Gov’t making interventions to cushion spiralling food prices
-President outlines some measures at press conference
Georgetown, GINA, April 16, 2008
The Government of Guyana has been monitoring the spiralling increase in food prices around the world and in Guyana and has been making a number of interventions to cushion the effects of the food crisis on Guyanese.
This is according to Head of State Bharrat Jagdeo who outlined some of the measures and upcoming plans during a press conference he hosted at the Office of the President yesterday.
Pointing out that the crisis is a global phenomenon, the President noted that the World Bank’s President has been discussing the problem with the Managing Director of the International Monetary Fund (IMF) and United States President, George W. Bush has also released US $200M for aid agencies that supply food to some parts of the world.
“These agencies are themselves requesting US $600M because of the movement in prices. Some countries have prohibited exports. China, India, these are the two largest producers of the world but they have prohibited exports, especially (India) of some basmati rice. They still export but they have fixed a very high price-US$1200 per tonne, so that, hopefully, will discourage exports,” the Head of State said.
President Jagdeo related that with Thailand being the largest exporter in the world and Vietnam the second largest, Vietnam’s restriction on exports has resulted in a number of countries being short on food supplies. Egypt, Turkey, the Philippines and Bangladesh were listed as some of the countries which are without adequate supplies since they were importing from other countries. In the Caribbean, Trinidad and Tobago also suffered a flour shortage a few weeks ago and this resulted in riots. The situation was worse in Haiti where riots escalated and resulted in a few deaths, as well as citizens calling for the resignation of some in authority.
“There will be two factors: some countries will not have food because they can’t find supplies to import, and some countries will have difficulty finding the food even when they have the money, and all the countries will face rising prices. Someone said here too in Guyana it will be the same,” the President underscored.
He noted that he has been asked why is the price of rice increasing when the commodity is home grown.
“Because the price that someone can get now has moved from the US$200-odd per tonne to now close to US $700 per tonne. So if they can get that in the export market and this is not state-owned, these are privately owned farms, then if they are going to sell the rice here, they will not continue to sell it at US$225 per tonne but at the US$700 per tonne,” President Jagdeo explained.
He added that whilst supplies of the commodity may be guaranteed, citizens may be faced with rising prices. He noted that the situation would be the same with flour, except that it will be a bit more challenging.
“I think by now most people know the reasons: there are four major factors – the drought affecting some countries, the increased demand in the growing, emerging economies of the world, India and China especially, its people eat more, more meat and the conversion factor of grain to meat is seven kilogrammes of grain to one kilogramme of meat, then we have the movement away from production for food to production of grains for ethanol and then of course the rising cost. We have to factor all of these things,” the President said.
In this light, the President pointed to the measures being taken by his administration to cushion some of the effects of the rising prices.
He noted that Government has been standing much of the overhead cost of the Guyana Power and Light (GPL) keep prices from increasing, especially in relation to oil prices. As such, he pointed to the price of crude oil. Today, the price is almost US 115 per barrel.
“And we import refined oil, so we don’t import crude so you have to add another $30 or $40 to that because that is refined oil we import, so we have cushioned the impact. We took greater tariff increases for the Gov’t agencies and for the public and we have put quite a bit of money into the company itself,” President Jagdeo said.
Government has also invested much in the water sector, according to the President, with the Guyana Water Incorporated (GWI) unable to cover 50 % of its cost and Government investing billions to prevent water rates from constantly increasing.
Switching gradually from the use of diesel (which is more costly) for some generators to heavy fuel oil is another measure being taken by the Government.
“We are buying a unit from Suriname, we are converting a unit at Canefield, from diesel to heavy fuel oil and that will cost about US$1.4M. We are buying about 20-odd megawatts of power which is badly needed so that we can replace some other sets that will cost about US$27M,” the President outlined.
Government is also spending about US$1.9 M to build the transmission main at Skeldon in order for power to be generated through the burning of bagasse.
“I had discussions with the people who have been working on the Amaila Falls. Their licence should have come to an end this month and I made it clear to them that because they have been working on this for a long time that I am not prepared to extend their licence much longer unless they come up with some firm indicators that they have done quite a bit of work over the past six months and they have assured me that by the time I would have extended their licence to September,” he said.
He added that by the time the team meets with Government in September they would have gone out to tender and they would have had a firm indication as to what the prices would be for constructing both the hydropower and the transmission main.
“Because, ultimately, that will bring cheaper power to the country. It’s got to happen now.”
In other efforts to cushion the effects of rising prices, Government recently removed all taxes from diesel. Government teams are currently in the process of meeting with residents of various communities to discuss the issue of rising food prices and to listen to recommendations.
Already, $100M was set aside in the budget this year to assist single parent households
President Jagdeo posited that Guyanese, unlike citizens in other countries are blessed since the country has abundant land and water resources.
“We can grow food unlike so many other countries.”
With this in mind, the administration will shortly embark on distributing seed materials to households and planting materials for Amerindian communities.
“I don’t want to say that everyone should become a farmer because not everyone is cut out for that, but when the economics are right you can do anything,” he concluded.
Guyana will be hosting a major agriculture investment conference in June which will see bankers, agriculture entrepreneurs and Government officials from the Region meeting to take the matter to another level.
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Spain’s Ambassador presents credentials to President Jagdeo
Georgetown, GINA, April 16, 2008
The Kingdom of Spain’s interest in the Caribbean Community (CARICOM) has been increasing and the country has just established a second embassy in the region in Trinidad and Tobago.
This is according to that country’s Ambassador to Guyana, His Excellency Fernando de la Serna who presented his credentials to President Bharrat Jagdeo at the Office of the President today.
The Ambassador said previously Spain had only one permanent mission in the region and this was situated in Jamaica. He feels that cooperation between Guyana and Spain will now be enhanced with the second Embassy established in closer jurisdiction to Guyana.
“There have been already three meetings between Spain and CARICOM at the level of the Heads of Government,” he noted, adding that the meetings were held in 1999 in Port of Spain and in 2002 and 2006 in Spain.
The Ambassador used today’s opportunity to invite President Jagdeo to attend another meeting as such that will involve CARICOM Heads and the Prime Minister of Spain.
“This is in the context of our increasing interest in the CARICOM region. We have an agreement of cooperation with CARICOM and we hope in that context to start a project now at the national level in Guyana. It will start next year,” Ambassador de la Serna posited.
The Ambassador acknowledged that much more needs to be done to enhance cooperation and promised that this will be done in the upcoming years during his tenure.
Spain will be focusing on development projects in the areas of training, food and agriculture, health, tourism and industry.
The country is also interested in promoting Spanish at the level of the University of Guyana.
The Ambassador, who possesses a law degree from the University of Madrid, will be based in Trinidad and Tobago.
He has served as Ambassador to a number of other CARICOM territories including Jamaica, The Bahamas, Antigua and Barbuda, St. Lucia, Dominica and Grenada.
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