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Rivera Schatz Says Local Rice is Bad Business

By on October 3, 2016

SAN JUAN—New Progressive Party (NPP) Sen. Thomas Rivera Schatz revealed data on Monday that, according to him, confirms the economic failure of the rice-growing project that Gov. Alejandro Garcia Padilla delegated to the then Secretary of State, David Bernier, in 2013. According to the legislator, the project has resulted in a multimillion-dollar loss to Puerto Rico in the midst of an economic crisis.

NPP Vice President Thomas Rivera Schatz

NPP Sen. Thomas Rivera Schatz

Rivera Schatz said that the actual production cost to the government is $8.20 per pound, while most consumer brands in the island have an average price of 42 cents per pound.

“This rice, which we might call ‘rice Bernier,’ has become the most expensive in the world, with an appearance, texture and flavor that is very different to the Puerto Rican palate, so its retail sales are almost nonexistent despite the government’s huge subsidies,” the senator said.

Rivera Schatz said that Bernier had labeled the project as the spearhead of the current administration’s economic development strategy, as it would create jobs on the island. The pilot project started with 63 acres dedicated to rice production in the Lajas Valley at a cost of $ 1.6 million, with the final product destined for the commercial market.

The project, said the senator, who is seeking reelection in the upcoming elections, was later extended to a total of 439 acres in Guánica and Sabana Grande with a public investment that exceeded $ 11 million, although he added that its cost is estimated as being much higher.

Rivera Schatz also condemned the lack of public information provided by the Department of Agriculture and the Land Authority, which are the government agencies in charge of managing the project, regarding its costs and losses.

The NPP legislator gave a breakdown of the retail price of rice produced with government sponsorship and other brand prices generally consumed in the local market. Rice from other brands and with high demand have an average price to consumers of 42 cents per pound. “Rice Bernier” on the other hand, has a retail price of $ 1.49 retail average per pound, which triples the average cost of commercial rice.

The senator also said that the situation reaches “shocking levels” when considering that the real costs of production and processing, according to data available from the Department of Agriculture dating from 2014, was $ 8.20 per pound, this despite the fact that “Bernier rice” is sold retail at an average of $ 1.49 per pound.

However, a Caribbean Business source explained that Rivera Schatz’s calculations on rice includes initial costs of soil treatment, which are non-recurring costs. The source explained that the first generations of the harvest are always more expensive and, therefore, the comparison is not legitimate.

“He has gone out with those numbers because they represent the initial investment, which the Secretary of Agriculture has indicated to the press, and which included cleaning and preparing the land,” said the source who asked not to be identified.

Late last August, Gov. Alejandro Garcia Padilla, accompanied by the head of the Department of Agriculture, Myrna Comas, announced that brown rice began to be sold at a local supermarket at $ 1.79 cents a pound, but admitted at the time that the distributor, and not the Department of Agriculture, would profit from the sale.

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