Destabilization of the Local Rice Industry?

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Updated: December 15, 2015

Importer Jack Charles of Xtra House is determined to import Guyanese rice into the country to sell on the local market at a cheaper price. While a cheaper price is good news for consumers, the idea of having rice imported in the country and sold on the local market is terrifying for local producers. The Agro Productive Sector, chaired by Dr. Henry Canton, believes that Guyanese rice sold in Belize at a cheaper price will put the rice industry at risk. Charles wants to sell the rice for 69 cents per pound and he is ready to do this week after a container carrying more than forty tones of rice is expected in the country. Dr. Canton and the local farmers believe that this not only spells the end of them but the destabilization of the entire rice industry in Belize.

DR HENRY CANTON

“Rice farmers which represent  more than a hundred people are in a position they do not want this rice into Belize; it’s going to create havoc and disturb terribly, one of the budding and very sensitive industries that can become an import substitution and possibly a strong export product very quickly if given the opportunity to do so. In my mind, Mr.Charles or the importers’ position is to go to the court of public opinion and I don’t know anybody in this world that would not like something cheaper so I think it is an unfair fight in the court of public opinion but if one was to think about the economy and the real long term effect that this will have on us they would think again but I don’t think everybody truly understands what it takes to develop and industry and in particular an agricultural industry where the risks are always out there.”

LOCAL REPORTER

“What are some of the sentiments that the local rice producers have been sharing with you?”

DR HENRY CANTON

“They are upset because they thought that they could go aheard and put a lot more rice in ground  because they thought they had settled this local issue and what they were trying to do now is not only to increase locally but increase to go onto export markets. They have planted this rice, this rice is now in ground for this issue to jump up again. On rice getting into town what can we do? At that point in time I guess we just have to work with government on it because the local rice producers can’t do anything to the importer it would have to be a government’s position. I know that in the past we had shipped a container of chickens to Trinidad and without the right permitting it was not taken off the ship and it was sent back to Belize and we are hoping that without the right permit on this rice that it won’t  be allowed to be offloaded.”

HIPOLITO NOVELO

“Do you believe what Jack Charles said saying that he just wants to import 20%of the rice that is  consumed locally and he doesn’t want to create a monopoly of imported rice?”

DR HENRY CANTON

Well all you need is to take 20% out of a very small market of 300,000 people and if you do the mathematics you will see the damage that it will do. My other question is how long can he hold the price down? Once that rice gets into the market he’s not going to be able to hold it to that .69 cents; that is going to immediately go up and be retailed at the same price as the local rice. I think it’s a fallacy to speak to the Belizean public on what he is saying he is going to do when he knows that he is not going to be able to control any of that. On the social issue of .50 cent rice these guys that grow rice are always donating rice for free into the social structure so I think as good corporate citizens the rice growers have been committed to social rice.”

Charles would not grant an interview but he did allow his consultant, Sergio Garcia to speak on his behalf. Garica is an agronomist and former CEO in the Ministry of Agriculture and he told us that the Government of Belize cannot prohibit Charles from importing rice since we are part of the CSME market. Here is how he explained it…

SERGIO GARCIA

“Rice or any CARICOM product does not need and import license and similarly our products can enter any other country without hindrance. No countries should use quantitative restrictions to a CARICOM product. The second aspect is that the only issue that the country should have is SPS or the risk  to the agricultural health which is where BAHA comes in. BAHA’s main focus is to safeguard the health of the agriculture sector including human health but I want to say that last year Guyanese rice was imported and was sold, imported by BMDC and I understand it was sold by the same producers who were crying foul. So in other words it is established as a fact that Belize has done a risk assessment of rice coming in from Guyana and doesn’t pose any risk to the Belizean society. The third component is food security. The producers and some public sector officials are saying that food security will be threatened, that is not true. Food security means that the average Belizean can access food. In Belize the problem is not a lack of availability, in other words there is enough food. The problem is one of access, that the average Belizean cannot afford the food.”

LOCAL REPORTER

“What is stopping him from investing in the local rice market?”

SERGIO GARCIA

“Again, who has the monopoly on rice? Who has the monopoly I think he has never said he doesn’t want to invest. We met with farmers because we wanted to export beans and you know what the response was? They don’t want to.”

LOCAL REPORTER

“Would you say that it’s logical for someone to import rice in a country where there is a surplus of rice?”

SERGIO GARCIA

“How will it be surplus? How can it be surplus when 3.2 million pounds of rice was imported last year? I don’t buy that issue with surplus and we are saying that we are not killing the farmers, the farmers and these four big millers are the ones who have the monopoly, still have 80% of the market. I don’t see Mr. Charles trying to hog up all the market. What we are trying to do is that that will also create the public pressure on competition. Competition is good for any national production so the argument of cost of production and driving them out of business is difficult for us to believe and I think that Mr. Charles is clear saying that if producers drop their price that he will consider his position.”

We also spoke to Jose Alpuche, the Chief Executive Officer in the Ministry of Agriculture about the possibilities of Guyanese rice being sold on the local market.

JOSE ALPUCHE

The CSME obligations are quite clear as it relates to rice. I think we made it abundantly clear that we don’t have quantitative restrictions with CARICOM products unless injury is caused then we can impose quantitative restrictions. What we have though for all animal and plant materials coming into the country is the requirement for sanitary permitting to be adhered to as prescribed by BAHA. Risk analysis is one thing but you have to get a permit every time you are bringing in any particular shipment of either plant or animal materials and I’ll give you the example of when you are bringing in ham you have to get a permit so it’s that permitting that every shipment needs to be done. They are being disingenuous saying that this is not required. They are an established import company they know exactly the move. He has no limitation as it relates to quantitative so any amount that he says he will import that is totally up to him as a private operator but nothing restricts him from importing more than 20%. This is not an issue of Jack Charles’s this is a matter of an industry in the region that is quite heavily subsidized, that has lost its market and felt that they can literally dump and that is what is happening right now.

The Belize Bureau of Standards sent out a release today in regards to the decrease of controlled price for Grade C rice. The release says that Rice Grade C will retail at a maximum wholesale of 80 cents and retail at 90 cents per pound.