Farmers and vendors have given their support to government’s decision to reduce the Value Added Tax (VAT) on vegetables and other produce, but say they also need relief given the high cost of their inputs.
CEO of the Barbados Agricultural Society (BAS), James Paul and President of the Barbados Association of Retailers, Vendors and Entrepreneurs (BARVEN) Alistair Alexander told Barbados TODAY their associations saw the benefits of the measures announced last week by Prime Minister Mia Mottley to ease the burden of the rising cost of living on Barbadians.
Paul stressed a great majority of farmers were supportive of the price reductions, given the high prices consumers have been paying for a wide variety of goods for some time.
However, he said, the agriculture industry was still burdened by high production costs and farmers would have to see how best they can be flexible in order to assist consumers.
“The various individual companies have signed on and indicated what they can do. I can’t say that across the board in respect to all players both large and small in the sector will manage the move in the same way. The costs for the smaller players have been of a particular concern,” he said.
“We know that some of the farmers have been able to benefit from a reduction in the water rate for their farms, so in terms of water costs there has been some easement, but that has probably been the only cost factor that has eased. In the end, a lot of the cost realities have not changed for many farmers.”
Paul emphasised that stakeholders within the industry have an important role to play in regulating not only their costs and keeping track of the difficulties they experience in doing business, but also the prices they pass on to Barbadians after the initial six-month period of VAT reductions is over.
“The industry has to manage its costs. There are certain realities that the Prime Minister, with the best of intentions, cannot do anything about. Each farmer should know what their cost profile is and what they have to do. We monitor on a constant basis what is happening on individual farms, we [also] have meetings and consultations with our farmers to see what difficulties they may or may not be experiencing,” the BAS head said.
Meantime, expressing support for the measures, Alexander said: “We have to proceed in this society as a social partnership, our brother’s keeper…. We have to support any initiative that is seeking to take care of the vulnerable and other persons, so yes, we do support the move.”
He said the farming community also remained committed to following through on proposals made by the Government to enhance food security.
However, Alexander said the cost of water and access to a stable supply remained a challenge for some.
“You have to deal with the baseline of everything first…. Water is essential and unless there is adequate water and economically feasible access provided to farmers so that they have a constant and reliable water supply, the business of farming will continue to be in peril and you would find it almost impossible to create any real form of food security on the island,” the BARVEN president warned.
Acknowledging the daily pressures experienced by Barbadians in coping with high prices of essential goods, electricity and gas, Prime Minister Mottley last Thursday announced an $18 million package to bring much-needed ease.
The package includes the expansion of the VAT-free list of goods; the reduction of prices on 44 key items for a period of six months, from July 21 this year to January 31, 2023; and a reduction in the VAT on electricity from 17.5 to 7.5 per cent on the first 250 kilowatt hours used, from August 1 this year to January 31 next year.