IN the wake of last week's announcement by Jamaica Broilers that it will hike the price of chicken meat by 10 per cent, Agriculture Minister Pearnel Charles Jr has announced that the Government is considering a temporary suspension of the common external tariff (CET) and additional stamp duties (ASD) on imported leg quarters.
Jamaica Broilers outlined that the pending chicken price hike is due to “continued cost increases across the entire operation, including corn, soy, and a lot of other raw materials”.
In Parliament on Tuesday, Charles outlined a raft of measures to help cauterise the situation, including suspension of duties on leg quarters to make poultry more affordable to consumers.
“Currently, the price of leg quarters within the local market is at $360 per pound, while we would be able to import leg quarters at $100 per pound and have consumers paying roughly $160 per pound,” he told Parliament.
In the last 12 months, the price of chicken meat supplied has increased by approximately 17 per cent, moving from an average of $530 per kilogramme to just under $620 per kilogramme currently.
At the prices outlined by Charles for leg quarters, if the duties were suspended, leg quarters will cost roughly half the price of whole chicken and locally produced leg quarters.
Charles told the Jamaica Observer that the announcement is to let consumers know the Government is monitoring the situation and will be ready to act. He, however, said he will be going into negotiations first with stakeholders in the poultry industry before making a final decision. But he stressed that the measure would be temporary “until the local market recalibrates to normal levels, where supply matches demand as was successfully done before when the country faced a similar crisis”.
The broiler companies currently produce approximately 60 per cent of total poultry, with the remaining being supplied by backyard farmers. But their operations have been severely impacted by the ongoing challenges caused by the novel coronavirus pandemic.
“The agriculture sector has not been spared the negative impacts of the COVID-19 pandemic, with pervasive logistics challenges within the global trade for commodities that have resulted in severe supply chain bottlenecks and delays,” Charles outlined to Parliament as part of background information for the proposed action.
He pointed out that these “supply chain disruptions are coupled with labour shortages, increased costs for transportation, packaging materials, grains, feed and, of course, baby chicks”.
“It is important to note, also, that roughly 75 per cent of the eggs used to provide baby chicks for the industry are imported, with Jamaica Broilers being the only broiler company with a local hatchery that produces approximately 40 per cent of their fertile egg needs. This situation has now resulted in individual and contract farmers finding it increasingly difficult to source baby chicks for both their broiler and layer operations,” Charles argued.
He told the Parliament that the situation is further compounded by the fact that there has been a decrease in the import of chicken back, which is a critical source of affordable protein, especially for people who have limited disposable income. “This shortage of supplies has resulted in the price for chicken back now competing with the whole chicken.”
Apart from proposing a reduction in the duties on leg quarters, Charles also told Parliament that he is actively seeking to find “more affordable market options for inputs, such as baby chicks and fertile eggs that can meet regulatory requirements and bring down the prices for our local farmers”.
He also said the Government is pursuing increased and efficient production of small ruminants, fish, and pigs to help diversify supplies of meat protein in Jamaica as a measure to help mitigate the increases consumers face.
Charles also called on interested investors to get involved in the production and supply of baby chicks and the growing of birds for the market alongside the two major suppliers, Jamaica Broilers and Caribbean Broilers.
He also outlined a $50-million programme that will help farmers to buy feed, chicks, and medicine, and promised to look at the issues which are affecting the price of fertilisers and driving up the cost of agricultural produce.