Latest update March 28th, 2024 12:59 AM
Oct 26, 2016 Features / Columnists, Peeping Tom
The poultry industry in Guyana sits comfortably behind high protective tariffs on extra-regional feed. Yet, it has still been unable to provide consumers in Guyana with chicken which is produced cheaper than imported chicken.
Why is local chicken so expensive? The reason is the high cost of chicken feed. The price of chicken can only be reduced if cheaper feed was available locally.
Feed is the single most important factor which determines the price of locally produced chicken. If the price of feed falls, then the price charged to consumers is likely to decline.
Poultry farmers need cheaper feed. Traders have found feed that is cheaper. They have fond that feed in Jamaica. They have brought it in to Guyana and it has upset locally chicken feed producers.
Some of these producers are upset. They are contending unfair competition. The problem they have is that they have not been able to prove their case. And so they are now attempting, in a market economy, to lobby the government to prevent the feed from Jamaica from coming here under the Caricom arrangements. Those arrangements allow the feed to come here free of import taxes. Local feed producers therefore enjoy little or no protection from the regionally produced feed.
These producers can lobby all they want but it will not help their case. They must prove that the feed from Jamaica violates regional rules of origin. They simply cannot prove that point. They have no access to the data and if the Jamaicans say that there is no unfair competition, there is little that local millers can do.
The local millers know this. They play by the same rules too. This is a problem for the local feed millers. It has no bearing on the local poultry industry.
The poultry industry is not under threat. The importation of the feed has not caused a drop in the price of chicken. It may have caused decline in the sales of local millers and this is what may be upsetting local poultry feed producers. They may be losing market share to the imported product.
The local chicken industry is not under threat. The local feed industry may be about to fold. But that is what competition is about.
The government cannot be expected to float the local feed industry by restricting imports. Guyana has gone down this road before under Burnham and it led to local industries becoming woefully uncompetitive.
The local feed millers must examine their cost of production and if they cannot reduce this cost or produce a superior feed which can match that of foreign-produced feed, then it is time for them to get out of the feed production business.
If they cannot produce feed to compete with the feeds produced by Jamaica, then they have no place in the free market system. They ought to know that this system is one which is based on the fittest surviving.
If on the other hand, local millers feel that there is unfair competition, then they must examine what mechanisms exist to contest this unfair competition. If they cannot prove their case in relation to the imported feed, then there is nothing they can do.
The government cannot be expected to adopt measures to protect the local feed industry from competition. The industry is not a young industry. It has benefitted and still does today from protective tariffs from imports from outside of the Region.
If Guyana as a major producer of raw materials used in chicken feed cannot compete with the Jamaica feed, then it is time to consider closing down the local feed industry..
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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