GEORGETOWN, Guyana, CMC – The Caribbean Community (CARICOM) Private Sector Organization (CPSO) Monday welcomed the weekend announcement by the Guyana government to remove the corporate income tax on income earned by commercial banks when giving loans to farmers in the poultry sector.
The initiative goes into effect as of Monday. CPSO said poultry meat is among the 19 agri-food opportunities highlighted in CARICOM’s initiative to reduce the food import bill by 25 percent by 2025.
“This initiative, announced by President Ali, properly addresses the critical issues of the ‘cost of finance’ and the ‘cost of feed,’ which have been two major concerns of farmers and processors in Guyana and across the Community,” the CPSO said, adding that measures to increase rice, corn, and soy production as critical inputs to poultry feed, were among the interventions announced by President Ali.
In his address on Saturday, President Ali said local commercial banks would lower their interest rates on loans for the poultry sector from eight to five percent.
The banks: Citizens Bank, Republic Bank, Demerara Bank, and the Guyana Bank for Trade and Industry (GBTI) have all agreed to this measure.
“All investments in the poultry sector will benefit from this… Reduced cost of financing will be available to the sector,” Ali said.
CPSO, an associate institution of CARICOM involved in the efforts to secure the full implementation of the CARICOM Single Market and Economy (CSME) that allows for the free movement of goods, skills, services, and labor, said based on analytical work it had undertaken, the CARICOM poultry industry can potentially displace extra-regional imports of poultry meat into CARICOM markets valued at US$149 million annually.
“Successful import displacement will require urgent domestic policy reforms, among other things, reducing the cost of capital and reliable access to feed at stable prices. Therefore, the initiatives announced by President Ali are concrete steps towards meeting these requirements,” CPSO said.
It said in addition to much-needed domestic policy support, “the most critical ‘policy shift’ that remains is for CARICOM member states to create or allow the emergence of a ‘genuine single regional market’ for poultry meat, that provides equal market access by all poultry meat producers to all CSME markets.”
CPSO said relative comparisons of the market access for poultry meat imports into CARICOM member states demonstrate wide variations in the Common External Tariff (CET) and market access.
According to the CPSO, such variations in the import market access among member states highlight the scope for the possible introduction of a CARICOM-wide Tariff Rate Quota (TRQ) regime, underpinned by a harmonized CET, the removal of remaining non-tariff barriers (NTBs), adherence to the CARICOM Poultry Standard and a CARICOM Sanitary and Phyto Sanitary (SPS) regime.
CPSO said that in its initial work under these conditions, if CARICOM members introduced a TRQ regime for poultry meat, intra-regional imports could substantially displace imports from extra-regional sources.
“The announcement by President Ali of interest rate reductions to poultry farmers and expansion in crop production as an adjunct to poultry feed positions Guyana and other CARICOM producers to potentially become ‘net exporters’ of poultry meat to CARICOM markets within the construct of a harmonized CARICOM single market for poultry meat. “
CPSO said that Guyana and Belize already maintain low levels of poultry meat imports.
“Having regard to the difficult food insecurity situation confronting 57 percent of CARICOM populations and the increasingly challenging global food supply situation, the CPSO praises the timeliness of the announcement by President Ali as an infusion of much-needed confidence to CARICOM agri-food systems.”
The CPSO said that in endorsing the significance of the announcement by, who has lead responsibility for Agriculture within the q uasi-CARICOM Cabinet, it recognizes the acceleration in the pace of extra-regional import displacement that could occur if other CARICOM member states introduce similar measures by their financial circumstances.
“The initiatives announced for Guyana can also spur closer collaboration and ‘scaling-up’ among the regional poultry industry, particularly Barbados, Belize, Guyana, Jamaica, and Trinidad and Tobago, among others,” the CPSO added.
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