Posted on

In defence of Produce and Commodities Bill



EDITOR: The CSME is a major opportunity for greater growth and diversity of Caribbean business. In the case of St Vincent & the Grenadines, the limited domestic market has expanded from our 110,000 persons to 10 million in CSM member states.

The wider English, French, Spanish and Dutch speaking Caribbean has approximately 35 million while the Free Trade Areas of the Americas over one billion. The 10 million persons in CSM markets may still seem small, with the daunting prospect of being swamped by cheaper global products if CSME did not exist.{{more}}

Theoretically all goods produced within the common market can move freely throughout the common market, and should not be subject to any import duties, license restrictions, quotas or other barriers to entry. Goods imported from non-member countries are subject to import duties and various import restrictions.

This does not mean, however, that goods exported from one member country to another member country are not subject to any border taxes. Goods from member states can be subject to internal taxes. CARICOM rules allow member states to raise additional revenue by internal taxes, as long as these measures do not discriminate in favour of the domestic production of the state in which the goods are produced. Tax can be levied on an item but it has to be levied equitably on all goods imported and on all goods produced in the country.

The Common External Tariff (CET) is a harmonized coding system for the importation of goods from outside the CARICOM region, with set minimum and maximum duty rates (0-40 per cent) for all the member countries. Prior to the 1960’s the private sector was the main importer and exporter of commodities in the Caribbean however this waned and state companies had to be introduced to ensure efficient export, fair prices and even distribution of essential commodities. For most produce today, the trend has shifted back to the private sector, however, in all member countries, similar legislation designate state corporations and companies under several different ministries as the sole importers of certain essential commodities. These can be reviewed on web site:(

In Barbados the function of importing poultry parts and onions continue with the merger in 1993 of the Barbados Marketing Corporation (BMC) and the Barbadian Agriculture Development Corp. (BADC) to form the BADMC. The BADMC also runs a duty free shop at the Grantly Adams Airport. Interestingly within this company is a Barbados Management Co. for the sale and leasing of sugar lands. The Antigua and Barbuda Central Marketing Board is the sole importer of carrots, cabbage, onions, sweet peppers and tomatoes. In Dominica, rice and sugar not in packages for retail sale are imported solely by the Dominica Export and Import Agency: The Grenada Marketing Board is the sole importer of bulk sugar, rice and powdered milk. Other entities are only allowed to import these products by written permission. In St Kitts, wheat flour in bulk and packages bigger than 5 lbs, rice in bulk and packages bigger than 10 lbs, may only be imported by the Supply Office in the Ministry of Trade. Eggs in shell may only be imported by the Saint Lucia Marketing Board, rice in bulk, wheat flour in bulk and sugar in bulk may only be imported by the Ministry of Commerce and the Fish Marketing Corporation is the sole importer of fish, crustaceans and molluscs. The Saint Lucia Poultry Cooperative is the sole importer of baby chicks and hatching eggs.

In Trinidad several state owned companies exist including PETROTRIN, an oil refinery. Similary there is PetroJam, the oil refinery in Jamaica.

In St Vincent & the Grenadines sugar is the only commodity. With the demise of the St Vincent Marketing Corporation the instruments or powers held under the Marketing Board Act for declaration of a specified produce had to be preserved in a Produce & Commodities Bill. Why is there such similar legislation in every island? Why is there a variety of products that are solely imported or exported by various state companies or corporation?

In some islands it is a means of funding for the state company so as to avoid any reliance on funding or subventions from their central government. In a number of cases it is a safeguard to ensure a sufficiency of a specific commodity, equitable distribution or to ensure the well being of the community and those persons who can least afford.

By and large it is true that a private enterprise can squeeze more profit out of trading a commodity however, there are usually numerous other opportunities for any business to do so. Sugar has been available at relatively stable prices with very few prolonged shortages. There should normally be a strong profit motive in most business transactions but in the real world of the poor in underdeveloped countries, governments despite generating less profit are sometimes expected to ensure that certain commodities are available at stable prices in the national interest until it is desirable for someone in the private sector to make a bigger profit on the commodity or correct a chronic supply shortage.

As the discussion on the Produce & Commodity Act has now matured and its purpose fully explained, it has become clearer that there were other motives behind the opposition to the bill, motives that should not prevail.

Nevertheless, Vincentians can be reassured that the ULP will never abuse the provisions of this or any legislation.

Dr. Jerrol Thompson
Minister of Telecommunications, Science, Technology and Industry