
At a meeting in held in New York last year, a discussion between President Jagdeo and President Chaves led to an arrangement for the supply of paddy and rice with the following condition: payment for the rice and paddy supplied will be done from payments for oil supplied under the PetroCarib deal. Subsequently arrangements with the Ministry of Agriculture/GRDB and Corporacion De Abastecimiento Y Servicios Agricolas (LA CASA) made this deal a reality.
The following are some points that I think will aid in improving the intelligence of Michael Maxwell on the “Venezuela rice deal”:
1.      The money to pay the millers/farmers comes from the Petro Caribe Account i.e. Government of Guyana obtains oil from Venezuela, this oil is sold to the Guyanese public and the proceeds are held in an account called the Petro Caribe account, to be paid as dictated by the oils supply agreement.  It therefore means that instead of repaying Venezuela directly for their oil through the Petro Caribe account we are instead using this money to pay to rice farmers/millers and then discounting this value from the value owed to Venezuela for oil.
Thus the country as a whole benefits since rice farmers are receiving from this deal a price higher than the world market price and the industry is vital to the growth and development of Guyana’s economy given the fact that agriculture accounts for over 20% of Guyana’s Gross Domestic product (GDP) with rice being the second major subsector for agriculture.
2.      Tax payers’ dollars or borrowed funds are Not Used to pay for the rice and paddy supply but rather the proceeds from the sale of oil.
3.      Maxwell mentioned that this is to a special interest group.  However, at all the meetings at the Ministry of Agriculture all the stakeholders were invited to discuss progress made. The last meeting was held on June 10, 2010 where more than fifty millers/farmers were present. I would also like to state that to date one farmer and twelve millers are participating. I would also like to take this opportunity to encourage others to come forward and be part of this.
4.      This deal further shows that the government is taking advantage of every opportunity so that the lives of all Guyanese especially the poor and vulnerable would continue to improve.
I would also like to take this opportunity to mention that export revenues for the rice sector has grown by 147% over the last five years and for 2010 to date, we have already seen export revenues increase by 14.1% (equivalent of US$9.7M) over its 2009.
Finally, I wish to reiterate the fact that the Venezuela-Guyana deal comes at no expense to the tax payers, but rather brings benefit to the poor rural communities that are engaged in rice farming.