KINGSTON, Jamaica – The following is full text of a news release issued recently by the Jamaica Agricultural Commodities Regulatory Authority (JACRA). 

The JACRA text is as follows

“The socio-economic impact of THE COVID-19 pandemic on the otherwise fragile coffee industry, as well as persistent calls from sections of the private sector for a corresponding reduction of the cess on imported coffee as applied to the exported product are among the issues targeted by the Jamaica Agricultural Commodities Regulatory Authority (JACRA) for speedy resolution.

Following the implementation of the 50 per cent reduction of the cess on coffee exports, Salada Jamaica Foods Limited with support from the Jamaica Manufacturers’ Association (JMAEA) has been making a case for a 50 per cent reduction of the cess on coffee imports.

Chairman of JACRA, Dennis Boothe advises that the reduction, if granted could have long term implications for the viability of the local coffee industry.

 “If implemented, the reduction of the cess on coffee imports would result in JACRA forgoing a further $73 million ($47 million to Salada and $26 million to Nestle) in addition to the $114 million of reduced local fees and export charges granted to the coffee producers, as of April 1, 2020,” he stated.

Currently, a cess of US$1.41 per kilogramme is payable by all importers of green beans, while imports of instant coffee, including the bulk product, attract a cess of US$2.40 per Kilogram of the green coffee bean equivalent

Salada was granted temporary concessions (from January 2018 to the end of December 2019) for the use only 10% local coffee beans (instead of the 30% requirement as stipulated by the JACRA Act 2017) in the production of instant coffee. This relief was in support of the company’s ability to compete in the domestic market and should have contributed significantly to the profitability of the company.

This facility was subject to a review at the end of that period.

The reduced cess on coffee exports and local charges was promulgated by the Ministry of Finance and Planning as well as the Ministry of Industry, Commerce, Agriculture and Fisheries as “part of the Government’s stimulus package” to boost agro-industry and value-added agricultural exports.

The measures received widespread endorsements from some industry stakeholders including farmers, processors and exporters.

However, while welcoming the new measures, the Jamaica Manufacturers and Exporters Association, (JMEA) stated that although the reduction in export fees will have a meaningful impact, the Government should consider reducing the import cess on all raw materials for products proven to be manufactured exclusively for the export markets.

Salada, a member of the JMEA involved in the production of instant coffee has been persistent in its call for a corresponding reduction of the cess granted to coffee exporters. The company argues that import charges and the JACRA cess on raw materials, result in higher raw materials cost comparable to processors outside of Jamaica, thereby negatively impacting the competitiveness of Jamaica’s exports.

JACRA’s record of Salada’s coffee business over the past three years (2017 – 2019) indicates that the local content of the company’s instant coffee production has been miniscule.

For instance, in 2019, Salada imported some 332,900 kg of green coffee beans coffee while exporting the green bean equivalent of 177,300 kg of which the local content was only 17, 700. It would therefore appear that all the coffee imported is not being utilized in the manufacture of coffee products for export the export market. This is evident in the display of Salada coffee products in supermarkets and other commercial outlets across Jamaica. 

Other key stakeholders including local processors, exporters and coffee farmers are adamant that a 50 per cent reduction of the cess on coffee imports would depress local coffee prices, damage the internationally aclaimed Jamaican coffee brands, drive thousands of coffee farmers out of business and literally “snuff the little life left in the local coffee industry.”