Fearing that a level playing field may not be created or that farmers could become marginalised in the local supply chain, lobby group Jamaica Agricultural Society (JAS) has expressed its displeasure with an upcoming move by Government to remove general consumption tax (GCT) on the import of raw food items.

“I’m not happy about the announcement as, in my view, we are not ready for such a move… by removing this cost it will make imported foods cheaper as it also put our farmers to greater competition on a playfield that is already not level,” said president of the JAS Lenworth Fulton in an interview with the Jamaica Observer.

“Before these announcements are made I would have expected the Ministry of Agriculture, or whomever, to consult the JAS, which has about 27 different farming organisations making up its board, but we did not get any invitation to participate in these discussions and therefore we reject it vehemently!” he told the Caribbean Business Report (CBR) on Wednesday.

Minister of Finance Dr Nigel Clarke in making the announcement during the opening of his budget presentation on Tuesday said that the measure through which Government is expected to forego on some $2.4 billion in revenues was in keeping with international trade agreements to which the country must adhere or otherwise face sanctions such as becoming blacklisted by the World Trade Organisation (WTO). Clarke said keeping the tax on imported raw food could be interpreted as government-sponsored protectionism which distorts competition and flies in the face of agreements the country has signed.

The measure, which is expected to take effect during the first quarter of the 2024/25 fiscal year, Clarke said however leaves room for Government to apply additional stamp duty on imported raw foodstuff.

The JAS head said that while he was not necessarily calling for a roll-back, as this may not fix the issue, consideration of some other priority areas may be worth exploring.

His hope is that with the removal of this tax, Government will at least increase the stamp duty to offer some balance for the farming community. Additionally, the removal of GCT on a number of other items including plant seeds, tools and equipment, as well as some other local food products such as eggs, he said should also better assist farmers in having fair competition, if they were to be implemented.

A St Catherine-based woman farmer Meleta Forbes-Bailey reacting to the upcoming measure regarded it as largely being unfair and one that would definitely impact small farmers like herself.

“This move is not fair to small farmers and it shows us that Government is not for the poor so while the rich become richer and the poor poorer, we continue to struggle as we fight for our livelihoods. Already challenged at times by a lack of market for our produce and a resultant glut and wastage, our local market, I believe, should be left for us,” she said, while pointing to losses incurred from this wastage further compounded by high cost for essential farm chemicals and tools.

“With such a move, what’s worse is that we will also have to compete with these imported items, much of which are often way below the quality of what we produce here. I think the minister therefore needs to wheel and come again on this one,” she stated.

Fulton in bemoaning what he said seems to be a blatant disregard for farmers, warned Government to be more careful about how it deals with the agricultural sector, one which he said stands as an important pillar of economic growth — contributing over eight per cent to Jamaica’s gross domestic product annually.

“I’m therefore calling on the Minister of Agriculture Floyd Green to have a meeting with us to discuss some of these issues among other long-standing ones around land and the implemetation of policies needed to move our sector forward,” he said, as he also urged the finance minister to provide better clarity on what exactly “raw food items” included.

“The language of the minister spoke to fresh foodstuff including fruits and vegetables, but does it also include chicken meat, pork, beef, eggs among other items?” he questioned.

Taking issue with how import licences are granted locally, he further called for a greater level of transparency in these processes.

According to local importer of raw fruits and vegetables Hugh Gentles, CEO of Glastonbury Purveyors Limited, he doesn’t believe the measure will result in farmers having a major problem in selling their produce.

“Jamaican consumers are fiercely loyal to Jamaican farmers and oftentimes are willing to pay a premium for local foodstuffs even when imported products are available for lower prices. In fact they only purchase imported raw foodstuff when local raw foodstuff is not available,” he told the
CBR.

Indicating that with much of the imported fruits and vegetables also largely attracting significant duties and additional stamp duties, these, he opined, should help to provide adequate tariff barriers that will protect local farmers.

“For example, carrots and cabbage have 250 per cent duties compounded plus 15 per cent GCT. So even if the 15 per cent GCT is removed significant tariff protection will remain in place. Other fruits and vegetable also have 100 per cent duties so removing the GCT on much of these items I think will not open the market to a flood of imports,” Gentles said.

“Any deleterious impact of this policy on farmers can be offset by improving support for production such as provision of irrigation systems, appropriate machinery, research and technology. This would make them more competitive,” he added, while further noting his support of the measure, which if not implemented, he believes, could have a devastating impact on agricultural trade.

The Jamaica Manufacturers and Exporters Association (JMEA), in also supporting the move, said it is necessary if Jamaica is to become compliant with WTO and General Agreement on Trade and Tariff (GATT) treaties.

JMEA Vice-President Kathryn Silvera, however, while agreeing that it could negatively impact farmers, called for Government through its agencies to heighten vigilance around imports.

“There certainly is a risk of this move hurting agriculture, poultry and fisheries; as such, there may be the need to have proper supervision of import licences and permits and perhaps even heavier fines and penalties for non-compliance,” she said as she pointed to a PwC revision of the decision which called for “caution to be exercised against any dumping of cheap subsidised imported produce” in the local market.