Finance Minister Larry Howai announced specific measures in Parliament to reduce the food import bill while increasing domestic food production, placing agriculture among his priorities. He said his plan is to cut food imports by half.
He said the Ministry of Food Production would immediately establish a Commodity Stabilization Fund to be operated by the national agricultural marketing company, NAMDEVCO, which would mitigate the price irregularities that consumers face because of instability in the foreign commodity market.
He also announced that government would accelerate the distribution of leases for small and large farms and introduce incentives for agro-processing, including tax breaks for essential machinery and equipment for a limited time.
He added that within the next two years the government would complete the distribution of 2-acre farms to 5,000 former Caroni workers. This effort would be complemented by a food security facility with Guyana using large estates there.
"The Facility would commit both Governments to expanding agricultural production in Guyana through the establishment of commercial relationships for funding the establishment of several large agricultural estates in Guyana. I wish to emphasise that the agricultural sector enjoys a range of incentives under the existing legislation. I would urge all farmers and other stakeholders to take advantage of these incentives," Howai said.
"The Facility would commit both Governments to expanding agricultural production in Guyana through the establishment of commercial relationships for funding the establishment of several large agricultural estates in Guyana. I wish to emphasise that the agricultural sector enjoys a range of incentives under the existing legislation. I would urge all farmers and other stakeholders to take advantage of these incentives," Howai said.
In a media release, Maharaj agreed that food security remains a top priority of his ministry and the People’s Partnership Government and stated that he is committed to the goal of increasing agriculture’s contribution to GDP to 3% by 2015.
Howai also confirmed what Prime Minister Kamla Persad-Bissessar announced on Saturday - that Value Added Tax (VAT) would be dropped on all food items except those classified as luxury goods and alcoholic drinks. There is already a long list of items that are exempt. The plan is to expand it to give people better buying power.
An inter-ministerial and inter-agency committee would look into defining which commodities this policy will cover and advise on the way forward. The VAT reduction takes effect from November 15, 2012.
Here's a limited VAT exempt list provided by the Food Production Ministry:
Here's a limited VAT exempt list provided by the Food Production Ministry:
Cereals (only corn flakes is zero-rated), Pancake Mixes, Pancake Syrups, Jams, Tea, Coffeemate/Creamers, Flavoured Milk Drinks, Drink Mixes, Juices (only citrus juices are zero-rated), Snacks, Cakes, Custard Powder, Canned Vegetables, Pasta Sauces, Soups/Soup Mixes, Corned Mutton, Luncheon Meats, Canned Salmon, Viennas (only chicken viennas are zero-rated), Batter /Bread Crumbs, Pholourie Mix, Flavoured Rice, Cake Mixes/Frosting, Essences (only vanilla essence is zero-rated), Canned Fruits, Fruit Cocktail, Soya Chunks/Minced, Soya Drinks, Instant Oatmeal, Sweetners, Mayonnaise, BBQ Sauce, Pepper Sauce, Seasonings, Coconut Milk Powder, Massala, Salad Dressing, Olives/Capers, Relish/Dill/Pickles, Hot Chow, French Fries, Frozen Potato, Hamburger Patties, Sausages/Bacon, Processed Meats, Hams/Sliced, Smoked Chicken, Smoked Turkey, Hot Dogs, Bologna, Frozen Foods, Ice Cream, Yogurts, and Desserts.
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