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Free up conch - Exporter urges Gov’t to totally remove cess

Published:Friday | June 3, 2016 | 12:00 AM
Roderick Francis, CEO of B&D Trawling, putting some of his company’s products on display.

Chief executive officer of B&D Trawling, Roderick Francis, has welcomed the recent decision by the Andrew Holness-led administration to shave US$0.25 from the cess on each pound of exported conch, but wants Agriculture Minister Karl Samuda to go even further by removing the remaining US$0.50 cess.

Proceeds from the cess are used to fund fisheries research and development, as well as monitoring of Jamaican waters and enforcement of its marine laws, and it stood at US$1 per pound before former agriculture minister, the late Roger Clarke, reduced it to US$0.75.

With the further reduction by Samuda, Francis believes the country is moving in the right direction but argued that more needs to be done.

"That was such a heavy burden to bear in the first place because we are competing against other countries that do not tax exports. How are you going to grow exports if you are taxing exports?

"So what this will do is provide a little relief for us to be able to expand our production in terms of retooling, in terms of investing in value-added processes and in terms of investing in new types of fisheries," Francis told The Sunday Gleaner.


major part of the stress


He argued that a major part of the financial stress on conch exporters is that the payment for export volume must be made before the shipment leaves the island.

Francis said for B&D Trawling, the island's largest exporter of marine products such as conch and lobster to the European Union (EU), this can mean a lot of money.

"You have to even pay the tax before you even get your export licence. So on average you would pay about US$44,000 per container. That is what we would pay to the Government in terms of tax, and you can multiply that amount by 20 containers," said Francis.

"So, of course, it's a major concern because we have to find that money before you even collect payment."

While he was agriculture minister, Clarke had deferred payment of the cess to 90 days after delivery.


one-off intervention


However, that was a one-off intervention in response to complaints of financial hardships by the exporters and was meant only as temporary relief.

Now Francis wants Samuda to go much further. "Just want to thank the minister for making the step in the right direction, and we hope that he will take consideration to fully remove this tax on exports so that we can be more globally competitive and increase our exports and stop this sliding dollar.

"What you will do now is provide a little relief for us to be able to expand our production in terms of retooling, in terms of investing in value-added processes and in terms of investing in new types fisheries."

But Andre Kong, director of fisheries in the Ministry of Industry, Commerce, Agriculture and Fisheries, is set against removal of the cess, citing its importance to the ongoing financial sustainability of the sector.

"The cess has done a lot, and I don't know which other sector is arranged like that, where the sector contributes to its own development.

"It has been funding aquaculture projects, it has been funding our lobster enforcement and it is funding research - it helps to fund the sea cucumber research, it is helping man," said Kong.

He added: "In every thing there are checks and balances and you don't want to overburden the sector. I think the industry has made a case to the minister and he has heard them and he agrees with them and is giving them some sort of reprieve. I can't say anymore than that it is my understanding that the minister in his understanding has taken on board the plight of the fishers."

The cess was initially implemented to help fund research that would guide the long-term development of the conch and lobster sectors, as well develop new fisheries.