Guyana Rice Development Board held consultations with farmers and farmers’ representatives towards the end of the second rice crop in 2015, with the aim of assisting farmers with reducing production costs of growing paddy. Following the decision by Venezuela to stop importing rice and paddy from Guyana, millers were selling their rice on the world market between US $335 – US $400 per tonne. The price paid by Venezuela was US$ 760 per tonne. It therefore was imperative that farmers manage their production costs and improve productivity.
One of the ways in which this could have been done was in assisting in making fertilizer available to farmers at lower prices. The price for urea fertilizer at that time was between $5,500 – $6,500 per bag.
Because of the perceived urgency at the time Guyana Rice Development Board began discussions with suppliers overseas and subsequently entered into a contract with HDM Labs Inc. It is noteworthy, that when local suppliers became knowledgeable of GRDB’s attempt to reduce the cost of fertilizer to farmers for supply of urea, the price immediately fell between $1,000 – $2,000 per bag.
However, while payment for the fertilizer was by Letter of Credit established through a local commercial bank, the supplier requested that the Letter of Credit be irrevocable and transferable; which suggested that a supply from this source was not immediately available. However, the local bank only provides the service of irrevocable Letter of Credit which is not transferrable.
Guyana Rice Development Board continued to monitor the supply and prices of urea on the local market and has been in constant communication with HDM Labs Inc. since the supply of this commodity can no longer be considered urgent and immediate.