Import licenses for chicken

Oct 07, 2016 Features / Columnists, Peeping Tom

Guyana has the pens and the poultry supplies to be self-sufficient throughout the year in chicken. Guyana is generally self–sufficient in chick all year round.
The chicken price is relatively high, averaging around US$2 per pound in the supermarkets for ‘cut chicken. The price spikes at Christmas, not because there is a shortage, but because the chicken retailers make a killing despite there being sufficient chicken to keep prices at the $400 per lb. level all year round.
Chicken imports are usually allowed in December because the high price charged by retailers creates space for competition from imports. Those who are lucky to get license are able to make a great deal of money because they can import millions of pounds chicken and make a lot of money on its sale in the narrow window from December to January.
The high price of chicken encourages imports at Christmas when demand peaks. It also encourages smuggling of chicken which is now intensifying in border areas.
Guyana’s chicken is not competitive because of the high price of feed. Guyana would have no need to even consider importing chicken if something could have been done to reduce the cost of feed since the cost of production would have been able to be kept low enough to outcompete imported chicken. As things stand at present, even with the high tariffs, chicken from the USA can match the US$ 2 per lb. and this explains why some persons have seen a fortune in securing import licences for chicken.
If you obtain a licence in December for two million pounds of chicken, you can safely clear, after all expenses, $40 per lb. This means that an importer of one million pounds of chicken can make as much as $80 million dollars in one week in December since this is all the time it will take to sell one million pounds of chicken.
If you can get a licence for 4 million pounds then you can make $160 million dollars in one week alone. There is no company in Guyana which makes that kind of money.
The problem is that even though imported chicken has a market in December in Guyana of about six million pounds, not anyone can obtain a licence to import chicken. Not everyone can obtain a licence but whoever obtains the licence is set for life financially.
The PPPC did recognize the need for greater transparency in chicken imports. The party invited applications . There was therefore a process in which interested persons could have applied. Whether or not the persons who did get the licences under the PPP should have gotten the licences is another matter because even though the PPPC invited expressions of interests, it is not clear to what extent they verified that all those who got the licences had the facilities to store the chicken when it is imported.
The APNU+AFC government is being accused of giving out licences without a system of tendering as what existed under the PPPC. The Ministry of Business needs to explain whether this is so and why if it is so that it did not prequalify importers of chicken. It also needs to explain whether those granted licences have the facilities to store the chicken and how it is the Ministry determined the individual quotas.
The APNU+AFC coalition promised greater transparency. The government has to avoid being accused to handing out import licences to its friends and associates. The Ministry of Business should debunk this suggestion by providing the facts as to whether licences for the importation of chicken have been granted, who got what and what was the process involved. This will settle the controversy, once and for all.
Import licenses for chicken should be auctioned in blocks of one million pounds and upwards. The base price for a licence at the auction should be $40 per pound of chicken. The money earned from the auction of the licences should be ploughed into research into developing cheap poultry feed.

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