the Ministry of Foreign Affairs

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– Govt. scrambles to find US$15M for rice farmers, millersBillions of dollars are missing from the PetroCaribe Fund, an account that was created to pay for oil taken under concessional terms from neighbouring Venezuela.The situation has left the Government scrambling to now find US$15M ($3B) to pay rice farmers and millers who have been supplying Venezuela under a rice-for-oil deal.In a bombshell announcement questioning where the money has gone, Minister of State, Joseph Harmon, yesterday blamed the situation on a “casual” and “callous” administration of the fund by the previous Government under the People’s Progressive Party/Civic (PPP/C).The “fund is almost bankrupt”…there is just nothing in it, he said.The coalition Government is now swiftly moving to revamp the management of the rice industry to ensure new markets are found and the situation regularized.PetroCaribe is an oil alliance with a number of Caribbean states and Venezuela to purchase oil on conditions of preferential payment. The alliance was launched almost a decade ago in Puerto La Cruz, Venezuela.Under the agreement, Guyana was required to establish the PetroCaribe Fund, pay part of the money for oil upfront and the rest over a number of years at a minimal interest rate.In October 2009, Guyana signed a special trade agreement with that neighbouring country to supply paddy and rice valued at US$18M. To pay the rice farmers and millers participating in the programme, the Government of Guyana is authorized to deduct monies from the fund and disburse through the Guyana Rice Development Board (GRDB).There are restrictions how the money can be withdrawn from the PetroCaribe Fund.According to Harmon, while the PPP/C Government has reportedly spent about US$15M from the fund for the construction of the Hope Canal, and a few other projects, there should been money there.It is unclear why farmers and millers were not paid for rice and paddy supplied. Many of them have been asking for payments. The new administration now has to find about US$15M for shipments to be made shortly with nothing much left in the account.This year’s rice and paddy deal is estimated to worth US$113M.It is no fault of the farmers and millers, the Minister said. It has everything to do with the way that the previous administration managed that fund.But the bad news for the rice industry just does not stop there. By October or November, there will thousands of tonnes of paddy and rice left on stock with no markets because of record production.The current markets in the US, Venezuela, Trinidad and Jamaica, among other places, will not be able to take off the surplus.The special sub-committee, comprising stakeholders from the Ministry of Agriculture, the Ministry of Foreign Affairs, the farmers association and GRDB, will specifically be exploring new markets, something that the country has not been able to do with much success in recent times.Minister Harmon also hinted of a major shakeup in the industry as far as its management is concerned. He said that a “governance mechanism” is being examined to ensure transparency in the appointment of boards and various entities within the rice industry,As a matter of fact, the Minister of Finance found the cupboard bare when he got it.The situation of the almost bankrupt account will have implications on the repayment time to Venezuela, Harmon said.“In my view, there was a serious mismanagement of the fund.”The minister could not immediately say the amount of money that is missing, but he said it is in the billions.Guyana’s fuel bill alone for the Guyana Power and Light Inc, was around US$100M per annum.That bill will of course be much more.Asked about the future of the rice deal in light of the tensions with Venezuela, Harmon said that it is assured as talks are ongoing between the Ministry of Foreign Affairs and the counterpart agency in the neighbouring country.The Minister stressed that the Government, as promised during its campaign, will strive to adhere to an administration that is transparent; is following international best practices and will put protective systems in place.“There is much work in the coming months to regularize what has gone wrong,” Harmon said.The fund would have been under the Ministry of Finance and regulated by the Bank of Guyana.