Financially pressured dairy farmers who are battling high operating costs are inching closer to having their cries answered by Government.
In addition to pleading for a review of the Garbage and Sewage Contribution (GSC) levy that came into effect a year ago, farmers have been asking for a cess to be placed on some milk products to benefit local producers.
Following a tour of beverage manufacturer Pine Hill Dairy on Thursday, Minister of Agriculture and Food Security Indar Weir gave the assurance that work was being done to address the farmers’ plight.
“I am acutely aware of the concerns of farmers in Barbados, especially those in dairy farming, and I have already met with the dairy farmers. We have agreed, in principle, that we will bring back the legislation to address the issues where there will be an arrangement for products that fall under the milk category so all be under the same category and carry the same kind of cess or duty,” he said.
It was in 2015 that the former Democratic Labour Party (DLP) administration promised a cess on milk and a fixed subsidy of $1.17 per kilogramme to be paid to farmers based on their supply.
In the case of the cess, it was proposed to be applied 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. The funds generated from the cess were to be used to help finance the operations of local dairy farmers.
Minister Weir was not keen on speaking about what form the cess would take, but he indicated that a committee had been set up to come up with recommendations for the new legislation that would make provision for it.
“That legislation that had lagged for such a long time, I do not intend to make it lag anymore. I have met with the farmers and we have agreed to a small committee that will review the legislation and then we will come back and take it to Parliament so it can be debated. Once we can get it through, we will be able to assist the Pine Hill Dairy and the dairy farmers in greater detail,” he explained.
The committee is in the process of collecting statistics and is expected to put forward its recommendations in a matter of weeks.
In relation to the GSC, which was introduced at a rate of 50 per cent of the water bill for commercial entities and a rate of $1.50 per day for households, Weir told journalists that he has been in discussions with farmers and the Ministry of Finance on the matter.
“We are working to make sure that we can find a solution through which we can bring some relief to the farmers in terms of the operating costs and the cost of water,” said Weir.
“It is a case of consultation with the farmers to make sure we can get the Ministry of Finance to understand what this increase in water cost is doing to the farmers, and then reaching a reasonable solution between the Ministry of Agriculture, Ministry of Finance and the farmers.”
Weir said he had already examined some of the water bills from farmers, and “I believe it presents a good case for them to be able to present what can be a solution in terms of water”.
However, he added: “It may very well not be a reduction in cost, but other solutions. For example, water harvesting is one of the things I have been preaching for a long time.”
Officials of the Barbados Beef and Dairy Producers Association immediately welcomed the progress this time around, saying they were expecting a decision on the cess within months.
President Annette Beckett said water prices for the dairy farmers had gone up about 125 per cent since the introduction of the tax.
“And the problem is that it is not a case that it has gone up and you can send up your milk price. We have been trying to get a price increase for the last year. So it has come at a time when we can least afford it,” she said, indicating that milk producers last got an increase eight years ago.
Vice president of the association, Brian Allan explained that while water bills for dairy farms depended heavily on the number of cows they had and the amount of water the animals consumed daily, some farmers were faced with paying just over $5,000 in one month for water since the GSC levy took effect.
“Those bills would have gone from about $1,500 to $5,000 in the last year,” said Allan.
“So any business that has not made money [is] just surviving; to have these extra bills now it is a difficult situation,” he said, adding that the industry has never received any form of grants from the Government even while having to compete with products from overseas that receive “tremendous subsidies”.
“The dairy farmers are in a funny position in that we are probably one of the only businesses in Barbados who cannot increase our prices . . . . All of our inputs are going up but we cannot put up our price,” he said.