Rice as a political football

The news that the US rushed in to fill the shortfall in the rice imports of Venezuela occasioned by the latter’s interruption of shipments on the contract with our country must have come as a shock to many. However, this is simply an illustration on how the modern global trading system operates through a logic driven by countries weighing their economic interests and not reflexively reacting to political disputes.

The contretemps with Venezuela began after the new Government grounded the Venezuelan air carrier Conviasa Airlines in June due to an alleged non-payment of a bond to cover potentially stranded passengers. Forty passengers were stranded. Even though the airline had been flying for two years, it appeared that no bond had been demanded before. The carrier had only recently settled its landing and other ancillary fees. The Government then announced that Venezuela halted all shipments of rice and paddy on the 150,000 tonnes outstanding on the 200,000 tonne contract, which was not supposed to expire until the end of November. Two hundred and seventy containers of rice were said to be stranded on wharves between Guyana and Venezuela.

All of this occurred against the background of Venezuela placing its border controversy with Guyana on the front burner once again after the US oil giant ExxonMobil struck oil off the Essequibo coast. Venezuela had issued a maritime decree purporting to claim most of the waters off the Essequibo, but later had to amend this. In the meantime, the new Guyana Government accepted the previous Administration’s decision to quit the United Nations Secretary General Good Officer process that was overseeing the Geneva Agreement on the border controversy and requested a “juridical” settlement. This the Venezuelans refused.

The tit-for-tat increased its pace as Guyana took its case to the Caricom Heads of Government meeting in July and President David Granger’s statement that Guyana had to get rid of the “monkey on its back” – meaning the border controversy – was interpreted by President Nicolás Maduro of Venezuela as a “racist” insult against Venezuela.

The Guyana Government accused the Venezuelans of using “economic pressure” to force concessions on the border controversy. Finance Minister Winston Jordan and a team from the Guyana Rice Development Board (GRDB) visited Caracas on the 15th Meeting of the Energy Ministerial Council of PetroCaribe, but never spoke to the Venezuelans directly and rather depended on “hints” from our Ambassador that the Venezuelans would not renew the contract. The Guyanese Agriculture Minister, however, by mid July admitted that Venezuela had never actually halted rice and paddy shipments, but simply had requested that the speeded up schedule by Guyana should be moderated for logistical reasons.

It was clear that there was no direct intervention by the Guyanese authorities in charge of our rice industry to make direct contact with the Venezuelans about the present contract and negotiating a possible future one for 2016. But from facts now gleaned, we can now see that Venezuela was not taking the increased tensions lightly. In addition to opening up negotiations with Suriname for a PetroCaribe rice/paddy deal – and clinching it by August – they started to purchase massive amounts of rice from the US.

The US has made no secret of its displeasure with the socialist Government of Hugo Chávez and his successor Maduro, and it is documented that it has supported the Opposition in various efforts to effectuate “regime change”. But through all of those actions, the US has worked assiduously to ensure that its economic interests in Venezuelan trade – oil, rice etc – were kept intact. In August and September while our Government refused to engage the Venezuelans in talks to keep the market that was giving us a US$200 premium for every tonne shipped, the US slipped in and delivered 150,000 tonnes of rice.

This newspaper believes that it is time that the Administration stop playing political football with rice, which had been one of the few bright spots on our economic horizon.