John Myers Jr, Business Reporter

Donovan Stewart, permanent secretary in the ministry of Agriculture says the $300m in cost for the rice plan

Jamaica, with the backing of private sector interests, will put 6,000 acres into rice production, a plan that calls for investments of about $300 million, possibly more.

The idea emerged this week in talks between the agriculture ministry and private players, notably Jamaica Broilers, whose interest is in finding alternatives to expensive imported grain used as raw material for feed production.

"It is going to be a private sector investment because we are not into the business of planting rice, but we will provide a certain amount of facilitation to the private providers subject to Cabinet approval," permanent secretary in the Ministry of Agriculture, Donovan Stanberry, told the Financial Gleaner on Wednesday.

The government's contribution is to be the land, most likely in areas where rice was previously grown - Meylersfield and Georges Plain, Westmoreland; St John's Road near Dovecot and the Hellshire hills in St Catherine; and the BRUMDEC property in St Elizabeth.

"The discussions are very preliminary, but we are definitely looking into the viability of re-growing rice locally," Agriculture Minister Dr Christopher Tufton said earlier this week.

Preliminary calculations

Stanberry said the exact cost of the project, which Tufton said the aim would be to produce enough to satisfy local consumption and as substitution for corn in the production of animal feed, has not yet been determined but preliminary calculations indicate at least $300 million would be needed.

The Jamaica Broilers Group, the island's largest commercial producer of chicken meat and a nascent ethanol business, has already committed $5 million as initial investment, but is willing to provide additional capital if the venture is viable.

"A lot depends on who the partners are, the outcome of the study and what kind of money you are talking about," senior vice-president of operations, Christopher Levy said on Wednesday.

He said the target at this time is to start producing between 5,000-6,000 acres of paddy.

Stanberry said another private entity has expressed interest, but declined to reveal the name at this time.

Levels of investment

"Both companies have decided, with the help of the ministry in a tripartite way, that we will sit and work out the entire cost in terms of the establishment cost, the operation cost so as to precisely decide what levels of investment we are talking about.

The permanent secretary said the extent of Government's input would be determined "once the numbers become clear."

Growing rice for local consumption and for substitution in animal feed production has become an attractive proposition with rice prices having risen 20 per cent so far on the international market and, based on current trends, is expected climb even higher.

A global shortage, the effects of which is already being felt in Jamaica, has compounded the situation, forcing many rice-producing countries to cease or limit exports.

Guyana's assistance

The agriculture minister said Guyana, the largest grower of rice in the region, has offered technical assistance and is expected to provide a report in two weeks on the feasibility of growing the crop here.

Stanberry said the Guyanese have been offering lands to grow rice to CARICOM countries and a few private sector interests here have expressed interest in the offer.

"The important thing is that there is a recognition that the time is opportune to substitute some amount of our imports with local production to satisfy our consumption needs and the private sector is willing to make the investment," said Stanberry.

john.myers@gleanerjm.com