After a more than seven-month delay, Government is finally about to make good on its promise to provide subsidies and incentives to milk producers and processors.
Minister of Finance Chris Sinckler told Barbados TODAY the promised cess and subsidies would take effect in a matter of weeks.
In his June 15, 2015 Budget, Sinckler announced that effective August 1, 2015 Government would apply a cess on milk. This, he said, would be levied at two rates – a five per cent rate on milk containing no less than 60 per cent of liquid cow’s milk and ten per cent on all other milk and milk substitute products.
He said then Government would grant a fixed subsidy of $1.17 per kilogramme that would be paid directly to farmers based on their supply, enabling them to reduce their farm gate price to the processors, who in turn would be expected to lower the price of milk to the consumer.
The subsidy applies solely to milk utilized in the processing of milks which contain a minimum of 60 per cent of liquid cow’s milk.
The plan was welcomed by processor and the farmers who saw it as beneficial to all stakeholders. However, its implementation never materialized and today, Sinckler blamed “a couple challenges” for the delay.
“Where we wanted to do it originally, even though we could have done it there the CPC [Chief Parliamentary Council] advised that there is a better piece of legislation that could facilitate it because this is a two step process. The first process is the collection of the cess, but the second process that really helps the farmers is how it is distributed,” he explained.
“So originally we were going to . . . put it under the Agriculture Development Fund and let them distribute it. That did not present itself as the optimal method. In the meantime we also discovered that there is an old piece of legislation that provided for a diary board, and we looked at that to see how best we can facilitate the distribution of the cess,” he added.
Sinckler said once implemented “within a few weeks’ time” milk volumes and production were anticipated to rise, resulting in low prices to the consumer.
“It has been done in Jamaica and it has worked and it helped the farmers to recover. So we have to find the best way to do that. So there are two things in that. First, the ability to collect it and then the efficacy of distributing it, and that is what they are working on. But suffice it to say, within a few weeks’ time I should bring that to Parliament and we should be off to the races,” assured the Minister of Finance. (MM)