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By Tusika Martin The export commission on rice was reduced from US$10 to US$4 with immediate effect yesterday in an effort to have millers offer farmers a much more competitive price for paddy.This reduction will represent a $240M slash from the Guyana Rice Development Board ‘development fund’.During a meeting with rice millers yesterday Minister of Agriculture, Robert Persaud, said that the commissions on rice exports are directed to the GRDB into a fund, which is utilised for enhancement and improvement activities within the sector.This announcement comes days after farmers began complaining that they were not receiving competitive price for their paddy.Highlighting other initiatives to cushion the impacts of reducing rice prices to farmers, Persaud told the millers that,Cheap TCU Horned Frogs Jerseys, after discussions with the Minister of Transport, Robeson Benn, it was agreed that one of the two vessels that are plying the Essequibo River will be dedicated exclusively for the transport of rice from the Essequibo Coast to Demerara at stimulated times.“There are two vessels operating,Cheap Jerseys From China, and he has indicated of working out some arrangement where one can be dedicated, based on the needs basis, to move the paddy to other parts…there are buyers from Demerara, who would want to tap into the paddy market on the Essequibo Coast and for some time that has been restrictive.”He added that efforts are being made to approach the Berbice River Bridge Company to determine whether an arrangement can be worked out to use the bridge to transport paddy.The Minister explained that the rice trade and the rice industry in Guyana are an open-market arrangement.“The Government does not control those variables… a decent and a very sustainable price for paddy should not be less than $3,000 a bag based on what we have looked at the varying cost of production.”Persaud stated that the issue is not with the market but with the price that is being offered.He noted that the European market quota for rice from Guyana has increased this year.“We have a situation where there is some level of uncertainty as to the price that would be paid to our farmers. We know that the farmers on the Essequibo Coast are moving ahead with their harvesting and they, too,Cheap Purdue Boilermakers Jerseys, have expressed a bit of concern as to what price they will be able to receive.”In some instances, he explained, millers have been accepting paddy without concluding the pricing arrangements with farmers.He urged millers that they need to ensure that whatever pricing mechanisms or arrangement are in place can be sustainable and profitable to the sector.“Millers need the farmers to produce and, even if there is a ‘bumpy’ patch as created by what is taking place on the global market, the milling community, as part of the entire grouping, must also look at ways it too can help to absorb some of those shocks.”The millers also expressed their frustration with the prices, stating that they are currently operating at great loss.“What the Government needs to realise is that, while it’s equally important for the farmers to remain profitable in order for the industry to be sustainable, it is equally important for the millers to remain profitable too… If the millers do not remain profitable then they will not be able to pay the farmers,” Dr Peter DeGroot, a miller from Fairfield Mahaicony, said.He explained to Persaud that the most critical factor facing farmers is the fact that, while the prices on the overseas market are known now,Gabe Carimi Wisconsin Jersey, the market trends have been very unpredictable of late.“We don’t know at this stage where that price is going… We will start buying paddy now and we will have to mill that paddy all the way up to August… We have to cater for that drop.”Dr DeGroot told the Minister that during the last crop paddy was bought at the high price, then price for rice began to fall, causing millers to now operate at a loss.“I don’t believe that there is a single miller who can say that he is milling last crop’s paddy and selling at the prices that exist now and making a profit.”These are the risks, the miller explained, that they face in the rice industry.“We cannot take the risk of paying the highest price now for paddy when we know that the rice price trend is on the way down. There is no indication if it will rise again… it would be foolhardy of any miller to be buying at a very high price,” the miller said.Whilst the industry does indeed need more value-added activities and diversification, Robert Badal of Guyana Stockfeed Incorporated said the reality of the situation is that the margins are so small or non-existent that the risk is so high.“Any measure that can cut financing cost or reduce cost of production will be very welcomed,” he said.Badal suggested that a short-term measure could be implemented where the tax on fuel can be waived for the millers and farmers for this crop.A review of this measure can be done in the following crop, he noted.He explained that, while the reduction of the export commission is welcomed,West Virginia Mountaineers Jerseys, the removal of tax from the fuel for the industry will be of greater relief.Responding to the suggesting, Minister Persaud said that while he is not making a case for or against the suggestions, the implication of such moves needs to be taken into consideration.“The second issue is the way in which this is managed is important too. If we direct support or relief to a sub-sector that needs a bit of cushioning because of what is taking place globally, you want to ensure that those benefits flow directly,” Persaud said.He explained that this was an issue that was examined by President Bharrat Jagdeo.Persaud said that the President’s concerns were centred on putting a proper mechanism in place to prevent an abuse of any system, while at the same time he was concerned whether or not this will contribute to a greater problem rather than solving one particular aspect of it.“But if we can think through a mechanism,Von Miller Texas A&M Jersey, and we are convincing enough to push in that direction, it is not something that I am against.”He promised to make representation on behalf of the sector to Cabinet.On Monday, Persaud will be meeting with the banking sector to continue discussions on the industry.“We will be briefing the bankers on Monday on the initiatives that we are pursuing, and to see what role they can play in terms of financing and ensuring the availability of financing for millers,LaMarcus Aldridge Texas Jersey, exporters and even farmers, to see in some cases if they can make some form of adjustments.”Rice production globally has increased causing an impact on prices.There is a projection that the global rice stock will increase by as much as five percent during 2009.