VAT, duties hurting agriculture in Trinidad

The suppliers, many of whom keep the agriculture sector afloat, feel the VAT and duty imposed on farmers have been killing their business at a time when the Ministry of Food Production, Land and Marine Affairs is trying to establish food security and sovereignty. The call was made by several key local input suppliers at a recent meeting hosted by the T&T Agri-Business Association (TTABA’s) institutional manager Allister Glean in St Augustine.

In airing their concerns, the suppliers, comprising Tracmac Engineering, Oscar Francois Ltd, FT Farfan, Appropriate Technology, Carlsen Chemicals Ltd, Caribbean Chemicals and Agencies Ltd and Pharma-Vet Enterprises appealed for the duty and taxes to be lifted, stating that these are a big hindrance in wooing new and potential farmers to the sector. The suppliers argue that they also attribute to spiralling inflation. Roger John, general manager of Pharma-Vet Enterprises, importers and distributors of veterinary pharmaceuticals, biologicals and equipment said while the ministry is moving to take the agriculture sector forward, obstacles were the duties and VAT farmers are being required to meet on imported products, medication and equipment. With rising costs of oil, John explained, shipping costs have been skyrocketing weekly.

Prices beyond control

“Most shipping lines can’t give you a fixed rate. The prices of goods are beyond our control. Maintaining prices is what every customer wants.” John noted that while registered farmers can apply for duty-free concessions, unregistered farmers are faced with a 20 per cent duty on imported equipment and products. He feels the unregistered farmer should enjoy the concession as well.

Touching on the rabbit industry which recently started picking up steam because of the low cholesterol content and high production rates of the animal, John said for a farmer to start a small bunny business he would have to fork out between $20,000 and $40,000 in duties to get a farm up and running. “The point I am trying to make is that the money they would spend on duties can be easily put to other use. Right now farmers are sceptical to invest.”

Cost passed on to consumers

In addition to this, John said, this cost is eventually passed on to the consumer. “If Government could wipe out the duty and even VAT, it would assist. You would see a lot more people getting involved in farming. It will also reduce the cost of meats and local produce.” Other benefits to be gained if Government obliterates the duties and VAT are employment, increased export capabilities and downstream industries. John said at least 90 per cent of Tobago’s livestock farmers are involved in rabbitry since there is a fast turnover in business.

“We are not only talking about rabbitry alone, poultry is also another area being affected as well.” John said the taxes and duties have been a killer to the livestock sector. Fareed Rahaman, manager of Crop Protection and Professional Pest Control Division of Tracmac Engineering spoke about his company importing vital irrigation systems on which farmers are forced to pay VAT and duty. Rahaman said farmers who purchase green houses are also charged the 15 per cent VAT. “This is an issue that has to be addressed. If you really want to take agriculture forward, the duty and VAT have to be looked at in a serious and holistic way.”

Rahaman said once a plastic item is imported and sold to a farmer, VAT and duty are applied. FT Farfan product manager of Agri Lawn and Garden, Andrew Chaitan was quick to point out that due to the length of time farmers had to wait to access approved loans, this was having an effect on business and dissuading farmers. In shortening the time period for loans there was an influx of applicants at the Agricultural Development Bank, which Chaitan said was now causing a problem among farmers. “In terms of getting our products out there it is impeding our business to assist the farmer.”

Joe Pires, managing director of Caribbean Chemicals expressed concern about the disposal of unused chemicals. “There is nobody in this country that we can go to in order to dispose of used and expired chemicals, which needs urgent attention.” Nor is there an incinerator to dispose of the chemical waste. Pires called on the Government to introduce legislation to properly dispose of chemicals, pesticides and weedicides used daily by T&T’s 20,000-plus farming population. Expired and used chemicals, Pires said, are filled in barrels, cemented and buried, which is not ideal. Pires said though farmers have come a long way, many are still unable to read and understand a label on a bottle or plastic container.

In addition to this, when cheap chemicals flood the market, farmers tend to overuse it on crops. “Having cheap chemicals don’t necessarily mean it will help the farming community. Many farmers over prescribe the required dosage. We need to educate our farmers a little more.” Pires said farmers need to be trained and certified in chemical usage. Another area the Government had to focus on, Pires said, are the middlemen who buy produce from farmers and sell at astromonimical prices to vendors. “The consumers are the ones who pay the price for their heavy markup.”

Though T&T has the cheapest chemicals in the world, Pires said there was a perception out there that chemical businesses operate as a cabal and consortium. This he said is furthest from the truth. “Many of these chemical companies are my competitors and enemies. Stating that the reliance of the agricultural sector is often on foreign based inputs, Glean admitted that complaints have been made to TTABA, which they are looking to address with Food Production Minister Vasant Bharath.

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