Retailers offer solutions amid rising food pricesSunday, May 30, 2021
BY KASEY WILLIAMS
MANDEVILLE, Manchester – The Jamaica Government is being urged by leading retailers to act in defence of the poorest consumers struggling to cope with soaring food prices.
Distortions in the international supply chain flowing from the ongoing novel coronavirus pandemic are being largely blamed for recent alarming increases in the prices of import-based products including food.
Wayne Chen, chairman of Super Plus Food Stores, wants more “targeted assistance” for poor Jamaicans through the Programme of Advancement Through Health and Education (PATH).
Chen suggested the use of a Government-issued swipe card which would allow people to access food and other necessary items such as medicines.
“What I have long advocated is a bolstering of the social security safety net and that would mean targeted assistance, most efficiently through PATH for those most needy in Jamaica,” he told the Jamaica Observer last week.
And Oral Lloyd, who heads the Intown chain of supermarkets, is urging a reduction in the General Consumption Tax (GCT) to ease the burden on consumers; as well as reduced taxes for food retailers.
“Nothing and no other time can be compared to these last 15 months, and people need all the help that they can get now…” said Lloyd.
Over the past year, sharp increases in the cost of imported commodities such as corn, soya bean, and wheat have escalated the price of basic off-shoot consumer items, including flour, bread and other grain-based products, in supermarkets and shops.
The price of animal-based products, including chicken meat, eggs, and pork, have also risen sharply following price hikes in animal feed which are largely corn and soy-based.
In 2020 the price of corn is said to have increased by 59 per cent, soybean meal increased by 54 per cent, while wheat went up by 39 per cent on the global market.
Other cost increases in freight as well as the continuing slide in the value of the Jamaica dollar against the world's hard currencies have also been factored in food price increases.
Chen said his recommended approach “… might well mean an expansion of the PATH programme to include more nutritional support, meaning more direct payments to poorer families, so they can buy more food”.
He is calling for the digitisation of social benefits for recipients of Government assistance.
“There are some efficiencies that [are] still to be gained in the system, so I believe that we have to accelerate the issuance of value-added cards [so] that recipients of Government assistance can swipe a card in a supermarket or pharmacy [to access] these benefits,” said Chen.
“We need to move away from cheques and remittances for people to pick up cash. We need to have that digital transformation of social benefits,” he added.
Chen also called for programmes aimed at boosting local food production.
“Given what we have seen happening in the pandemic, the Government is going to have to put in place programmes to boost local food production and enhanced food security. We have to find a way of reducing the price of local food and vegetables, not just to ease the consumer, but for healthy lifestyle,” he said.
“It has been hard, because Jamaica imports most of the basic commodities that poor people buy. Flour is imported; rice is imported; cooking oil, even what is manufactured here, is [made] from imported soy beans. Chicken is grown here but the chicken eats imported corn and soy beans. Cornmeal is imported,” said Chen.
“We are essentially at the mercy of world commodity prices. Prices are going up because in some ways the pandemic has affected the supply chain, it has affected the cost of shipping. It has in some areas impacted production and, ironically, as the world economy reopens, the demand for many of these products is rising, so we are really hit at a time when the prices are going up internationally, and there are no local substitutes of a lower price that we can quickly use to ameliorate that cost,” he explained.
Noting that the recent increases in the price of flour and flour-based products is “not the first way to go”, Lloyd said his tax relief approach would involve lowering GCT by up to three per cent.
The finance minister should also contemplate the possibility of also reducing taxes paid by “supermarkets and food-related businesses”, he added.
“All this with a view to pass on the savings to consumers in the system until more of the effects of the pandemic and the fallout from the increases in the price of flour can be normalised or absorbed into all layers of the system. Two increases in three months is the straw that is breaking the camel's back and in the midst of this pandemic, that's the very last thing that the local economy needs,” said Lloyd.