Government should be commended for their response to rising food prices

Aug 17, 2011 Letters

Dear Editor,
It is commendable that the government of Guyana is keeping abreast with the changes in the global economic environment mainly the changes in food prices and food security. The Guyanese population will be at ease with the efforts our government is making to ensure both the consumers and producers are less adversely affected by the once again rising food prices.
It is important to understand that rising prices especially food prices are of great concern to many small developing countries whose open economies are vulnerable to high volatility in prices globally. The rise in food prices can benefit producers since they are earning more for their produce while consumers especially the poor feel the squeeze since their purchasing power is reduced.
In such cases, government intervention is necessary. Guyana has done and is doing a good job in addressing the issue of rising food prices and lack of food security. In 2008, Guyana introduced a relief package which provided a range of measures to cushion the effects of rising food prices. These measures include a 5 percent income supplementation for public service employees, and temporary cost-of- living adjustment of $4,000 monthly for public sector workers earning $50,000 and less per month; relief sales of items at pre-inflation prices to vulnerable communities; forms of tax relief including the exclusion of value added tax (VAT) on all essential food items; no excise tax on diesel; a reduced tax on gasoline; zero tax on kerosene and cooking gas; provision of planting and pest-control materials to encourage people to grow more food; a flour subsidy of $200 million to cushion price increases of flour and bread and subsidies to Guyana Power & Light and Guyana Water, Inc., to stem water and electricity rates’ increases; implementation of the ‘grow more food’ campaign; administration of the US$600 million READ project and the US$21.9 million ADE project, and finding new lands to step up food production in foods and other crops.
Guyana’ s economy is heavily dependent upon the export of six commodities – sugar, gold, bauxite, shrimp, timber, and rice which are highly susceptible to adverse weather conditions and fluctuations in commodity prices. Increases in prices for rice, sugar and shrimp for example will tend to lead to increase earnings for the producers and foreign exchange for the country. Consequently, this affects demand for those commodities by the Guyanese consumers because they have to purchase less or switch to a substitute. In the face of rising food prices again, government should continue to focus on examining and addressing issues that affect both supply of and demand for food in the economy within its agriculture developmental framework so that consumers will not lose and producers can gain.
Joseph Adams

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Government should be commended for their response to rising food prices

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