Ja poultry farmers object to proposed CET reduction to 20% on imported chicken

Friday, July 15, 2011    

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SCORES of contract poultry farmers have voted unanimously to draft a petition for dispatch to the Ministry of Agriculture & Fisheries, expressing concern about a recommendation from the Ministry of Finance & the Public Service for the Common External Tariff (CET) on imported chicken to be reduced to 20 per cent.

At a recent meeting of the farmers, held at Bodles in St Catherine, they expressed apprehension regarding the proposed tax reform measure as outlined in Green Paper No 1-2011, titled Tax Reform for Jamaica, which sees the Ministry of Finance and the Public Service seeking to introduce the drastically reduced CET on imported chicken as part of an overall proposal to "simplify" the tax system in Jamaica.

The farmers were adamant that such a move would cause devastation to the poultry industry, which has seen private sector investment of hundreds of billions of Jamaican dollars, with a single farmer investing as much as $250 million.

Additionally, the exposure to lending institutions for farm operations alone now stands well in excess of J$10 billion, in addition to major loss that could be incurred by other major stakeholders.

In fact, representatives of the Development Bank of Jamaica and the People's Co-operative Bank who addressed the farmers at the meeting said they were concerned that lower production levels in the poultry industry would impact loan repayment plans.

A returning resident farmer who was also in attendance - and who, approximately 10 years ago, injected J$30 million into setting up his poultry operations with a capacity of 48,000 birds each cycle - said the proposal of a 20 per cent CET on imported chicken would open the floodgate to the importation of cheap chicken meat. This, he said, would destroy local chicken production both from a commercial standpoint and at the level of small farmers.

In making reference to the demise of the dairy industry, another farmer said the poultry farmers should not sit idly by and allow what took place in that industry to happen to the poultry industry.

"Half of the national dairy herd was slaughtered, as the demand for cow's milk decreased when imported milk powder flooded the market. So if the 20 per cent CET on imported chicken comes into effect we will have to immediately close down some of our chicken houses which, if abandoned for more than six months, cannot be used again. That means we would all lose our livelihood. So I am encouraging you to speak up now!" he said.

Another farmer said poultry producers have to be willing and ready to use every avenue to let their voices be heard publicly on the CET issue and suggested that, if necessary, they should be prepared to walk to Jamaica House to have audience with the prime minister on the matter.

In giving an overview of the way in which the poultry industry has advanced over the past five decades, another farmer said that the poultry-producing sector was among the first to introduce technology to chicken rearing in order to achieve greater efficiency - investing in tunnel-ventilated chicken houses in place of traditional coops. As a result, he expressed serious disquiet that the proposed reduced CET would put farmers who had made such major capital input in the industry at a disadvantage, when compared with importers of chicken parts which are discarded by the US market.

The farmers' petition to the Ministry of Agriculture & Fisheries is to be accompanied by signatures of the poultry producers who are seeking to update the ministry on the negative and far-reaching implications that the proposed 20 per cent CET rate on imported chicken could have on the island's chicken production and the possible dislocation of many thousands employed in the commercial poultry rearing, haulage business and processing aspects of the industry.



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