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Egg scramble!

Published:Thursday | June 28, 2012 | 12:00 AM

Interest want rollback as tax crushes sales

Christopher Serju, Gleaner Writer

PRESIDENT OF the Jamaica Egg Farmers' Association, Roy Baker, has vowed to step up the pressure to get government to roll back the 16.5 per cent general consumption tax (GCT) on egg, following the failure of agriculture minister Roger Clarke to deliver a highly anticipated definitive response to their pleas on Tuesday.

Clarke, who delivered the keynote address at the media launch for Denbigh 2012 at Ace Supercentre in White Marl, St Catherine, made only passing reference to the issue, describing it casually as a "chicken-and-egg" situation.

"I'm very disappointed," Baker told The Gleaner, in light of the fact that he had issued a release last Friday outlining the imminent demise of the egg industry, and had expected that the minister would use the occasion of the annual Denbigh Agricultural, Industrial and Food show to respond with an action plan.

He explained: "I'm very disappointed, because we sent him a copy of the release making our case ... . We have to keep the pressure on because nothing is going to happen (to save the industry) without the help of government."

Baker said the association would be seeking a top level meeting with Clarke and others to impress upon them the devastating consequences of this action.

"They don't understand the effect of this decision," Baker insisted, explaining that with a 60 per cent fall-off in egg prices already, the gains made over the last eight years could be irreversibly lost in the next couple of weeks.

Saving millions

He pointed to the establishment of the liquid egg plant in Montego bay, which now meets the demand for the product largely used by hotels, in the process saving millions of dollars in foreign exchange.

A medium-sized farm with about 15,000 chickens requires an estimated half-million dollars worth of feed every week. "In such a case if sales are cut to the extent that the farmer can't cover at least the cost of feed, it makes sense for him to allow the birds to starve," Baker said, highlighting the gravity of the situation.

He lamented that the new tax measure was a major blow for the association, which had in recent years made significant investment in equipment and training of members, some of whom had been sent to Canada to review their best practices in broiler production.

In addition, he warned that the project, revenue from the GCT on table eggs would not be realised, noting that even at full production of 10 million dozen eggs per annum, Jamaica's output was among the lowest in the region. Further to the decline in sales, the action would result in the demise of the industry, even as it failed to realise the anticipated financial return.

The veteran egg farmer used the occasion once again to appeal to Clarke to lobby for the rescinding of GCT on eggs, which has already resulted in a number of farmers having to slaughter large numbers of their birds in order to cope with operational costs.

Baker pointed out that even if this decision was reversed with immediate effect, his members would still suffer significant losses and even have to spend extensively on marketing to regain lost market share.