The ‘ban’ on chicken imports

May 14, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – It was Karl Marx who said that the ruling ideas in very epoch are the ideas of the ruling class. To put another way: the ruling class determines the policies of the government.

Upon its return to office in 2020, the PPPC announced that it was going to zero rate the entire poultry industry. That announcement signified the tremendous influence which either existing or new players in the poultry industry were exercising on the government.

Many moons ago, Bharrat Jagdeo announced a special incentive regime for Linden. But who did this special incentive regime benefit? Go and do the homework! When he also announced a special regime for ICT, who did you feel benefitted from the scheme? Go and do the homework!

When the PPPC announced that it was going to zero-rate the poultry industry, who did you think this measure was intended to benefit: the small man with his fowl coop? Think again! This measure was announced at making Guyana self-sufficient in poultry.

This is a commendable objective. But who benefits?

 The price of plucked chicken, before the announced measure, was US$1 per lb. (plucked weight). The zero-rating should not have only increased production; it should have led to a decline in prices. The concessions granted to the poultry industry represent a direct subsidy to the industry. Today, however, plucked chicken is retailing at US$2 per lb. or twice the price before the subsidy.

Consumers therefore have suffered rather than benefitted since the subsidy. Part of the 100% increase would have been due to the increase in the imported price of fertilizers. But a 1o0% increase in the price of chicken is unjustified.

One week ago, On May 7^th, the Guyana Chronicle reported the Guyana Livestock Development Authority as saying that it would not be allowing the importation of poultry products because of sanitary and other reasons.  And chiming it, the Minister of Agriculture was quoted as saying that, “Normally we don’t import poultry and poultry products. We are self-sufficient; we have enough in the country. There are a number of areas and farmers, so we don’t have a ban but the GLDA is not giving permits because we have enough in the country.”

 The Minister was further quoted as saying, “We have to protect our farmers because we have sufficient [poultry] in the country. And I think that there is no need to import poultry product and poultry meats presently.”

 The Minister’s statement suggests that the restriction on the importation of chicken has little to do with animal and human health. The Minister’s statement suggests that the restriction, which amounts to a virtual ban, is a protective measure.

But who is being protected? The Minister says that it is to protect the farmers. But what about the consumers who are paying double the price for plucked chicken in the market?

Regional and international trade rules do not allow for the imposition of such protective trade restrictions. Guyana therefore will be in breach of both the World Trade Organization rules and the Revised Treaty of Chaguaramas if it imposes protective restrictions on the importation of chicken.

While Guyana is not known to import any poultry from the Caribbean this latest announcement will affect Guyana’s ability to press for the dismantling of non-tariff measures. President Irfaan Ali has made this a focal priority of his efforts to improve regional food security.  

He had promised to move aggressively to push for the dismantling of barriers to regional trade. This is what he said in 2021, “We cannot seriously speak of significantly denting the enormous and unsustainable regional food import bill yet, unwittingly or otherwise erect, and keep in place non-tariff barriers (NTBs), which impede regional trade in agriculture produce and products.”

On the one hand therefore, Guyana is pushing to have non-tariff barriers across the Caribbean removed. But, on the other hand, it is erecting its own non-tariff measures to trade.

The restrictions on the importation of chicken have grave implications for local consumers. Consumers are now at the mercy of our local poultry farmers. Imported chicken can provide competition for local farmers and this competition is healthy since it can help keep prices low

Farmers will not be at a disadvantage from imported chicken. The tariff on chicken is high enough to ensure that foreign imports do not undermine the local poultry sector.  But when you prohibit imports – as is now being done – local consumers are at the mercy of those who control and dominate the local poultry market.

 And as we have seen, despite the generous subsidies given to these farmers, the price of chicken has doubled. Now with no threat from imports, the price of chicken can well triple.  

If the government wants to protect consumers while at the same time limiting chicken imports, it can tie the subsidies it offers poultry farmers, to the retail price of chicken. In other words, the subsidy can be linked to the price at which chicken is sold.

But we know that the government will not do this. Because the government is controlled by the ruling economic classes.  

Disclaimer: The opinions expressed in this column are those of the author. They do not purport to reflect the opinions or views of Kaieteur News.

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• Bharrat Jagdeo announced, Chaguaramas, chicken, Go and do the homework, Organization, President Irfaan Ali

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