By Svetlana Marshall

AGRICULTURE Minister Noel Holder has pledged to press his government to review the taxation system with the hope of bringing much-needed relief to rice farmers. Minister Holder made this commitment in the National Assembly on Thursday in response to a motion put before the House by People’s Progressive Party/Civic (PPP/C) Member of Parliament Irfaan Ali on “The State of the Rice Industry in Guyana.”

During his fiery presentation, the former Housing and Water Minister contended that if the Government fails to secure the continuity of the Venezuelan market, the impacts can be detrimental to the economy. President David Granger only on Wednesday assured that he had for some time now mandated two of his ministers and Guyana’s Ambassador to Venezuela, Cheryl Miles to pursue the rice market in that country.
Minister Holder told the House that “it is a well-known fact that the contract with Venezuela was repudiated by Venezuela,” noting that efforts by the Government to resume shipments were not successful.
In light of the Opposition’s demand, the Agriculture Minister, in an effort to build his argument, painted a vivid picture of the financial struggles Venezuela now endures. “We are all aware of what has happened to the price of oil and the serious economic problems Venezuela as a nation faces. It is inconceivable that deals that are comparable in volume and price of the past are achievable again. Indeed, we are informed that the current arrangement between Venezuela and Suriname is at a price way below the US$760/ton received by Guyana,” Minister Holder said.
He said while Guyana stands to benefit from the reduction of oil prices, the same cannot be said for Venezuela. “Venezuela needs an oil price of US$120-US$140 per barrel to meet its obligations fully, including those to PetroCaribe. And given that the days of $100 per barrel oil may be gone for decades, with current market prices at US$40-50 a barrel, then it must be deduced that even if the government does resume negotiations with the Government of Venezuela, it will be very difficult for Venezuela to pursue this deal since they are limited,” Minister Holder said, as he quoted an article written by Dr. Clive Thomas under the caption, “Guyana’s perspective: The basic contradictions of PetroCaribe.”
Under the Petrocaribe agreement which came to an end in 2015 after commencing in 2009, Venezuela received a total of 624,647 metric tons of paddy and 355,628 metric tons of white rice valued at US$595,918 265.
During this period, the rice industry was transformed with farmers and millers gradually increasing their investments over the years.
Meanwhile, while alluding to the taxation system, the Agriculture Minister acknowledged the fact that VAT is now being charged on imported machinery, equipment and spares, and as such committed to have the system reviewed.
“This can be re-looked at and I will ensure this is done so that recommendations, if considered feasible, can be made to the Ministry of Finance,” he said.
Removal of taxes
Ali in his motion called for the immediate removal of all forms of taxes and duties on fuel for the industry, and the removal of all taxes and duties on inputs for the industry including machinery, equipment and spares.
The Agriculture Minister posited too that, “it may be possible to attempt this if one can relate the quantum of fuel used for field operations on a per acre basis,” but emphasised that this is the responsibility of the Rice Producers Association (RPA).
The PPP/C Member of Parliament is also proposing that there be a review of the terms and conditions of loans with commercial banks to take into account the low prices farmers are getting for their rice. This, the MP explained, will soften repayment conditions.
Taking Ali’s argument into account, Minister Holder said his ministry will commence discussion with the Ministry of Finance and commercial banks with the hope of softening repayment conditions.
“There is much potential for this to benefit our farmers, since according to the Bank of Guyana, the commercial banks loans and advances to the private paddy producers were G$65,504 Million in 2015; whilst from January to March 2016 it was $17,222. This is an increase of 19% for the same period (Jan-Mar) 2015,” the minister pointed out.
Additionally, the minister informed the House that the Government is prepared to import fertilizers and make it available to farmers at the lowest possible price. Former Legal Affairs Minister Anil Nandlall, former Education Minister Priya Manickchand and RPA General-Secretary Dharamkumar Seeraj – all of whom now sit on the Opposition’s side of the House spoke to the motion. The debate on “The State of the Rice Industry in Guyana” will recommence on May 24, when the National Assembly is reconvened.