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Let’s reduce food prices
Chickens feed in a coop
Columns, The Agenda
September 1, 2024

Let’s reduce food prices

Food in Jamaica is expensive. No one can deny that. Jamaicans pay some of the highest food prices in the world, and it doesn’t matter where you shop, what time of day, or what time of year. For many Jamaicans, it is a daily struggle to buy food.

The mistake we often make is that our lifestyles operate similarly. That is, at the end of every month, everyone goes and buys their groceries like clockwork.

This way of thinking is the wrong mindset. Most families in Jamaica live hand to mouth and cannot afford that lifestyle. However, this reality is not new. Although the COVID-19 pandemic magnified it, and even though the pandemic has passed, this piercing struggle has not.

What is worse is that post-COVID brought inflation. Since most of our food, the inputs, and raw materials of agriculture and food manufacturers are all imported, the food prices have increased even more despite global commodity pricing coming down.

If you recall, the novel coronavirus pandemic intensified the burdens for many who were finding it difficult to make ends meet. Two months after the pandemic began, 62 per cent of Jamaican households reported earnings below the minimum wage. Low-income families and women were the hardest hit, with 59 per cent and 53 per cent losing employment, respectively.

Most of these households depended then, and still, on sparse savings, remittances, and various high-interest monthly loans, while others lacked any other source of income whatsoever.

For households that relied on savings, 50 per cent said their savings could only last two weeks, 30 per cent said they could only last one week, and 18 per cent for one day. Consequently, many children in these living situations experience them and continue to face daily food shortages. Often, a mother can only give one meal daily and pray that this child gets lunch at school.

Some 47 per cent reside in rural areas, reported Caribbean Policy Research Institute, March 2021.

Most of our food consumption is imported, including simple daily meals — like rice, chicken neck and back, kidney, liver, and mixed vegetables — which is how many families must feed themselves based on the cost of a whole chicken or other forms of proteins like fish.

As a result, any movement in the exchange rate increases the cost of these items. Therefore, individuals with fixed incomes will have to consume less when item prices go up, as it is improbable that what they earn will go up proportionally.

Added to these high food costs are the increased transportation, electricity, and water charges by Jamaica Public Service and the National Water Commission.

I spoke to several minimum wage earners (that is, $60,000 monthly) and they told me they shop every fortnight when they get paid and spend a budget of $8,000 or $16,000 monthly. They only buy the essentials — bread, oil, rice, flour, sugar, chicken back, salt and tin mackerel, tea and cocoa, cornmeal, ground provisions, and sardines, tin or frozen mixed vegetables. They don’t buy fruit as that is too expensive. Neither do they eat chicken every day; that is saved for a Sunday, which is reserved for chicken parts. Many Jamaicans cannot afford certain protein, especially chicken.

US$23 million in chicken neck and back is what we import annually to Jamaica, close to US$13 million in beef offals, beef trimmings US$16 million, and rice US$84 million. Is there any wonder, then, why so many are unhealthy and battling obesity, high blood pressure, and other primary health ailments. They cannot afford to buy a balanced food basket because the cost of chicken is out of their reach.

We cannot expect to govern a nation sustainably where people are hungry, malnourished, and unhealthy due to high food prices. This way of life is anti-developmental, regardless of how much we say our macroeconomic indicators and net foreign reserves are the strongest-ever.

Something has to give. We must find a way to reduce the cost of food to consumers now.

Here in Jamaica, the General Consumption Tax (GCT) Act, June 2012 lists the following basic food items as GCT-exempt in its schedule:

 

“6) Raw foodstuff that is locally produced and raw foodstuff that is imported (in relation to its supply to the Jamaican market, but not in relation to its importation into Jamaica), that is to say:

(a) fresh fruit and vegetables, excluding imported apples, pears, quinces, apricots, cherries, peaches, nectarines, plums, sloes, berries, grapes, and kiwis;

(b) ground provisions;

(c) legumes;

(d) onions and garlic;

(e) meat;

(f) chicken;

(g) fish, crustacean or mollusc;

(h) corn…

 

6B) Raw foodstuff imported from Caricom

7). Milk, liquid and powered whole

8) Cornmeal and cereal flour, known as counter flour

8) (A) Soya meal

8) (B) Wheat…

 

11) Canned sardines, herrings and mackerel

12) Infant formulae

13) Bread, bulla, water crackers… (water crackers means small dry bakery products made only of bleached flour, with or without leaving or shortening and salted or unsalted, the weight of which contains not more than 10 per cent sugar and without flavouring, coating or topping verified by the Bureau of Standards)

14) Rice

15) Sugar (Brown)…

 

17) Salt…

 

21) Baking flour packaged in quantities of not less than 45.358 kilogrammes

22) Any locally supplied live bird, fish, crustacean, mollusc or any other animal of a kind generally used as or holding or producing food for human consumption and draught animals.

22A) Any locally supplied or imported live bird used as of yelling or producing food for human consumption, including baby chicken and fertile eggs for hatching…

23) Unprocessed agricultural produce, including produce for stock farming fresh water fish farming, forestry cultivation and horticulture supplied directly at the farm gate…

 

26) Cooking Oil…”

I would recommend we expand this list to more products consumed by minimum wage earners.

To improve someone’s standard, we can either pay them more or reduce their costs on food.

The Jamaica Broilers Group (JBG) benefits from a 260 per cent duty protection for its business. Globally, the average import duty rate on chicken in other countries is 24 per cent, so why must it be 260 per cent in Jamaica?

JBG, our largest chicken producer, made $6.1 billion in net profits this year — a 13 per cent improvement over the previous year. Its gross profit margin is 25.8 per cent (JBG Annual Report 2024), whereas Tyson Foods in the United States gross profit margin was 6 per cent for 2024.

Who is benefiting from record profits? Certainly not the Jamaican public in which many people find it hard to afford a whole chicken dinner daily. Certainly not the workers at the factory whose pay remains much the same. And, certainly not the Jamaican economy, as there has been little or no growth in our agricultural sector generally for years.

Our policies do not provide real competition in the marketplace. In fact there is no marketplace. We pay what JBG and CB Chicken decide we should pay.

Since it’s so obvious, you will wonder why this backward policy has continued.

Let’s reduce the duty on chicken to 50 per cent, which would still be twice the international norm, and use the duty collected to purchase baby chicks and distribute them free to small farmers, while eliminating the duty on feed and allow anyone to bring in container loads. The result would be significantly lower prices for chicken, more people engaged in raising chickens, and a healthy nation.

It’s time we level the playing field and break this food monopoly.

 

Lisa Hanna is Member of Parliament for St Ann South Eastern, People’s National Party spokesperson on foreign affairs and foreign trade, and a former Cabinet member.

 

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