Rice: it is the staple on Belizean dinner tables, and for proof of that you can look at the numbers: Belizeans consume 1.3 million pounds of rice a month. But in the coming days there could be problems with this commodity, specifically who supplies the rice that will go on your table. That's because a rift is developing in the rice industry. It's not over supply (there's more than enough of that) but there's a battle for control of who supplies the rice that ends up to your plate. This weekend Alfonso Noble traveled to Blue Creek to find out what's happening in the rice industry that may affect the next serving of rice you have.
Alfonso Noble Reporting,
This year the Orange Walk District is expected to produce 80% of the rice that will be consumed in Belize. As it is, somewhere between 10 to 12 million pounds of the grain are being harvested and stored. While in years past, all this rice would have been sold by individual farmers subjecting them to at times undersell one another. This year things are different, the 4 largest producers have come together to form the Belize Food Supply Company and it's all about economics.
Edward Reimer, Chairman Belize Food Supply Company
"Its economic pressure. Over the past 2 years the cost of production has gone up roughly 30% and because of that we've had to find a different way of making a bigger portion of the value or the price of rice for the producers."
Peter Dyck,
"People were saying that efficiency needed to be improved in the distribution of rice, not only to the general public, but there was a price gap that the farmers were not getting that was taken in by the middle man which was a large portion (compared) to any other product that's being sold on the market as a food commodity. That was one reason why we decided to form a company to get back part of that money gap that we're missing because our production costs have gone up drastically over the last couple years due to high fuel prices plus there's new taxes that have been added on to our new crop. We haven't paid any new taxes but those are things that are in the coming and we think we have to get an increase in taxes to make up for that, in order to survive."
Edward Reimer,
"Over the past two years we supplied rice to the Belize Marketing Board and we were paid 57 cents for a pound; this would include all the production costs, the milling and the transportation. In June of last year, by arrangement through Minister (Servulo) Baeza and Price Control we were given 65 cents. But unfortunately, the 65 cents is still 10 cents short of the cost of production we experience right now in Belize. We are right now going to market our rice at 72 cents wholesale so its another 7 cents up from the price we are getting now and we think that this will be a step that, at least, will make us closer to the break even point. Over the past 2 years we have lost over 30% of our farmers because it's all the smaller farmers that are growing anywhere between 200 and 300 acres of rice that can't meet their notes again. They are turning over their farms; they can't make their payments to loans and so forth. Somewhat to do with the drought but also simply the cost of everything has gone up: the fuel has gone up tremendously, fertilizer has followed it almost directly, some of the things that went up were the taxes that went up in great proportion and all of these things added to together to make it almost impossible for a producer to make it."
Peter Dyck,
"Ultimately in a very short period of time we won't have any farmers in this country, rice would have to be imported."
Edward Reimer,
"We feel that by coming together we're going to be stronger and be able to better finance some of the needs that we have like finding a better way of doing things."
While they look at better ways of doing things, these producers say it will mean they have to branch out into becoming wholesalers for the product they produce.
Carlos Moreno, Managing Director Belize Food Supply Company Limited
"We can say that rice industry operates under an environment of price control, it operates under high input costs and services costs which have been increasing every year and also we have to be competing with the illegally imported rice from across our borders and very little technical assistance. See in this the four major suppliers decided to come together and try to resolve the main issues that are affecting the industry."
Edward Reimer,
"The company is planning mainly to package and market the rice. We're going to do our own packaging and we're going to be doing a lot of our distributions. This is to get into some of the money that is there, up to 85 cents which is the controlled price for rice in Belize. The overall objective is for the rice industry to grow, to export rice to our neighbor, we could Guatemala especially under this Partial Scope Agreement, if we can get our cost of production lower and this is the overall goal because we always limited by the scale of production by the amount of scale in Belize which is limited to our population. So our goal is to grow and to become more efficient to able to meet the export markets for foreign exchange and still continue to supply Belize with the full amount of rice that consumers need here."
Peter Dyck,
"We have some people in the Ministry of Agriculture stating food security is a great importance to this government. We support that 100%. We believe food security needs come from within the country itself and not rely on importation. Importation does a number of things that are detrimental to the economy: they take away taxes, they take away foreign exchange, they take away jobs, and you can name it, it just keeps on; importation is the wrong direction."
And while that may be the wrong direction, it is something that seems to be very much on the horizon. As the producers try to increase their margins from their product they are being met by some obstacles. The Supplies Control Act stipulates that authorization for wholesaling of rice needs ministerial approval, approval that will go against the existing distribution structure where the Belize Marketing Development Corporation formerly known as the Marketing Board, is the sole entity authorized to wholesale rice.
Carlos Moreno,
"We are being asked that we need to sell all the rice to Marketing Board and they can be the only distributor in the country but that is not where we want to go. We need to go to a position where we can get a higher income or a higher level of the markup that the wholesalers or the middlemen are doing so that the producers can get this difference. Its come to a point where for the past two or three weeks producers of rice have not been able to sell any rice because they have stopped Marketing Board on an agreement that was signed with Marketing Board before. We are afraid that in the next few days, if this issue is not resolved, there might be a shortage of rice in the market although producers have a huge amount of rice in stock. Our company is not there to gouge on no prices, they set price control for rice so there is no way that the price of rice can go up for consumers. It's only a way of getting a better come for the producers who have to wait 1 ½ to 2 years to get back the money that they invest in the rice field and the middlemen who don't have to go through this risk get back their money in a week or two. It's just a way of trying to improve the marketing strategy that the rice producers have at this time. 80% of the crop of rice that's being produced currently is being produced by these four big producers so they want to have control of their product."
Control that won't be won without a battle that has as much to do with the realities of the global, deregulated marketplace as it has to do with what's for lunch.
