The cash-strapped Wallenford and Mavis Bank coffee companies, producers of the prestigious Blue Mountain brand, are being packaged for divestment, Agriculture Minister Dr Christopher Tufton confirmed yesterday.

The decision, Tufton said, was influenced by the Government’s belief that the state should regulate rather than operate businesses.

“We believe that the Government should be in the business of the regulatory element of the industry, which is the Coffee Industry Board,” said Tufton. “Our view is that the Government should really be a regulator to ensure that standards are maintained, but we really shouldn’t be involved in the commercial aspects of the industry.”

He said he had met with the Development Bank of Jamaica (DBJ) and they have set up a divestment committee to package Wallenford for divestment to private interests very shortly.

“The Development Bank of Jamaica is doing the same thing for Mavis Bank, which is substantially owned by the bank because of debts,” he added.

He said that the DBJ, which holds a 70 per cent stake in Mavis Bank, wants to recover the money owed to it by the company, and is in the final stages of packaging it for divestment.

Divestment of both entities appeared to be where the previous Government was headed several years ago when it separated Wallenford from the CIB, but nothing else happened.

Contacted yesterday, managing director of Mavis Bank, Senator Norman Grant, said that he would not comment on the matter at this time. However, he assured the coffee farmers that the company will continue to buy berries during the current crop.

“All I want to say now is that we will continue to buy coffee for the 2008/2009 crop. We have a quota to fill,” said Grant.

Coffee has been hit badly by a number of hurricanes and tropical storms over the past four years.

The 2005/2006 figures for Wallenford showed a loss of $47 million, which grew to $56 million by 2006/2007. While income grew from $604 million to $830 million between both years, the cost of sales and direct expenses also grew from $424 million to $521 million and administrative expenses jumped from $138 million to $312 million.

Senator Grant confirmed that there was a 45 per cent crop destruction in 2007, resulting in a drop in production from a projected five million pounds to 2.6 million pounds. The projection was upped to 4.1 million pounds this crop, but already some 400,000 pounds have been lost to Tropical Storm Gustav which hit sections of the island in August. Losses attributed to Gustav have totalled over $100 million.

Jamaica exported some 16,200 tons of Blue Mountain Coffee last year. Wallenford and Mavis Bank account for nearly 50 per cent of those exports.

Local coffee farmers have been concerned about a recent drop in sales after Wallenford stopped buying beans.

Although this has been described as a temporary setback, it comes in the midst of a global financial crisis which has lowered prices of raw material exports and slashed income at commodity exporting companies across the region.